Apple Launches 'iAd,' Mobile Ad Platform for iPhone and iPad

Apple has announced it is launching an in-app mobile advertising product, dubbed “iAd,” which it says will enable advertisers to provide far more “engaging and emotive” experiences to users, while more successfully remunerating developers. The ad formats will function on the iPhone, iPod Touch, and newly launched iPad product.

Speaking at a press event in California this afternoon, Apple CEO Steve Jobs unveiled the new ad platform, which he said will be “built in” to the new iPhone operating system, OS 4, which is due to be released this summer, and rolled out to the iPad in the Fall, according to live reports.

Apple will sell and serve the ads itself, with a simple 60/40 split in favor of the application developer. The platform is likely to make use of technology from mobile ad network Quattro Wireless, which it acquired in January. Ads will apparently make use of HTML5, but the company did not provide any details on how ads would be sold, tracked, or measured.

During the event, Jobs demonstrated a range of example ads from brands such as Disney, Nike and Target. Clicking through on banner-like placements embedded in a news application launched the advertiser content, which essentially took the form of mini branded applications in their own right, featuring video, games, and other interactive content.

Jobs continued by saying the company’s intention is “to change the quality of the advertising” currently available on mobile devices such as the iPhone – which he said “sucks.” He also said he aimed to provide ads with greater “emotion,” while retaining the interactivity that has become synonymous with digital and Internet advertising.

According to Jobs, the average user spends 30 minutes a day using applications. He suggested therefore that serving an ad every three minutes would result in a billion impressions a day, creating “an incredible demographic.”

The announcement could have big implications for existing mobile advertising providers and networks such as AdMob and Millenial Media, which have built businesses on serving ads into iPhone applications. If developers can monetize their products more effectively using Apple’s platform, they’re more than likely to do so. Apple would therefore be afforded a huge amount of power in the mobile space, even against competitors such as Google.

Google itself announced that it was acquiring mobile ad network AdMob in October in order to kickstart its mobile advertising aspirations. Jobs conceded that Apple had attempted to purchase AdMob, but was beaten to it by the search giant. That purchase is still pending approval following scrutiny from the FTC and Congress.

Apple gave no indication of the pricing model for its iAd platform – for instance, whether it will be sold on a cost-per-click or CPM basis. Apple didn’t immediately respond to a press inquiry.