Photo: Associated Press
Apple’s new iAd advertising product could deliver $825 million in annualized revenue this year to app developers, says Toni Sacconaghi, Jr. of Bernstein Research, in a note today.That revenue would represent a roughly 40%-80% increase in revenue for developers. Toni estimates developers generate $1 billion to $1.8 billion in yearly sales.
This is a key part of the strategy behind Apple’s entrance into the mobile advertising market.
Besides helping developers pay for (and invest in) more apps, there’s also the Android problem. With Google courting iPhone developers, Apple needs to give them a reason to stick around. If the iAd succeeds like Toni thinks, Apple will be enriching developers.
Though Google will be trying hard with mobile ads, too, for both iPhone and Android developers. Besides its own mobile ad product, it’s also trying to buy AdMob, the top iPhone app ad network.
What does Apple get out of iAds?
It will get $815 million in annualized revenue this year from ads, says Toni — $550 million from apps and $265 million from media. For media, he mentions newspapers and videos, like ABC’s application. He’s suggesting that ABC, or companies like it, might want to use iAds instead of their own 30-second spots. (iAds also provide Apple with more intelligence about advertising and user behaviour.)
For a company with $43 billion in sales last year, that’s not a lot of money, but it’s $815 million extra it didn’t have last year. And if keeps Google at bay, all the better.
See Also: Are iAds Worth $1 Million?