According to a hot new leak of information via AdAge.com, Apple has been very busy fleshing out the business for its upcoming iTunes Radio streaming business. It’s said to have signed up brands like McDonalds, Pepsi, and others like Nissan and Procter & Gamble who will take part in advertising campaigns as part of the free version of Radio.
The partners are said to have spent between “high single digit” millions of dollars and tens of millions to buy into Apple’s plans, and the deal includes 12 months of ads–as well as exclusivity within their own industries for this year. From early 2014, the ads will be open to all-comers, with a minimum purchase of about $1 million. Apple will likely use the income to offset the extra licenses to broadcast digital music in this new format it’s spent a lot of time and effort negotiating.
Ads on the Radio system will be of three types: Intersitial audio, interstitial video ads, and roadblock-style ads that take over the screen on the device playing the music. To start with the ad campaigns will be across all devices, but when the service is opened more widely in 2014 ad partners will be able to target specific devices. That’s likely to be a powerful tool for ad partners who could tailor campaigns to suit–one can imagine some brands, perhaps, chosing to advertise on Macs or PCs only.
Apple’s also taking great care to deliver value to ad partners by timing the ads carefully so that they get maximum user attention, such as when a user has just clicked play or chosen a specific track. Apple’s smart, of course, and users can buy out of the ad campaigns by purchasing its iTunes Match package. Doing so will likely deliver more user data to Apple so it can monetize this information over a longer period.
And there’s one last thing to think about: This is big money from big brands. Could it help Apple lever its way into the TV business? Because that industry too is all about ads…
[Image via Flickr user: Max Erds]