Thursday, April 29, 2010

According To Apple, An Impression’s Worth 1¢ While Intention’s Worth $2

To advertise on the iAd platform, Apple will charge advertisers one penny for every banner ad impression and $2 every time someone taps on the ad to expand the banner.

Costs would add up through the views and the taps to reach $1 million.

Is this ridiculous? Or, is this the future?

I say the latter.

What Apple has realized is that while an impression is driven by the advertiser’s intent to get an ad in front of someone, clicking on the banner is driven by the user’s intent for more information.

According to Apple, the viewer’s intent is 200 times more valuable than the advertiser’s intent.

Makes sense. An impression is a necessary first step to get people into the purchase funnel. A click means that someone is moving a little further down the funnel so it should be worth more.

I’m sure that Apple will soon realize that the next thing that they can charge for is view duration data. After all, the longer a person is involved with a commercial, the greater the chance that some persuasion has occurred.

Which means, they've gone even further down the funnel.

So how much would view duration data actually be worth to an advertiser?

Anywhere from $25 to $50 dollars a second.

Yeah, right. Why would an advertiser pay $50/second, or $3,000 for a 60-second commercial? Simply because the average 30-second commercial costs around $360,000 to produce. Is it worth $3,000 to find out if your $360,000 was well-spent or not?

What if advertisers made part of that $360,000 contingent on how long people who do click-in to watch actually watch for?

Then what Apple would actually be selling is creative accountability.

Look at it that way and $50 per second actually sounds cheap, doesn't it?

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