iAd – One More Reason to Cash in on Your App Idea

iAd gives app developers an additional means to generate revenue from their mobile applications.

During Apple's World Wide Developer Conference (WWDC 2010), Apple CEO Steve Jobs introduced iAd, a powerful new way to advertise on its mobile platforms (iPhone and iPod for now, iPad in the future).

iAd is significantly superior to existing advertising systems. Advertisers can now build iAd campaigns combining the "emotion" of television advertisements with the "interactivity" of computer ads. App users will soon see many compelling ads such as the Nissan Leaf electric car ad which Steve Jobs has used to highlight iAd capabilities.

For large advertisers, iAd provides a channel to reach over 100 million affluent and educated mobile users. Apple has already secured over $60 million worth of advertising commitments and expects this number to grow to several hundred million by the end of 2010.

This is great news for app developers since they will collect on 60% of the revenue generated from iAd sales. Every time a user views or taps on an ad that appears in an app, the owner of that app will receive 60% profit from Apple. For example, if Apple charges an advertiser $6 per ad click or tap (the actual rates are not announced yet), the owner/developer of the app would receive $3.60 from Apple.

Since this revenue is in addition to the profit app developers make from selling the app itself, iAd is just one more reason to cash in on the mobile application market. In fact, even free apps can now generate revenue!

iAd gives application developers the potential to generate significantly more revenue than app sales alone. Let's say an app developer charges $2.99 for their app, this allows up to 5 users from the same iTunes account to use the app at no additional cost, for an unlimited amount of time. On the other hand, as long as the users are viewing the app, the iAds will appear and give developers a consistent means of generating revenue.