Apple is using the immense amount of data that it has collected from its 150 million iTunes accounts to help its iAd advertisers target their pitches to users of iOS 4 devices.
"Apple knows what you've downloaded, how much time you spend interacting with applications and knows even what you've downloaded, don't like and deleted,” iCrossing head mobile marketeer Rachel Pasqua is reported to have said on Apple's iAd data leveraging here.
Demographic data is pure gold to advertisers attempting to target their offerings to receptive audiences. If you, for example, have downloaded a Dora the Explorer game, odds are you have children in your household; if you've installed a Bloomberg stock tracker onto your iPhone, there's an even chance that you might be flush enough to be a target for a Nissan Leaf iAd pitch.
Apple won't be sharing your individual, personal data, according to Bloomberg. Instead, Apple will make available "buckets" of applications to advertisers, with those selections based on users' purchase histories. We can imagine, for example, that purchasers of multiple fart apps — 701 and counting — might be offered tickets to Jackass 3-D when it's released this October, while those inducements might be withheld from iTunes accounts whose music purchases are heavily weighted with offerings from Deutsche Grammophon.
As Google has proven, there's plenty of good money to be made in online advertising, and mobile ads are fast-growing segment. Apple's iAd platform is its attempt to carve a hefty chunk out of that market, which marketing firm eMarketer projects will grow to $1.56bn by 2013.
Apple is aggressively promoting its iAd platform to both advertisers and developers. When chief executive Steve Jobs detailed the platform on June 7 at the announcement of the iPhone 4, he said that its core value was "To help our developers earn money so they continue to create free and low-cost apps". Perhaps — there's a good argument to be made that the more "free and low-cost apps" that are available for Cupertino's mobile devices, the more those devices will continue to leap off the shelves of Apple's retail store.
Also, when Jobs introduced the iAd platform back in April when he unveiled what was then called iPhone OS 4.0, he said that Apple had "no plans to become a worldwide ad agency". At that time, however, he also noted that his goal was to have one billion ad impressions per day by the end of the year — which sounds rather like a worldwide ad agency to this observer.
Apple hosts and sells iAd ads, and provides 60 per cent of the take to the developers of the apps that host them. As Jobs told his audience of devs on June 7: "All you have to do is tell us where to put them, and then make money." Forty per cent of that money, will, however, stay in Cupertino.
As Apple has said, its iTunes App Store isn't a money-maker, but instead a break-even proposition designed to entice developers. How close to break-even the iAds platform will be, however, remains to be seen.
And there's still a legal thicket that Jobs & Co must negotiate before they can confidently project future iAd earnings. The US Federal Trade Commission, for example, is reportedly considering a possible investigation of Apple's restrictions on developers sharing statistical or demographic information with advertising-service providers other than Apple.
Referring to the change in Apple's Developer Program License Agreement that instituted these restrictions, Google's head mobile-advertising honcho Omar Hamoui, the founder and CEO of AdMob, which Google swallowed last November, blogged: "Let's be clear. This change is not in the best interests of users or developers."
iAds may have launched last Thursday, but it's not yet clear whether Cupertino will be able to keep its devs on the reservation — those license-agreement restrictions may run afoul of the FTC. What is clear, however, is that if you've ever made a purchase from the iTunes music or apps stores, your personal buying history now resides in one of those aforementioned "buckets". ®