Brands weigh premium price tag of rich media tablet ads

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Toyota promotes its Prius V model with a Living Ad in Yahoo's Livestand iPad app
Toyota promotes its Prius V model with a Living Ad in Yahoo's Livestand iPad app

AOL, Apple and Yahoo each reportedly charge up to six figures for brands to run interactive ads for tablet devices. While ad rates equivalent to home prices may seem obscene, industry experts say tablet advertising can be worthwhile for luxury brands targeting the tablet market's affluent owner base.

"It doesn't make sense for every brand to participate in iPad advertising," said Tina Unterlaender, account director at AKQA Mobile. "We see success for brands looking for [consumers who are] male, higher income and older."

Matt Martin, senior marketing manager at Sam's Club, said that the retailer is working on an iPad app, but its consumer base isn't yet represented enough on the channel. That's likely to change as consumers begin to shift their online consumption habits to the tablet. 

"Our statistics are showing there is some level of a replacement effect," said Scott Jensen, VP of digital product and applications at The Weather Channel. He added that 79% of consumers who access the content on the tablet previously did so through a computer.

For brands whose consumer base fits the criteria, Unterlaender said the ads should earn the costly investment. "The average CPM is definitely higher on the iPad" because of the channel's more targeted audience, higher engagement rates and broader spectrum of interactive features an ad can include, she said.

AOL and Yahoo also rolled out interactive tablet ad units with premium prices. Toyota ran a Living Ad in Yahoo's Livestand iPad app that features interactive video to promote the carmaker's Prius V model. BMW ran an ad in AOL's Editions iPad app that offers consumers an interactive view of a car not slated to be released for two years, as well as video and photos.

"We're finding car companies are interested [in advertising within Editions] because they're used to running splashy full-page ads [in magazines]," said Trent Herren, head of strategic initiatives at AOL. 

While the cost of tablet advertising may be high, Alex Linde, director of mobile and tablet advertising at Yahoo, said that Yahoo offers impression guarantees for multi-month sponsors. "We're not here to price ourselves out of the market," he said.

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