Home-court advantages sure come in handy.
Advertising is decidedly Google's (Nasdaq: GOOG) home court, and the search giant is flexing that strength's muscles against Apple (Nasdaq: AAPL). This is one arena where I doubt Cupertino will ever beat Big G.
Apple's mobile advertising iAd is built from the foundations of Quattro Wireless, a wireless ad company bought two years ago after losing a bidding war with Google over AdMob. When iAd was launched, it boasted a hefty minimum cover charge of $1 million for early adopter advertisers. That entry fee has since been slashed multiple times, presumably because iAd has failed to take off as hoped.
It was cut to $500,000 last year, and reports in December suggested that Apple was willing to entertain $400,000 offers. According to Ad Age, Apple has now shaved even more dollars off that minimum and advertisers need to commit only to $100,000 -- just 10% of where it started.
That's not all that's changing, either. Apple had previously charged advertisers a fixed rate for every 1,000 ad impressions plus an extra payment per click, and it has now supposedly eliminated the per-click fee. On top of that, iAd was paying out 60% of ad revenues to app developers, and that cut has now been cranked up to 70% to motivate developers to use the platform.
The changes come shortly after Apple reportedly hired Adobe exec Todd Teresi, who was a VP in Adobe's media-solutions group, to lead iAd a month ago. IDC had estimated that Google's mobile ad market share jumped from 19% in 2010 to 24% in 2011, while Apple's fell from 19% to 15% over the same timeframe. Millennial Media, which just filed for an IPO, came in second place with a 17% share.
Apple still has Microsoft and Yahoo! beat in the mobile ad market, as their slices were estimated at 6% and 8% last year, respectively.
As hard as Apple may try in mobile ads, this is still Google's turf any day of the week.
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