April 15, 2010 Jason

Can Mobile Advertising Work?

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Apple recently introduced a new method of embedding ads into their new media darlings, the iPhone and the iPad.  The ad delivery is integrated into the operating system of the phone, which will enable 3rd party developers to create ads around the apps.

According to Apple, one exciting part of this process is the ability to merge the emotion that traditional media ads provide with the interactivity that online advertising can offer.  The ads can be part game, part ad, part  video and more – the opportunities are out there for programmers to create some interesting ads.  Since the user won’t need to leave the app to action the ad, the expectation is an increased level of engagement.

Apple is betting that search based ads will not see the success that desktop based searches have had (Google has something different to say – and is currently testing a mobile search product), and with the integration of the ad framework directly into the OS of the mobile devices, you can expect to see a flurry of activity in the app world in the next few weeks.

The ads will be managed and hosted by Apple, who will keep 40% of the split.  There are even some interesting patent rumors about subsidized hardware, where the equipment will shut down if the user doesn’t interact with the ads.

Are integrated apps the way to go?  Will you be inclined to pay full price for an app when there is a much cheaper, ad-supported option?  What about your customers – which one will they choose?

With an estimated one billion impressions each day by this summer, this is probably something to think about before your competition does.

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