iTunes Radio signs big advertisers


iTunes RadioiTunes Radio, Apple’s music streaming service set to debut next month against Pandora, has already signed a handful of high-profile brand partners including McDonald’s, Nissan, Pepsi, Procter & Gamble and possibly one or two more brands, according to an AdAge story.

The deals range from the high single-digit millions of dollars to tens of millions of dollars and include a 12 month advertising campaign to run within the streaming music service for each of the participating brands.

In addition to basking in all the publicity that comes with a heavily-anticipated Apple product launch, the launch partners get exclusivity within their respective industries through the end of 2013. Come January 2014, however, ads on iTunes Radio will become widely available, provided an advertiser agrees to the minimum buy-in of around $1 million, according to the story.

Ads on iTunes Radio will come in three forms: interstitial audio and video ads and “slate” ads; interactive display ads that will take over whatever screen the consumer is using. That includes iPhones, iPads, all desktops and laptops loaded with iTunes (including Windows PCs) and Apple TV, the Apple device that brings Internet connectivity and apps to TVs.

Users will be served an audio ad once every 15 minutes and one video ad every hour, the sources said. The video ads will only be served to consumers at times when they are likely to be looking at their device screen, such as immediately after hitting play or choosing to skip a track.

For the launch, advertisers will be running ads across all of the devices that iTunes Radio will accessible on (that is, anything that runs iTunes). When the launch goes wide in 2014, advertisers will have the ability to target specific devices for their ads. The cost of iTunes Radio ads will increase with the size of the screen, according to agency executives; iPhone ads will be cheapest and Apple TV ads will be the most expensive.

Some of the launch partners will also be curating playlists that have fewer ads than typical iTunes Radio stations. These branded stations will not be labeled with a brand name, but will most likely involve a short ad saying that brand was sponsoring a user’s block of free listening.

Of course, consumers can choose to have no ads at all. iTunes Radio will be a free, ad-supported service to the public, but Apple will be offering an ad-free option to anyone who purchases iTunes Match, a cloud-based music storage feature that allows users to access their libraries on any Internet-connected Apple device.

iTunes Radio inventory will be sold via iAd, Apple’s mobile ad network.

Whereas iAd only sold display ads, iTunes Radio gives the network more valuable audio and video inventory.

Apple and its music industry partners think that iTunes Radio’s greatest revenue generator will be its ability to get users to actually buy music. A purchase button will be placed next to every song played on the service in an attempt to get users to permanently add title to their iTunes library.

See the AdAge story here