Apple takes aim at Google with the launch of iAds
Friday 09 April 2010 | By Heidi Scott, Gosh! Media Copywriter
In a move that will have sent shivers down the spines of Google's top executives, Apple announced yesterday that it will deliver interactive, in-app advertising to iPods, iPads and iPhones this summer.
At the unveiling of the iPhone OS 4.0 software in Cupertino, Apple CEO Steve Jobs announced the launch of iAds, Apple's new in-app advertising service that will share revenue with developers.
Seemingly not content to take on just the mobile phone, handheld console and eBook industries, Apple has now set its sights on taking the ad networks too.
It's all fuel on the fire of the long-standing feud between Apple and Google. The spat began when Google started to encroach on Apple's territory with products such as Android, Chrome and then Chrome OS. Now with the launch of the iAds mobile advertising platform, the gloves are definitely off in Cupertino and Mountain View.
Jobs explained that Apple wanted to create advertising opportunities that combine interactivity and emotion. While Google is focused on ads delivered in the browser on mobile Web pages, Apple is taking the in-app route and Jobs made some compelling arguments in favour of this approach. He said that the average iPhone user spends 30 minutes a day using applications. Unlike mobile ads inside iPhone apps - which annoying whisk you away from the app and into the browser if you click on one - iAds will sit at the bottom of the screen in an app but users dipping into them will be just one touch away from returning to the app.
Apple's strategy is to give developers and marketers a way to incorporate compelling ads in iPhone applications by essentially allowing them to build an app within an app. Rather than displaying a flat banner or video clip, the iAd Steve Jobs demonstrated for Toy Story 3 looked more like an app or microsite, featuring video trailers, interactive elements and even simple games.
Importantly, the new service will allow developers to get 60% of the revenues, which will be a boost to those struggling to build businesses around free iPhone apps. And iAds will presumably command premium prices within applications, as compared to Web ads.
Users may not be so happy. Software has traditionally been an ad-free zone but now ads will be creeping into everyone's favourite apps. As iPhones are designed to be pocket-sized, this means that they will be giving up approximately one eighth of their iPhone screen to ads they may be totally uninterested in.
Google put a brave face on the news, issuing a statement yesterday that read:
"This is more evidence of how quickly mobile advertising is evolving and growing."
Some industry pundits believed this comment was actually intended for the US Federal Trade Commission, which may yet block Google's $750 million acquisition of AdMob, a company that Apple had also tried to snap up.
Google could respond by offering something similar within Android applications, but this would go somewhat against its philosophy of offering an open software platform. As Steve Jobs pointed out in Apple's press conference, Google's key strength - search - is not the primary way of discovering new products and services on mobile devices. Even if the AdMob deal goes through and Google can sell Web-based ads in iPhone apps, Apple will still offer the premium experience, and give developers a hefty slice of the iAds revenue.
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