Although mobile marketing is still relatively new, revenues generated from mobile ads are expected to increase due to the increasing popularity of smartphones and tablets. In last week’s introduction of the iPhone OS 4.0, iAd was introduced as Apple’s own mobile advertising platform. Since the average user spends 30 minutes per day inside apps, 1 ad per 3 minutes could potentially reach 1 billion consumers.
iAd will allow developers to create more complex and interactive ads within apps. For example, videos can be viewed and games can be played without leaving the app. Users can also go back to the app by closing the ad at any point.
Since the iPhone OS doesn’t support Flash, iAd gives developers an opportunity to produce the type of interactive, Flash-heavy ads that marketers love and have become a standard on the web. However, iAd will require developers to give up 40% of ad revenue. Although ads will be be subjected to approval by Apple, there likely will not be the same amount of restrictions that are in place like there are for apps.
Although iAd still allows third-party ad networks to place ads within apps, a new clause (Section 3.3.9) in the developer agreement will limit the control that third-party developers (i.e., AdMob) will have over their ads. Namely, they will not have access to valuable metrics such as the number of times the ad has been viewed, or how long users looked at the ad, or whether the user had interacted with the ad.
Google, eyeing AdMob as a business acquisition, is undoubtedly looking to expand in mobile marketing –most of its revenues are generated from online advertising anyway. But with iAd, it appears that Apple is determined to enter mobile marketing on its own and limit the ability of its competitors (namely, Google) on its popular mobile products.
However, Google is already firing back by providing support for AdWords on the iPad. Effectively, this will let users run marketing campaigns on the device (which has already sold 500,000 units) independent of iAd.
