Publishers have been frustrated with their ability to make money from their articles on Apple News. A new agreement may open up a new source of revenue for them, though, when NBCU starts selling ads for Apple News under an agreement both parties are announcing today.
NBCU will be the exclusive seller for advertising in the U.S. in the year-old news aggregation app. No deals have been inked so far, as NBCU won’t officially start selling until Jan. 1. Under the deal, it will sell publishers’ unsold inventory that they hand over; as well as ad slots between articles. NBCU is creating a new team under svp James Kreckler to handle sales of the app inventory.
The dozens of publishers who distribute their news through the app — among them CNN, The Washington Post and Vox Media — can still sell advertising in their own content and keep all the revenue. When NBCU sells the ads, the revenue will be split with publishers that’s similar to way it was in the early days of the app, where publishers kept 70 percent of the revenue.
Launched a year ago, Apple News is preinstalled on all iOS devices and claims 70 million active monthly users, and at first held out the promise of a way for publishers to reach new audiences. But publishers were frustrated by what they felt was lackluster audience from the app. Even after traffic increased this fall, they’ve still had challenges monetizing it.
Apple has never really had both feet in the ad business; true to its roots as a hardware company, it hasn’t had a direct sales effort since it scaled back its mobile advertising effort, iAd, this year. So the pact with NBCU gives it another way to attract big-name advertisers to the app, leveraging NBCU’s longstanding relationships with brands.
The move is reminiscent of one by up-and-comer messaging app Snapchat, which forged a deal with Viacom earlier this year to let the media powerhouse sell ads on its behalf, and could be read as an acknowledgment that platforms need the sales bench that the established media giants have. Snapchat, for its part, has also been ramping up its own sales force, poaching talent from platform giants and media companies alike.
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