Is iAds the new AdWords?

Apple vs. Google: It’s really starting to look like a clash of titans. The two companies have dueled in numerous marketplaces – smartphones, operating systems, and the like – but their most recent battlefield is a market upon which Google built its massive success. It’s also a market from which Apple hopes to draw 10% of its revenues by 2012. This market is none other than advertising.

The world of internet advertising has been conventionally dominated by Google. As times changed and people began using internet from their phones, Google adapted its ads to show up on mobile devices. However, AdWords ads remain at the mercy of Apple when it comes to iPhone users, as they could lock them out of the system at any time.

Apple, for the time being, isn’t going after Google directly. The company is targeting users in another mobile device activity that is swelling in popularity – mobile applications. Mobile device applications, known as ‘apps’, are becoming as popular and well-used as the internet on smartphones, and Apple is well-aware of this.

Thus was born iAds, the platform for advertising on apps. So far, it’s been a hit with advertisers: in its first 8 weeks of release, Apple has over $60 million of committments to advertise on iAds in 2010 – much of it from large companies such as Unilever and Citigroup. Analysts feel that this strong showing so early in the development of iAds is promising, even a long-term threat to Google. However, this is not to say that Google should be worried too much – $60 million is nothing compared to the billions of dollars of annual revenue Google generates from AdWords.

While it is too early to tell just how great of a success iAds will be, things are already look up for the newest addition to Apple’s product offering. It is also too early to say whether or not Google and Apple will end up fighting for control of the market, as there is still plenty of opportunity in the market itself, and many niches and media for each company to develop.