Apple unveiled iAd, a new mobile advertising platform that will be built in to the new iPhone operating system, iPhone OS 4.0.
Steve Jobs highlighted five key features of iAd: there will be an emphasis on 'emotion and interactivity;' ads will allow users to stay in the app they're using; iAd will be built into the iPhone OS; and Apple will sell and host the advertisements that appear on iAd, sharing 60% of the ad revenue with the developer.
Jobs explained, "We have a lot of free or reasonably priced apps... we like that, but our devs have to find ways to make money. So our devs are putting ads into apps, and for lack of a better way to say it, we think most of this kind of advertising sucks."
He added: (via Engadget)
When you look at ads on a phone, it's not like a desktop. On a desktop, search is where it's at. But on mobile devices, that hasn't happened. Search is not happening on phones; people are using apps. And this is where the opportunity is to deliver advertising is. [...] The average user spends over 30 minutes every day using apps on their phone. If we said we wanted to put an ad up every 3 minutes, that's 10 ads per device per day. That would be 1b ad opportunities per day.[...] This is a pretty serious opportunity, and it's an incredible demographic. But we want to do more than that. We want to change the quality of the ads too.[...]You know the ads on the web -- they're eye catching and interactive, but they don't deliver emotion. What we want to do with iAds is deliver interaction and emotion.
Jobs noted that users are discouraged from clicking on app ads because doing so takes them out of the application they're using. Apple's solution was to create an interface, iAd, that lets users access advertisers' interactive and video content without ever leaving the app.
Huffington Post blogger Larry Magid described the iAd demo Apple showed off, noting that the ad prototype included video, as well as the option to purchase games from within the ad.
During a Q&A with journalists following the iPhone OS 4 event, Jobs clarified that Apple's ambition was not to become an ad company. He also made a dig at Google's acquisition of AdMob. "We do not have plans to be a worldwide ad agency," he said. "We don