Apple to battle Google in mobile advertising
Apple is to rival Google in the mobile advertising market with a new iAd advertising platform to be rolled out this summer.
The announcement follows Apple’s purchase in January of mobile advertising network Quattro Wireless for £196m, demonstrating that Mr Jobs is happy to put his money where his mouth is.
Yet the mobile advertising market is currently tiny, so the acquisition price paid for Quattro is small change for a company currently valued at over £145 billion.
However, analysts say that the potential for mobile advertising is huge and it could transform mobile commerce. Investment firm Piper Jaffrey is predicting a total in-application market for advertising of £450m by 2013, of which iAd could capture £250m.
Mr Jobs’s rationale is that mobile advertising can be tailored to the individual users needs and interests, in much the same way that Google has been able to use data from users of its search engine and gmail accounts to target advertising.
Apple could use the mobile phone user’s physical location as a hook for advertisers – for example Mr Jobs cited a Nike advert incorporating a nearest store locator. But information about a user’s interests can also be gleaned from the applications they choose to purchase.
Steve Jobs’s announcement comes at a time when rival Google’s own mobile advertising initiative has become hamstrung by the US anti-trust authorities.
In November, Google outbid Apple to purchase leading mobile advertising company AdMob for £500m.
“Google came in and snatched them because they didn’t want us to have them,” said the Apple head. Admob already operates on Apple’s handsets.
However, Google’s plans immediately ran into trouble as the Federal Trade Commission chose to review the deal. Months later, a decision is still pending.
The iAd initiative also seems designed to provide a fillip to the growth of new applications for Apple’s handsets.
The Apple chief executive said that 60% of the advertising revenues raised will be passed onto the application developers, creating a major new financial incentive for programmers to generate new functionality for the iPhone, iPad and iPod touch.
“The revenue sharing opens the floodgates for a lot more free applications,” says Mr Wood. “This is an extremely astute move by Apple. I would expect both the number and the quality of applications to grow much more rapidly because of this.”
The rivalry between Apple and Google will partly be decided by the direction that mobile phone technology takes in the future.
Apple stakes its future on the continuing development of applications as the main forum for mobile software, whereas Google expects applications to be supplanted by a web browser that gives users access to the entire internet.




































