When announcing iPhone OS 4.0, Steve Jobs said that Apple has "no plans to become a worldwide ad agency" - but it appears that he's planning to do just that. Jobs' goal: to get one billion ad impressions per day by the end of the year.
Among the 100 new features that Jobs promised for iPhone OS 4.0 is iAd, a service that will allow developers to place interactive, app-like ads inside their applications.
Other new features include multitasking, folders for grouping similar apps, enhancements to the iPhone's Mail app, improvements in the OS's enterprise-oriented services, social-networking capabilities for gamers in a new service called Game Center, and an iPhone version of the iPad's iBooks capability.
But when speaking to a few hundred of his closest friends gathered at Apple's galactic nervecenter in Cupertino on Thursday morning, iAd was clearly the apple of Jobs' eye.
Jobs promised that the iAd platform, the client side of which is built inside iPhone OS 4.0, will allow developers to create ads that combine the interactivity of standard web ads with the "emotion" provided by television ads.
He acknowledged that mobile advertising already exists, but: "We think most of this mobile advertising really sucks," adding with an air of faux modesty that Apple thought it could "make some contributions" and by doing so could help devs better monetize their free apps.
Jobs also wants to keep users inside their apps and not "yank" them out of an app and into a browser-based ad. To accomplish this, the iAd platform allows developers to embed ads inside their apps as they see fit. Clicking on an iAd link won't close the app, but instead launch the iAd, which can then take over the device's UI. You return to the app from which the iAd was launched - which maintains the state in which you left it - by clicking an "X" icon in the top left of the display.
An iAd will be able to take advantage of all of iPhone 4.0's APIs to deliver, for example, an interactive game (think accelerometer control, multitouch support, and more), a video, or any other app-like experience. At the event, Jobs demoed a Toy Story-themed ad that contained a game and sound clips, a Nike Air Jordan ad that provided both a video and an interactive "build your own shoe" feature, and a Target ad that invited a user to answer a few simple questions that resulted in the presentation of a customized dorm room.
An iAd doesn't look like a traditional ad - it looks, instead, like a full-blown interactive app. Since an iAd, for example, has access to such iPhone OS services as the location framework, it could display nearby stores that carry the advertised item or movie theaters - and, of course, the advertised movie's showtimes - within walking distance.
Since the iAds reside inside of apps, Jobs contends, their ability to deliver ad impressions is huge. He did the math for the Cupertino crowd: if an average user spends 30 minutes or more per day in apps on their phone, and if the iAd platform serves them an ad every 3 minutes, and if there are 100 million devices capable of receiving iAds, that could add up to one billion "opportunities" per day.
And seeing as how, according to Jobs, their are currently 85 million iPhones and iPod touches already in the wild, that 100 million figure by the end of the year certainly seems realistic.
One billion ad impressions per day could add up to some serious cash - and Apple plans to give 60 per cent of that cash to advertisers using the platform, keeping 40 per cent in Cupertino to reward Apple's work in hosting the ads.
Apple will, as is its wont, approve the ads before it hosts them. But Jobs was careful to say that since advertisers will be paying to run the ads, Apple's approval process will use "a light touch." What Jobs defines as a light touch, however, wasn't explicitly stated. We'll wait for the Developers License to suss that one out.
Jobs claims that adding an iAd to an app is a simple matter - developers can do it "in an afternoon," he said. He also noted that the ads are all HTML5-based, so Apple won't provide a development platform for ad creators. And, apparently, neither will Adobe, seeing as how their Flash platform remains banned from the iPhone OS.
iAds appears to have been gestating in Cupertino for some time. Jobs admitted that Apple tried to buy mobile-ad broker AdMob, but that Google "snatched" it away from them. Apple then bought a smaller mobile-ad broker, Quattro, instead. "They're teaching us and we’re learning as fast as we can," Gizmodo quoted Jobs as saying.