Apple to debut iAds on July 1; Over $60 million in 2010 commitments from leading global brands

invisibleSHIELD case for iPadApple today announced it will debut its iAd mobile advertising network on July 1 on iPhone and iPod touch devices running its iOS 4 software platform. iAds combine the emotion of TV advertising with the interactivity of Internet advertising, giving advertisers a dynamic and powerful new way to bring motion and emotion to mobile users. iAd will kick off with mobile ad campaigns from leading global brands including AT&T, Best Buy, Campbell Soup Company, Chanel, Citi, DirecTV, GEICO, GE, JCPenney, Liberty Mutual Group, Nissan, Sears, State Farm, Target, Turner Broadcasting System, Unilever and The Walt Disney Studios. Apple has iAd commitments for 2010 totaling over $60 million, which represents almost 50 percent of the total forecasted US mobile ad spending for the second half of 2010.*

“iAd offers advertisers the emotion of TV with the interactivity of the web, and offers users a new way to explore ads without being hijacked out of their favorite apps,” said Steve Jobs, Apple’s CEO, in the press release. “iAds will reach millions of iPhone and iPod touch users—a highly desirable demographic for advertisers—and provide developers a new way to earn money so they can continue developing free and low cost applications.”

“iAd will allow Citi to reach millions of people on their iPhone and iPod touch,” said Lisa Caputo, executive vice president and CMO, Citigroup, in the press release. “iAd gives us a remarkable level of creativity for creating ads to connect with our current and future customers in a more interactive style than ever before.”

“iAd is going to revolutionize mobile advertising,” said Rob Master, North American media director, Unilever, in the press release. “With iAd, we’ve been able to create some of our most powerful and compelling ads ever. iAd is the perfect mobile format to reach and engage with our customers.”

iAd, which is built into iOS 4, allows users to stay within their app while engaging with the ad, even while watching a video, playing a game or using in-ad purchase to download an app or buy iTunes content.

Developers who join the iAd Network can easily incorporate a variety of advertising formats into their apps. Apple will sell and serve the ads, and developers will receive an industry-standard 60 percent of the iAd Network revenue, which is paid via iTunes Connect.

iAds require iOS 4, which will be a free software update via iTunes 9.2 or later for iPhone and iPod touch customers. iOS 4 will work with iPhone 3G, iPhone 3GS, iPhone 4, and second and third generation iPod touch (late 2009 models with 32GB or 64GB).

*Percent of forecast based on an annual run rate basis, starting on July 1. US Mobile Display Advertising forecast from the report by JP Morgan, “Nothing But Net—2010 Internet Investment Guide,” January 3, 2010.

Source: Apple Inc.

11 Comments

  1. I don’t look at ads. But I think this is something great. It makes money for devs. It’s a new class, new quality of ads which will make 1) the ads better, perhaps even interesting and enjoyable to watch, 2) will make the ads interactive, again more interesting, 3) make the ads easy to stop and exit them without upsetting your original app and workflow.

    Best of all worlds, as I see it:
    1 – keeps cost of apps low or free (by helping devs subsidise their efforts).
    2 – supports innovation and apps and best of class apps AND ads on the platform.
    3- when you don’t want to view an ad that you’ve launched, it’s easy to stop it and continue your work – easy exit without interrupting everything. It’s not forcing you to watch any ads at all, and making it easy to exit any ad you do watch.

  2. $60 million and Apple hasn’t even launched it. Apple keeps adding new revenue sources. I’m not sure that analysts will be able to understand it’s ramifications.

  3. How in the world can a small company afford to buy iAds.

    We can afford to put mobil ads in apps with Google Adwords for our local community.

    I understand it would cost a pretty penny to design iAds. But I hope someday the price point to buy iAds comes down for smaller companies.

  4. Anyone else think that Google will announce something similar with Android Apps later this year? Another prediction – when launched their program will be a Beta release.

    Cheers.

  5. Google is the new enemy of Apple. It ads monopoly on the web enables it to create mischief not only for Apple, but also to the competitiveness of America. Just as those companies that jumped on the Windows bandwagon failed to innovate but also gradually lost market share to Asian competitors, Google is repeating the evil of Microsoft ten-fold.

    If the iAds is able to cut the feet of clay off from Google, this will free American companies from being seduce into mediocrity by Google. This will be a gift that America desperately needs to remain a technologically advanced country.

  6. WHERE IS THE OPT-OUT OPTION?

    If Apple offered an ad-free plan — even for an up-front fee — I would opt for it.

    Nothing degrades the user experience more than advertising, which is apalling for a company that used to pride itself in excellence of user experience. The iAd “feature” is one that begs to be “jailbroken”.

  7. Mike,

    Dead right! I can’t stand ads and as a long time mac user I really don’t feel like having ads rammed down my throat. Oh, and I forgot to mention that I don’t have any shares in Apple so I don’t have a conflict of interest when I make an Apple related comment

  8. I don’t want any ads while I’m watching a movie, playing a game, or even surfing the web, be whether it’s iAd or AdMob or whatever!

    Ads are a nuisance at best. I know they create revenue for developers, and are v important to those who create free apps, but I have a feeling there won’t be two versions of an app anymore (free version with ads, and paid ver without ads).

    Instead, developers will make more money with ads that they won’t want to sell apps without ads.

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