Companies are paying newspapers and magazines up to five times as much to place ads in their iPad applications as what similar advertising costs on regular websites.

via wapo, thx Tricia.

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  1. It will be interesting to see if this actually trickles down to higher ad rates for photographers…I’d think it could be a while before we saw any actual meaningful data though.

  2. That’s interesting. I’m inclined to chalk it up to the hype factor surrounding the iPad — everyone wants to jump on the bandwagon. We’ll see if ad rates can sustain that level especially as more pad devices are announced.

    Jobs apparently said (via CNET) today the share of e-books going through the iBooks store is 22 percent in 8 weeks, according the publishers on the iBooks store. That’s a pretty squishy statement, but it sure doesn’t sound like a justification for paying a 5X advertising price premium.

    Even if you buy the iPad unit shipment estimates of 2M units at the end of May (not clear how many of those are really revenue units) the universe of iPad customers still seems kind of small (at least at the moment). And then extrapolate how many of those customers are subscribing to any specific e-publication, the numbers aren’t compelling.

    Although you could probably conclude that people with iPads are probably enthusiastic and are probably reading the stuff they download fairly thoroughly. So maybe there is a case that the eyes viewing iPad content are very attentive right now. And the demographics of iPad customers are probably pretty well documented right now. ♦

    • @Tom, Early internet ad rates were quite good, and climbed a bit heading into the dot com crash. After that the rates stayed relatively lower, partially due to effectiveness data showing poor correlation and click-throughs. With the lack of data for tablets, I could imagine the novelty factor pulls some extra revenue. Good for those companies involved now, though perhaps not sustainable in the future.

      • @Gordon Moat,

        Yeah, gut feel says the premium ad rates are not sustainable.

        It’s Interesting you bring up the dot com collapse. I certainly see the potential for a similar scenario playing out in this market space — wild enthusiasm followed by misguided investment leading to disappointing returns and ending in spectacular failures. Let’s not forget fate of the king of the dot com hill, Sun Microsystems.

        That’s why I think it’s important to look for well documented success stories vs. the press release variety. There are so many people who want this market opportunity to succeed, I think there is going to be a tendency to grab onto any good news, however flimsy, and declare it to be definitive proof of success.

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