Apple (AAPL) Already Making Concessions in One KEY Segment...
Tweet
Share
E-mail
Get Alerts AAPL Hot Sheet
Price: $314.84 +0.46%
Overall Analyst Rating:
SELL (= Flat)
Dividend Yield: 0.4%
EPS Growth %: +20.4%
Overall Analyst Rating:
SELL (= Flat)
Dividend Yield: 0.4%
EPS Growth %: +20.4%
Join SI Premium – FREE
Advertising is a great source of income for product and service providers, with high margins and easy execution. However, if you don't have customers, than all ad logic will go right out the window.
And that's what Apple (Nasdaq: AAPL) is beginning to realize.
Products like the iPad, iPod, and iPhone are very appealing, producing a large and dedicated customer base. But some have complained that Apple's ad platform, iAd, just isn't doing it for them. Complaints include higher prices, tough sales tactics from Apple, and limitations on creativity that is able to be submitted.
Conversely, many have touted Google's (Nasdaq: GOOG) AdMob service, which is not only priced more reasonably, but also available on a wider array of mobile devices. And the shift is making Apple crack.
According to the WSJ, Apple is once again lowering spending commitments from advertisers, and easing constraints on ads. From an original amount of $1 million expected to be committed, Apple shortly reduced that to $500,000. Now, Apple might be looking to slice that by another 20 percent to an initial commitment of $400,000.
Also, Apple might be looking to trim what it charges per click. Currently, advertisers pay about $10 for every 1,000 views of an ad, and $2 for every time its tapped. Google might have a lower structure, with the WSJ noting that Google might charge $4 to $12 per thousand views, with higher premiums for more targeted ads.
Apple has even begun a training program in conjunction with its media buying agency OMD, or Omnicom (NYSE: OMC).
But with the advertising landscape continuously changing and competitors looming, Apple will need to adapt quickly, even if it is Apple.
Shares are 0.6 percent better Tuesday.
And that's what Apple (Nasdaq: AAPL) is beginning to realize.
Products like the iPad, iPod, and iPhone are very appealing, producing a large and dedicated customer base. But some have complained that Apple's ad platform, iAd, just isn't doing it for them. Complaints include higher prices, tough sales tactics from Apple, and limitations on creativity that is able to be submitted.
Conversely, many have touted Google's (Nasdaq: GOOG) AdMob service, which is not only priced more reasonably, but also available on a wider array of mobile devices. And the shift is making Apple crack.
According to the WSJ, Apple is once again lowering spending commitments from advertisers, and easing constraints on ads. From an original amount of $1 million expected to be committed, Apple shortly reduced that to $500,000. Now, Apple might be looking to slice that by another 20 percent to an initial commitment of $400,000.
Also, Apple might be looking to trim what it charges per click. Currently, advertisers pay about $10 for every 1,000 views of an ad, and $2 for every time its tapped. Google might have a lower structure, with the WSJ noting that Google might charge $4 to $12 per thousand views, with higher premiums for more targeted ads.
Apple has even begun a training program in conjunction with its media buying agency OMD, or Omnicom (NYSE: OMC).
But with the advertising landscape continuously changing and competitors looming, Apple will need to adapt quickly, even if it is Apple.
Shares are 0.6 percent better Tuesday.
Serious News for Serious Traders! Try StreetInsider.com Premium Free!
You May Also Be Interested In
- Apple has talked to PrismML about ways it could use its technology - The Information
- Vishay launches compact automotive optocoupler in narrower SOP-5 package
- ServisFirst Bank joins ABA Premier Partner Network
Create E-mail Alert Related Categories
Corporate News, Insiders' BlogSign up for StreetInsider Free!
Receive full access to all new and archived articles, unlimited portfolio tracking, e-mail alerts, custom newswires and RSS feeds - and more!
