Apple to Rake Advertisers Over the Coals

According to a Wall Street Journal report, Apple is pretty confident in its soon-to-launch mobile advertising model, so confident, in fact, that the company intends to charge 5 to 10 times the market ad price for ads to appear on the iPad and other devices. The report indicates that Apple is planning on charging close to $1 million for ads through its iAd platform, while the industry is used to paying prices in the $100,000 to $200,000 range for similar mobile ads. Further, it could charge as much as $10 million to those looking to get in on the first wave of the advertising.

Ads will appear first on the iPhone and iPod Touch and later on the iPad. App developers will get a 60 percent cut of the ad revenue and Apple will take home 40.

So what is inspiring Apple’s Super-Bowl-style pricing? Apple has a huge market with 85 million iPhone and iPod Touch users. Marketers will also be able to target ads based upon users’ downloaded music and apps, as well as the location. The ads will leverage the interactivity of the iPhone OS platform.

The WSJ explains one ad Apple has been showing off: “When a user is in an application, an animated banner ad appears on the border of the screen, along with an iAd logo. If the user taps on the ad, it expands across the screen, displaying a video, an interactive store locator and exclusive offers at local stores, among other features.”

Apple intends to create the ads for its first wave, and will be releasing a development kit for advertisers later down the line. [via WSJ]