Here Is What You Get For $50 On iAd, Apple's Mobile Ad System That Used To Cost $1 Million

Apple's in-app mobile advertising platform, iAd, has been something of a failure for the company.

Though Steve Jobs once envisioned it as a means for Apple developers to make money selling ads inside their apps, the platform has fallen by the wayside over the years as the company has narrowed its focus on its devices and software.

iAd's inability to gain market share is often attributed to several problems: Apple's insistence that it control how the ads are formatted, the fact that the ads don't reach Android users, and Apple's initial demand that advertisers make a minimum buy of $1 million.

Apple wound up lowering the minimum buy to $50 last summer, allowing smaller developers and advertisers to try what it had to offer. The app developer MetaRain decided to take iAd out for a spin to promote its photo discovery app Colorbay and wrote about its campaign in a blogpost.

Here's what it found:

• MetaRain was impressed by Apple's targeting options, which allowed it to target users by age, gender, and previous app purchases. The company chose to promote Colorbay to users who had downloaded Photo & Video and Social Networking apps.
• The developer chose to spend a maximum of $50, with a goal of spending $10 a day for five days.
• After the first day, the iAd system wasn't able to find $10 worth of advertising impressions to buy on MetaRain's behalf. Because MetaRain's targeting was too specific, there were not enough people to show its ads to, and iAd only wound up spending $24.39 of its budget.
• However, MetaRain was surprised to see how well the campaign did. In total, its $24.39 purchased 966,648 impressions for a CPM of $0.03. Of the ads that were served, people tapped on them 1,702 times, and downloaded the app 25 times. This means MetaRain spent a little more than $0.01 for every click it got from the campaign, and $0.98 for every download.
• "iAd is now something feasible," it wrote. "We think that they are heading in the right direction and may also be a good platform to integrate with."

If MetaRain's experience is any indicator, it's possible Apple could ultimately grow a nice iAd business from smaller developers looking to promote their iOS apps to Apple's affluent user base. While the platform might not be the hit with big brands Apple had hoped it would be, in-app ads have turned into a huge business for Facebook and Twitter. Looks like Apple may finally have figured that out too.