Apple iAd May Compete With Google For Ad Revenue Levels

Apple has recently revealed news on the iPhone OS 4 update.  The more interesting part of this news for marketers is the new development of iAd – an advertisement opportunity to allow ads to be created and used within apps on the iPhone.

What the difference between this and ads being served by Google and Yahoo is is that the ads are allowed to be developed similarly to applications.  The ads will be served from inside of apps on the iPhone without ever leaving the app.  They will be stand-alone interactive experiences, so a creative advertiser could make an ad with videos, sound clips, even an independent app like a game.  The other detail that makes this interesting is that Apple is offering 60% of revenue from the ad sales to the developer of the application hosting the ad.

The potential for this is staggering.  iPhone application developers could put in ad opportunity inside of their app, and then give away the app for free, getting revenue fully from the ads in their application.  Google may have some new competition to worry about stepping into their established advertising territory.

We’ll have to see how iAd works when OS 4 is released.  For more details on specifics of the ad potential, you can check out this Gizmodo article.