Months after the introduction of Apple’s iAd advertising platform, it looks like advertisers aren’t happy about the service at all. According to a report posted by TechCrunch, many developers have noticed a massive slowdown in iAd’s fill rates recently, especially after the New Year:
The fill rate—what percentage of the ad inventory is actually filled with an ad—for two separate developers plummeted from 18 percent to 6 percent. And in a few instances for some newer apps, none of the ad slots were getting filled, compared to nearly complete fill rates from other mobile ad networks.
In the early days of iAd, several reports suggested advertisers and ad agencies weren’t terribly excited about Apple’s implementation of mobile ads because of the strict rules that involved a review process for design and interaction. I spite of these initial issues, Apple managed to close 2010 with $60 million in iAd commitments. Yet, TechCrunch is reporting the relationships between advertisers and Apple got worse as well:
After selling the initial campaigns, the relationships were dumped into the laps of junior account managers in Apple’s advertising business (which came out of Apple’s $275 million acquisition of Quattro Wireless last year). They are being tasked to get renewals this year from ad agencies and brands or equal or greater amounts. But the experiment is over (advertisers can now see how the ads perform) and these junior salesmen don’t have access to the CEOs. They need to talk to their counterparts at ad agencies and brands, who can’t spend $1 million on a mobile ad campaign so easily. One ad agency executive tells me that the iAd salespeople are suddenly calling a lot more and becoming very aggressive in pushing for renewals.
Last, the third issue seems to be about pricing.
The other issue is the pricing. It is confusing to mobile ad marketers because it is based on a combination of both impressions and performance.
The full report is available over at TechCrunch here. The blog suggests “resistance is setting in” towards Steve Jobs’ plan to bring an interactive, rich and expensive (for advertisers) ad experience to mobile devices, although Apple recently announced an expansion of the platform in Japan thanks to a collaboration with Dentsu and has provided developers with a software called “iAd Producer” that simplifies the process of creating ads for the iPhone and iPad.
We have been hearing similar reports from developers about low fill rates in the past 8 weeks, and it will be interesting to see whether or not the situation will get better once iAds are in full-force on the iPad.