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You are here: Home / Sales & Marketing / iPhone Location-Based Ads Banned
Apple Bans Location-Based Ads for iPhone Apps
Apple Bans Location-Based Ads for iPhone Apps
By Adam Dickter / CRM Daily Like this on Facebook Tweet this Link thison Linkedin Link this on Google Plus
PUBLISHED:
FEBRUARY
05
2010
Location-finding applications that give iPhone users information about weather, restaurants or traffic are fine. But if they give information to third parties for targeted advertising, the deal is off.

That's the message Apple sent to developers this week. The computer giant posted a message on its Developer Connection blog encouraging its partners to use the core location framework, but only for programs that provide "beneficial information," such as the weather forecast or where to find ATMs.

Back to the Drawing Board

"If your app uses location-based information primarily to enable mobile advertisers to deliver targeted ads based on a user's location, your app will be returned to you by the App Store Review Team for modification before it can be posted to the App Store," Apple warned.

The company didn't explain its position, and a call to Apple's media-relations center was not returned by publication time.

"My internal optimist says they are trying to protect the users," says Jeff Burstein, program manager for Florida-based developer Mobile Applications. "My pessimistic side feels that Apple could be working on their own ad-delivery system for the mobile platform. Time will tell if altruism is their true motivation or just a way of keeping out the competition."

Applications and advertising are increasingly joined at the hip, said Joe Berkowitz, founder of Interactive Moxie, a digital strategy and incubation company, and a consultant to media companies building and launching mobile apps.

"Out of the three billion apps that have been downloaded from the App Store, the bulk of them are free. [The developers] are making money either by getting you to upgrade to the paid version or, in other cases, using AdMob to be able to market their other apps."

But Berkowitz said it appears Apple's new developer policy is intended less for commercial gain than to screen out apps solely intended to target consumers for ads.

"A contrarian methodology to the Android or Palm store where apps are not reviewed or approved, Apple's stance is to use their influence to protect and add value to a consumer's experience with their brands and products," Berkowitz said.

Too Paternal?

But Apple's muscle flexing could have unintended consequences. "It sort of positions consumers as ignorant, requiring Apple to take responsibility for their app safety," Berkowitz added. "My recommendation for folks wanting to utilize GPS within a device is to identify the 'secret sauce' of where a brand or company can provide consumers with unique benefit derived from location-based services."

BIA/Kelsey predicted last year that the mobile-advertising industry would be a $3.1 billion industry by 2013, an 81.2 percent increase from 2008's 160 million.

Since the iPhone is currently the most popular handheld in the U.S. today, estimated at four percent of the market in a December Nielsen study, Apple could have a considerable edge in ads targeting its users.

Patents Pending

Analysts and blogs have noted that Apple has applied for GPS-related patents for smartphone systems that would automatically display relevant apps based on the user's location and provide location data to people on both ends of a call to make it easier for them to meet.

Last month Apple (AAPL) bought the mobile ad group Quattro Wireless in a deal estimated at between $275 million and $300 million. The company's clients include Ford, Microsoft, Walt Disney, Visa and Netflix.

Tell Us What You Think
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Anonymous:
Posted: 2010-02-05 @ 7:22pm PT
WOLF!! WOLF!! WOLF!!

Apple did not ban location based ads. What they did was ban developers from using location data for strictly ad revenue purposes.

This means that a fart noise maker app can't ask to use my location information so that it can show location targeted ads when I'm choosing which fart sound to play... but an app that finds nearby restaurants or friends can.

You know what? I think most users would be happy with that.. I know I am.

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