Audio Ads Will Be Sold Via Apple’s iAd Service

As several reports from earlier this week claimed, Apple’s much rumored free, ad-supported radio service would be integrated with its iAd business. Furthermore, in accordance with a new report, revealed on Wednesday by AdAge, Apple’s iAd network will serve both visual and audio advertisements as part of the company’s forthcoming “iRadio” initiative.

It appears that the service will feature “highly targeted ads” that may be considered “pricey”. However, the ads are promised to be also appealing, for those looking to advertise to end users.

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The purpose the ad-supported service, which seems to be similar to how Pandora works, being predicted not to include the ability to search or play specific songs on-demand, is to push listeners to download songs through iTunes if they wish to listen to it again.

There have been many comments against the use of advertisements in the service, but this would allow Apple to offer the service for free. However, there are rumors emphasizing the fact that Apple may have a premium service in the plans, but there is no certainty regarding this fact at the moment.

The Apple’s iRadio service will be going in direct competition with Pandora, but Apple is predicted to be able to charge more for ads on its service than Pandora since it can target users much better.  Taking data from anywhere their Apple account can be used, Apple can target consumers based on all of their entertainment while Pandora is only able target users based upon their sex, area code and listening habits.

Apple is expected to pay out around 10% of ad revenue to music labels significantly more than the 4% Pandora pays out. Therefore, while 70% of current iAd revenue is given to developers who utilize the service, Apple will be able to keep 90% of revenue from audio ads.

Meanwhile, another radio-like service is expected to be provided for the platform, judging by Google statements that Google Play Music Unlimited will be soon brought to iOS.

According to the rumors, Apple is trying to complete deals with record labels as soon as possible as it plans to launch this streaming music service at its annual Worldwide Developers Conference, which is scheduled to begin on June 10.

 

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