Apple iAd To Revolutionize Mobile Advertising

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Update: Toy Story 3 iAd demo video embedded below.

Every time Apple announces something new, it’s probably groundbreaking. Yesterday’s iPhone OS 4 announcement was yet another example, especially with its number 7 “tentpole” feature – the iAd. We covered it 2 weeks ago and it was already coined as “next big thing” by Apple then.

Judging from Mr Jobs‘s keynote presentation, the iAd is indeed going to be the “next big thing” and we’re excited by how it could contribute to the growing mobile advertising market (or even revolutionize it).

In short, Steve Jobs explained that iAd’s app ads will achieve the right balance between being interactive and emotional. He used the analogy that advertisements from the TV are emotional while flash ads on websites are interactive. The new iAd will strive to achieve both, like how the graph below depicts.

iAd Demo

To illustrate this, Steve Jobs used a Toy Story ad as a demo. Notice the Toy Story ad at the bottom? Clicking on it will not direct you out of an app, the ads will stay within it.

“We have figured out how to do interactive video content without ever taking you out of the app… We think people are going to be a lot more interested in clicking on these things” says Steve Jobs.

iAd Demo Video

1 Billion Ad Impressions

Apple would soon have about 100 million devices out in the market (iPhones & iPod Touches). He explained that a bulk of our mobile activities are performed on applications, which we spend an average of 30 minutes per day on. If 10 ads were to appear on each device per day, that would make up 1 billion ad impressions daily. This promising statistics would spur iPhone developers to incorporate iAd ads into their applications. The ad revenue will be shared at a 60:40 ratio, with the developers getting the bigger share.

Summing Up

Apple has shown through its demo how iAd could revolutionize mobile advertising through its gorgeous app ads. But would placing ads on iAd be affordable? Google Adwords strives on affordability and its self-serving user-friendly interface. Anyone can create a text ad. But not everyone can create an app ad. We shall see how Apple tackles this issue.