Publishers land lucrative ad deals for iPad launch

Big names pay up to $300,000 for advertising

Magazines and newspapers are planning to launch special editions for the forthcoming Apple iPad, with the support of millions of dollars in revenue from advertisers.

With the US launch of the much-hyped tablet computer less than two weeks away, publishers have signed lucrative deals to carry interactive advertising from some of the world's largest corporations.

With the price of exclusive ad deals reportedly ranging from $75,000 to $300,000, publishers are able to defray the costs of developing downloadable versions, or apps, that package their content specially for the new device.

The New York Times, whose iPad app was featured in Apple's launch presentation for the device in January, has sold exclusive rights to ads on its iPad editions for the first 60 days to a credit card company. The Wall Street Journal said it has signed up a slate of advertisers including FedEx and Coca-Cola to take advertising space at $100,000 a month.

And media buyers for the major advertising agencies have been competing for access to the early iPad editions of magazines such as Time, Newsweek and Men's Health. Demand has far outstripped publishers' hopes, although industry experts say that prices have been driven by the kudos of being associated with a high-profile new device, rather than because anyone yet has any idea of the audience they might reach.

Apple hopes that the iPad, designed as a larger version of Apple's iPod Touch, with additional features, will carve out a new niche halfway between the smartphone and the laptop computer. It is being marketed as a device for watching video, listening to music, surfing the web and playing games, as well as an e-reader for books, magazines and newspapers.

Customers in the US have been able to pre-order the device since last week, and an estimated 200,000 orders have already been received, but it is impossible to predict how many eventual purchasers will download magazine and newspaper apps. Some, like The New York Times, will be free, while magazines are planning to charge per issue and The Wall Street Journal is believed to have set a subscription fee of $17.99.

A recent report by the market research agency comScore provided succour to publishers who hope that the iPad will generate a significant new revenue stream. It found that one third of likely buyers of the iPad were likely to read magazines and newspapers on it.

However, the iPad will also be connected to the internet, where similar content is available for free, suggesting that publishers will have to fill their apps with exclusive content to woo users.

"The tablet and e-reader market is developing at a breakneck pace right now, and Apple's entry into the market is sure to accelerate mainstream consumer adoption," said Serge Matta, comScore executive vice-president. "Only time will tell exactly how consumer behaviour will change, but there are substantial opportunities for those in the digital content ecosystem."