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Apple reportedly eases iAd terms to boost interest

Mobile advertising platform is struggling to win advertisers, leading Apple to make concessions to drum up business, according to a Wall Street Journal report.

Steve Jobs and iAd
Steve Jobs unveils Apple's iAd program in 2010. James Martin/CNET

Apple apparently has recognized that its mobile advertising platform, iAd, has struggled to gain traction with advertisers and is reportedly making concessions to drum up business.

Launched in the summer of 2010 alongside iOS 4, iAd gives marketers the ability to embed dynamic and interactive ads within a mobile app. The service, which sells ads within mobile apps on iOS devices, was designed to smoothly display ads within an app rather than take the user away from the app to a separate Web page. iAd was even heralded by then-CEO Steve Jobs at the platform's introduction as a mix of emotion and interactivity, which he said was something existing ad platforms weren't providing to users.

However, that hasn't translated to advertiser interest. During the past year, iAd has fallen from a first place tie with Google's Admob to third place behind Admob and Millennial Media's ad network, leading Apple to offer advertisers more attractive terms, according to a Wall Street Journal report.

Originally setting minimum ad buys at $1 million, Apple is now asking advertisers to commit $400,000, sources familiar with the matter tell the Journal. Apple is also reportedly capping per-click charges, which can quickly exhaust advertising budgets.

To attract new advertisers, Apple is also establishing a marketing training program and offering campus tours to marketing executives, allowing them to make discounted purchases at the company store, ad executives told the Journal.

Apple representatives did not respond to a request for comment.

The company introduced its iAd platform not only as a new source of revenue for the company, but also to help developers make money from their apps, even if the apps themselves are free. However, some developers say they haven't made any meaningful revenue from it. David Barnard of mobile app company App Cubby told the Journal he had earned only $320 from iAd in the past month and that Apple was able to fill only 13 percent of his apps' ad requests.

Apple has made tweaks to iAd before. In July, Apple began offering advertising firms a way to make large iAd buys that could then be doled out to companies at a lower volume than what Apple sells directly--a move designed to make the service more approachable to advertisers that wanted to run smaller campaigns.