August 21, 2013 6:12am PT by Andrew Hampp, Billboard
iTunes Radio to Launch Next Month (Report)
Apple’s iTunes Radio is gearing up for a September launch, with an ad model that has already attracted interest from blue-chip clients. According to a detailed report from Advertising Age, iTunes Radio will debut next month with sponsorship from McDonald’s, Pepsi, Nissan, Procter & Gamble, and potentially one or two additional clients that will remain category-exclusive through 2013. Beginning in January 2014, the service will be widely available to all advertisers, and allow them to target more granularly. An Apple spokesperson declined to comment to Billboard on the report.
The iTunes Radio news comes on the heels of OMD Sound, a new music marketing unit formed within Omnicom’s OMD, the country’s largest media-buying agency with $13 billion in billings in 2012. Apple is among the agency’s clients, and prior to OMD Sound's formation consulted with the agency to develop an outreach program with advertisers that would help shape the product’s nascent ad model, according to executives familiar with the plans who spoke with Billboard. The strategy was similar to an event the company held in 2012 with Spotify for clients like PepsiCo, McDonald’s, State Farm and The CW. With the exception of Procter & Gamble, all of the clients named in the Ad Age report buy media through OMD.
As part of iTunes Radio’s initial rollout, an ad will be served to users once every 15 minutes, including one video ad per hour, according to Ad Age. The product will be available on all iTunes-compliant devices, including PCs, tablets, iPads, iPods, iPhones and Apple TVs. Costs for ads will vary by size of screen, with Apple TV commanding the highest premiums. Beginning in 2014, packages will be sold at a minimum of $1 million and will include a 12-month commitment.
Apple has only been a significant player in mobile advertising since 2010, when it debuted the iAd to court premium advertising (and create custom ads) for the iPad. The company has yet to make a big enough dent to crack eMarketer’s ranking of the top earners of mobile ad revenue, which is led by Google, Facebook and Pandora, the latter of which is expected to collect $400 million in mobile ad revenue by the end of 2013.