Apple hones new iAd mobile advertising network

Apple is closely examining music, video, book and application downloads to create “behavioral profiles” to improve targeting for its new iAd mobile advertising network on iPhones. Profiles include demographics, application preferences, musical choices, movie and TV genre interests and location. Currently, the iTunes digital storefront serves more than 150 million customers. Bloomberg quotes Rachel Pasqua, director of mobile marketing firm ICrossing, who stated, “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."

One such campaign is Unilever’s for Dove Men+Care soap. The campaign, which is aimed at married men in their late 30s with children, is overlaid with information gleaned from iTunes for more accurate targeting.

The much-ballyhooed launch of iAd on July 1 rolled out an “A” list of brand partners, including Nissan, Unliver NV, JC Penney, Best Buy and AT&T, each of which are spending a minimum of $1 million to more than $10 million for exclusivity within their industry vertical. Apple is charging $10 per thousand impressions for each iAd banner as well as a cost-per-click fee of $2.

Apple’s iAd is in direct competition with Google, which purchased mobile advertising company AdMob last year and is a leader in online advertising. The rivalry is already heating up around issues of privacy. Apple does not share information on individuals but allows advertisers to market across “buckets” of iPhone applications based on users’ characteristics.

Bloombergreported that Federal Trade Commission officials are “preparing to review allegations that Apple is trying to trammel rivalry in mobile advertising.” At issue is app developer instructions that AdMob claims will prevent programmers from using Google/AdMob advertising software on the iPhone. AdMob alleges that the new instructions “limit what information developers can share with third-party marketers,” which helps Apple keep user-behavior data from rivals such as AdMob.

The rivalry revolves around a mobile advertising market estimated to triple to $1.56 billion in 2013, according to eMarketer, which also predicted that U.S. mobile advertising spending will grow to 43 percent this year, to $593 million. Meanwhile, Bernstein Research estimated that iAd could produce revenues of $825 million. Apple is expected to generate approximately $58 billion in global sales this year.