During Apple’s iPhone OS 4 event today, Steve Jobs announced the creation of a new mobile advertising platform which will be integrated directly into the iPhone OS. The new platform, named iAd, is designed to allow developers to easily add in-app advertising to their applications by supplying ads through a centralized advertising network without having to implement their own solution. Apple will take care of selling and hosting the ads, providing developers with the industry standard 60% of advertising revenue.
Jobs explained that Apple wants to provide incentives for developers to keep free apps as free, but that ads based on search have not been as successful on mobile devices as they have on the desktop as users spend most of their time in apps rather than searching in a web browser. He went on the explain that the average iPhone user spends 30 minutes each day using applications, and supplying even 1 ad every 3 minutes would equate to 10 ads per day. Jobs notes that with 100 million iPhone users, this presents one billion ad opportunities per day within the iPhone community. Apple is also looking to improve the quality and accessibility of in-app advertising, with more interaction than typical web ads and allowing users to view advertising without being taken out of the application that they are currently using, thereby encouraging users to click on ads without having to worry about leaving the current app.