“We think most of the mobile advertising really sucks”. With these less than eloquent words Steve Jobs tells us what he thinks about current mobile advertising methods. During the launch of the new iPhone OS 4.0 operating software in early April he unveiled Apple’s new business idea: iAd. This feature will allow developers to integrate advertising into their apps in innovative ways. Jobs reckons that every iPhone and iPod Touch owner spends on average 30 minutes a day in apps. If during that time an advertising message is visible just every three minutes, it means that for the100 million devices already sold there will be one billion ads a day when iAd is launched in summer 2010 – an enormous potential.
Advertising in iPhone apps is nothing new. Until now though, clicking an advert would close the app and launch the browser to take you to the advertiser’s website (landing page). Understandably, this didn’t go down well with app users, so adverts were mostly ignored. Although the multi-tasking capability of OS 4.0 means that the app is no longer fully closed, Apple is aiming to create an entirely new level of advertising.
The interactivity of online advertising should be linked with the emotions of, let’s say, TV ads. To achieve this, developers can easily integrate advertising into their apps.
Source: Apple Keynote Speech, April 8, 2010
Steve Jobs demonstrates the possibilities of this feature using an Entertainment News app. As shown on the left-hand image, a banner ad for the movie “Toy Story 3″ is located at the bottom of the screen – nothing new so far. Now, if you click on the banner the app doesn’t close but opens in the space of the advertising partner – like an app within an app – where a variety of content can now be integrated: videos, games, info, etc. In addition, wallpapers, apps, etc. of the advertising partner can also be downloaded directly from within the advert – without having to leave the actual app. To get back to the original app, simply click on the close button “X”, and continue where you left off.
Apple sells and operates the advertising space and takes 40% in revenues. The rest goes to the developer. iAd will be launched as a feature of OS 4.0 for iPhone and iPod Touch this summer and for the iPad in autumn 2010. If it results in consumers no longer being annoyed by the adverts, and perhaps even viewing them as extra added value, Apple will have once again come up with a lucrative innovation.
