iAds and iPads: New Directions in Mobile Advertising (and Search)

It’s been a busy couple of weeks for Apple and its faithful masses. Unless you’ve been hiding under a rock, you’ve likely been subjected to the media frenzy around the iPad — arguably the harbinger of an entirely new device class.

Last week came the second announcement in that one-two punch: iAd. Though admittedly less sexy and overshadowed by the iPad, it’s a big deal. It will be looked back upon as a bold but logical step for mobile ads and how they’re built, distributed, and displayed.

True ‘in-App’ Ads

Its deep integration with the mobile device and operating system is perhaps iAd’s biggest advantage. This enables the creation of ad units that reside wholly within the app.

As a result, ads become more app-like by utilizing native capabilities of the phone. From an in-app banner ad for example, maps, games, video and animation (using HTML5, of course) can be launched without taking you to a separate place.

Previously, the app had to be closed (or pushed into the background) so that another function could be opened. This most often involved launching the browser to display an advertiser’s mobile Web page.

iPhone iAds

The iAds will include banners for film campaigns that launch app-like menus for trailers, games, promotions and nearby theaters. The latter is indicative of important local tie-ins to mobile search, and was present in each of Apple’s on-stage demos.

These included Nike, which had banners that launched rich pictorials of sporting history. Branding is then equally matched by direct response tools, like finding the closest pair of Air Jordans in stock. This creates interplay between traditional branding and the “utility” of search.

Interaction and Emotion

What’s Search Got to Do with It?

The implications for search don’t end there. For all the reasons mentioned, iAd is built on Apple’s view of an app-centric world. This involves the growing “apps vs. mobile Web” debate that’s driving the products we use and how we search on the mobile device.

In the other corner sits Google, pushing for a mobile experience where the front door is the browser. This has advantages for developers, as it’s cheaper and easier to build mobile Web site than apps. But it misses out on apps’ more functional and integrated experience.

On this note, Steve Jobs couldn’t resist firing a shot across Google’s bow during the iAd announcement.

“When you look at ads on a phone, it’s not like a desktop,” he said. “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.”

Whether he’s right or just being provocative, iAd now chalks another advantage in the apps column. Points scored for being advertiser-centric (more interactive ads), user-centric (less bouncing around between apps), and developer-centric (keep users within your app longer).

Mobile Ads that Don’t Suck

Better monetization for developers was specified by Jobs as a driver for iAd. But behind this virtuous position is also the creation of a new and exploding revenue stream (60/40 revenue split with developers). Then again, there’s virtue in raising industry standards.

“We have a lot of free or reasonably priced apps. We like that, but our developers have to find ways to make money,” Jobs said. “So [they’re” putting ads into apps, and for lack of a better way to say it, we think most of this kind of advertising sucks.”

He’s right. Better mobile ad standards have been held back by technical bottlenecks like GPS ubiquity and platform fragmentation. But it’s also a result of Madison Avenue’s inability to wrap its collective brain around mobile.

This includes banners, search, video, and the gamut of online advertising we’ve seen evolve over the past decade. If one company can get advertisers to “think different” about ads more logical for a new kind of device (not a computer), it’s probably Apple.

Apple iAd Overview

Meanwhile we’ll have to wait for answers to myriad questions that remain: How will it position itself to sell, host, and deliver ads? How will advertisers upload location and inventory data for the local search scenarios above? And what will this mean for other ad networks operating within iPhone apps, most notably Googmob?

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