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Yesterday, along with the iPhone OS 4.0, Steve Jobs introduced iAd, Apple’s own mobile advertising platform that according to Apple, “combines the emotion of TV ads with the interactivity of web ads”. This new platform, that will directly compete with Google’s new mobile ad platform, enables users to view fun, interactive in-app advertisements that unlike current ads do not require the user to go into a separate browser to view content. The average iPhone user spends an estimated 30 minutes inside apps everyday so if an ad is displayed every three minutes there would be over one billion ad impressions everyday on all of Apple’s 100 million devices in use. The new ads will be different than traditional mobile ads. They will feature interactive and video content within the ad enabling instant video playback, sound clips, and even games. For example, a Nike ad lets users watch videos, design their own custom shoe, or find a store all within the app. Apple plans to sell and host the ads while giving developers 60% of the revenue. Since Apple devices do not support Flash media all interactive ads will be done through HTML5. The ads will also be targeted towards specific users based on the content in their app.

I think iAd is a great idea for Apple to release now for a number of reasons. First it keeps the actual prices of the apps down while allowing app developers to get paid. As the developers get paid more for their apps they are more likely to develop better apps or provide better support for current apps. Also it gives magazines and other publications a good reason to move to the iPad. They make their money and run their business from advertising sales and these specialty apps give them an incentive to transition to their product. Lastly, this new platform will be very profitable for Apple. It will be very interesting to see how the new ads evolve, how they are received by users, and what impact they have on the industry.

The LA times just announced that Google (who else) has won the patent for using location based data for advertising. The patent, numbered 7,668,832, was filed way back in 2004 and was just now awarded to Google by the U.S. Patent and Trademark Office. The patent will allow Google to build tools for advertisers that use location information to determine ad placement, track performance in certain areas, target customers based on their location, and ultimately improve the effectiveness of their campaigns. This could have far reaching effects on smartphone users with location aware phones making them susceptible to a constant barrage of ads as they go about their day. The technology could determine based on location if an ad should be sent and what content is appropriate making it ideal to reach your target market directly Google hasn’t announced exactly what they will do with the patent but it will definitely change the mobile user’s experience.