Apple iAd will use targeted iTunes data

Are you wondering why your iPhone app is showing you Justin Bieber ads? Well, it looks like Apple iAd – the mobile advertising platform for iOS 4 – will be using data from the 150 million iTunes users to deliver targeted ads.

This means the company will be culling the data from Apple iTunes to figure out trends in music, media and applications. The company said it doesn’t single out users but instead, it will use this data to offer marketers “buckets” of users. This could include males over 30 who like action films or mid-20s females who like social networking applications.

Apple says the targeting is fairly standard and I don’t think this is too much to get worked up over it using iTunes. If anything, I’d be more concerned that the Apple iPhone tracks your location data and this can’t be turned off. We’ve already seen some governmental inquiries on this topic.

Still, using iTunes data for targeting is somewhat necessary if Apple iAd is going to be successful. We’ve already seen this mobile ad platform in campaigns from Nissan and it does offer some intriguing possibilities. Because Apple iAd is part of the operating system itself, it enables marketers to include media-rich elements like full animations and motion controls. Check out Nissan’s use of Apple iAd in the video below.

Apple is obviously new to this game but the mobile advertising market has the potential to be extremely lucrative. That’s why rival Google spent $750 million to acquire AdMob and that’s why Microsoft is pitching Windows Phone 7 to marketers as an “ad-serving machine.”

Of these companies, Google is probably in the best position to capitalize on the mobile ad market because it makes most of its money off its dominant online ad business. The mobile space is going to be different though, as you won’t just be able to bring banner ads to phones and be successful. It will be fun to watch them duke it out.

[Via BusinessWeek, photo]

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