Steve Jobs describes the iAd as a way of helping its more than 185,000 app developers for Apple's App Store to "make some money to keep their free apps free" - to be more exact, "an industry standard of 60% revenue split". Even though "it sucks" (in Jobs' own words), Apple's version of mobile advertising which is built over the iPhone OS 4.0, has to be incorporated in its mobile products. But will it make money for app developers, advertisers and Apple?
In an exclusive interview with Reuters, Carol Bartz (Yahoo Inc's CEO) bluntly said, "That's going to fall apart on them. Advertisers are not going to have that type of control over them. Apple wants total control over those ads.", in reference to Apple's iAd.
That has always been the perception on how Apple wants to build its "walled" empire. It wants to create its own version of the web. You can't blame Steve Jobs though. Eric Schmidt controls its version on the web through Google. Mark Zuckerberg has precariously been doing that; tinkering with Facebook's privacy. Even though Apple has started to open up (forced to); with its loosening up of control over how developers create iOS apps, Apple wants to retain most of the control. But advertisers want more freedom with their money.
Steve Jobs has marketed iAds as an advertising platform which harnesses its user's need for very specific apps to access data from the Internet. He explicitly differentiates this from a desktop search advertising model where Google's revenue comes from. This is also an advertising variant from Facebook's and Twitter's versions of making money through display ads. In reality, web advertising has been retrofited to the uniqueness of each individual marketing platform.
The difference however is in the amount of time Internet users spend on these different platforms. Steve Jobs has said that the average iPhone user spends 30 minutes with these apps everyday. According to a Nielsen Online's June 2010 report on Internet usage, the average Facebook users spends 4 hours and 39 minutes (with 87 million visitors) during the month. On the other hand, visitors spend an average 3:15 on various Yahoo properties, 2:43 hours on AOL, 2:31 hours on Google and 2:12 hours on Microsoft during the same time.
"Emotion plus Interactivity" is Steve Jobs vision of the iAds. It wants to be somewhere between generating the emotions of TV Ads and harnessing the interactivity of Internet Ads. He estimates that through the potent combination of its advertising platform plus the ability to deliver 1 billion ads per day (through Apple's 100 million smart mobile device users - and rapidly growing), iAds will succeed where others have fallen short of expectations.
Steve Jobs knows too well that Google and other search engine giants aren't really making strong cases with their search advertising platforms (with only an estimated 10 percent conversion rate). In the end, it will not be a question of who's in control. It will be about how much more money Apple brings to the table for everyone involved. This is interesting too see. So interesting that Google has also incorporated Google Adwords for smartphone users in Google Mobile Ads.
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