Apple is adding its own advertising system to the next version of software that will power its iPhone, iPad and other mobile gadgets. iAd will allow developers of the programs available in Apple's App Store—many of which are free or cost 99 cents—to include ads in their software. Apple will sell the ads, with developers who create the apps getting 60% of the revenue of any mobile ads, and Apple taking the remainder. The debut of iAd is likely to pose a challenge to existing companies that serve up ads in mobile devices, such as AdMob Inc., which Google announced it would acquire last year for $750 million.
Overall, the mobile ad market remains small. Marketers have been slower to buy mobile ads than expected, largely because consumers aren't visiting mobile Web sites in meaningful numbers and the process of creating mobile ad campaigns is technically and logistically challenging. U.S. advertisers only spent $416 million on mobile ads last year—a fraction of the $22.4 billion U.S. online advertising market.
Read more at the Wall Street Journal.
