February update: We have followed up with Apple numerous times since this original post for more clarification and have finally received a firm answer to explain the situation. The whole of the iAd network is going away — developers will not be able to include any ad banners in their apps after June 30. Developers will have to find a new ad company to continue monetizing their apps using ads, as iAd will no longer function. Original story below …

On its developer news blog, Apple has announced that it is closing the iAd App Network on June 30th. Targeted at smaller publishers, the iAd App Network let developers pay reduced rates to feature advertisements for their own App Store apps across the iAd publisher network.

The news follows a report from Buzzfeed that Apple is closing iAd campaign sales and converting all inventory to automated system. Apple says that if developers want to keep advertising on iAd until that time, they have to make a campaign from scratch using iAd Workbench. New apps will not be accepted into the iAd App Network Program.

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The announcement is confusingly worded, but it does not mean that all of iAd is being discontinued. Developers will still be able to show iAd banners in their application; it’s just that the inventory for App Store apps to advertise will no longer exist. This is a blessing and a curse — it won’t help iAd improve its fill-rates but the CPM on these type of ads was significantly lower as the buy-in from the publisher side was also lower.

In the original Buzzfeed report, Apple employees were quoted as saying that developing campaign marketing was something Apple “wasn’t good at”. Apparently, the plan is to move iAd to a fully automated system closer to a digital ad network like Google AdSense where publishers and advertises freely start campaigns with automated revenue and fees.