Apple Inc. (NASDAQ:AAPL) recently hired Michael Pallad to lead iTunes Radio international advertising. Pallad was the former vice president of National & Network Sales for Cumulus Media.
AdAge reported that he started work on December 2nd and he reports to iAd vice president Todd Teresi. Tim Peterson elaborated in the article, “Mr. Pallad’s appointment suggests that Apple Inc. (NASDAQ:AAPL) plans to make a stronger play at the $1.56 billion U.S. digital radio advertising market, as estimated by eMarketer. One media buyer said the executive should gain traction quickly among agencies. Apple Inc. (NASDAQ:AAPL) launched music streaming service iTunes Radio in September with a handful of category-exclusive launch advertisers, such as Nissan Motor Co., Ltd. (ADR) (OTCMKTS:NSANY) (TYO:7201), PepsiCo, Inc. (NYSE:PEP) and The Procter & Gamble Company (NYSE:PG). Those initial deals expire at the end of this year, when Apple Inc. (NASDAQ:AAPL) will begin pitching the service more broadly to brands. The initial campaigns included audio, video and display ads that air between songs.”
Apple looks to the future of iTunes Radio
Apple Inc. (NASDAQ:AAPL)’s advertising prices are set high at $1 million a piece for year-long commitments. The fact that Apple Inc. (NASDAQ:AAPL) hired Pallad as their advertising leader signifies that the Cupertino-based tech giant is serious about iTunes Radio. Emarketer estimates advertisement rates will surge over 157% and reach the total spent will reach $4.01 billion by 2017. That still is a small amount considering the $15.62 billion spent by advertisers on terrestrial radio in 2013. By 2017, that number should be $16.05 billion.
Pallad’s experience to boost iTunes Radio profits
Adam Schlachter (senior VP-media for DigitasLBi) elaborated, “To have someone at the helm with that much experience and connections [Mr. Pallad] must have and the knowledge he would bring to the party, it will only help to continue to make the case for [iTunes Radio] as a viable alternative or a considered part of the mix given the volume of streaming audio consumed.”
Advertising rates for iTunes Radio were better than initially expected, however Apple Inc. (NASDAQ:AAPL) has yet to disclose the number. The radio service is still new as it first launched in September but the company reached 20 million users within the first month which means there is a lot of potential for financial growth.