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What Did Apple Really Say About Location-based Ads?

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Apple (s aapl) a couple of weeks back released a “tip” for developers on how to enhance its apps using its “Core Location” framework, which it touted as being able to imbue apps with location-based info on the weather, nearby restaurants and more. But while some said it signaled the death of the location-based ad industry on the iPhone, that seems more than a little premature.

The concern centered around the following statement: “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.” There have also been reports that applications may be required to ask for user permission to integrate location-based advertising, although I haven’t seen a direct reference from Apple to that effect.

It’s worth noting that the Core Location API features (which I imagine are based on technology being developed by Placebase, which Apple bought last summer) touted in Apple’s tip don’t seem to have been released yet, and that the last material change to location features seem came back in May 2009, in conjunction with an iPhone OS update.

3 Interpretations

But what should we take the developer tip to mean? I see a few possible interpretations:

User Protection — Maybe Apple is merely trying to help users by stopping massive LBS ad spam and potential problems with location-based tracking issues. After all, the company has so far done a good job of balancing user control of location info with a developer-friendly wrapper. Currently, when an app that wants your location tries to access it, the user needs to give permission by way of a pop-up dialog box. After a few times, the pop-ups stop and the app gets continued access to location data. So perhaps Apple wants to keep its users’ best interests at heart.

Commercial — The idea here is that location-based advertising on the iPhone isn’t dead, rather it’s going to become a walled garden or a short-fenced one, with, presumably, Apple/Quattro taking a significant cut of the revenues. While every ad network takes some portion of sales, Apple would not have the normal competitive pressures in setting this revenue share percentage. Possibly you could use other ad systems, but would then have to pay for access to Apple’s core location APIs.

Such an approach could benefit developers as well, as it would immediately create critical mass for location-based advertising on the iPhone (which barely exists today). Apple might even allow new ad networks to participate in campaigns, as long as users receive some location benefit. Alternately, it could disallow all other ad networks –- which would not sit well with Google (s goog), Microsoft (s msft) or anyone else trying to get broad advertising reach across mobile customers.

Irrational — I’ve seen numerous examples of this interpretation, with headlines including:

Location-Based Advertising Dead on the iPhone? — Technorati

Apple tells devs that location-based advertising is a no-no -– Ars technica

Apple Bans Location-based iPhone Ads -– InformationWeek

Apple vows to reject location apps geared for mobile advertising –- Fierce Mobile Content

But let’s face it: Apple is about as likely to kill location-based advertising on the iPhone as Microsoft is to start giving Windows away for free.

Some Conclusions Can Be Drawn, But Questions Remain

As its acquisition of Quattro at the start of year (and its interest in AdMob, before it was snapped up by Google) made clear, Apple is serious about mobile advertising. It’s also serious about its users. And it recognizes the impact location-based activities (in a variety of types) are going to have on mobile services, sooner than later.

Some questions remain, however, the most important of which is: Would a walled garden ad network on the iPhone be in Apple’s best interest? On one hand, it could serve to alienate a variety of people in the industry. But it would undoubtedly bring a huge boost in business to Quattro and give Apple enough critical mass to come out with industry-changing location-based ad products and a thriving network.

What did you think was implied by Apple’s Core Location tip to developers? Leave your thoughts in the comments.

Rahul Sonnad is the founder of Geodelic Systems.

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10 Responses to “What Did Apple Really Say About Location-based Ads?”

  1. I am constantly becoming more aware of this space in the mobile market and as it seems to me, this is where apps will make most of their $. I do not necessarily agree with Apple’s move to regulate this. But in most cases they will opt to control whatever they can. Seeing that there is great profit in ad placement through location based applications, Apple can once again have the upper hand in their developement of these applications including advertisement, when they make the rules.

  2. I have a feeling Apple isn’t just trying to protect it’s users, but probably trying to regulate the ad space to their benefit. Creating their own LBS with an attractive, yet semi useful and ultimately cohesive design with the iPhone, iTouch, iPad, etc, would no doubt in my mind have ad placement. Certainly particular about such ads, but probably not with the consumer’s best interest in mind.

  3. Fred Smyth

    Nina, while you may parse it that way, it doesn’t really make sense. For example, if you have horrible annoying ads but the main purpose of your app is to use location for something moderately useful then it’s OK? But if you have have a great beneficial location based ad experience, but your app is not about location then it’s prohibited? My guess is that this just isn’t a fully thought out policy.

  4. Nina Tovish

    I really don’t see why this is so hard to parse. Apple is saying that if your MAIN reason for using location is to serve up ads, that’s no good. You have to be putting the location info to some other, real and practical purpose beneficial to the user as well.

    This seems eminently sensible and like good user-centered design.

  5. Your commenters were right Marshall :-)
    The last thing I want bombarding me is ads even if they’re giving me coupons – I want control. Hopefully the answer is User Protection.

    • Of course nobody wants meaningless ads. The question is who decides this, Apple or the customer. Obviously, Google Maps with ads wouldn’t apply, right? Or, do you not know?

      That is the problem. We all agree that Apple has a great user experience. I just happen to not believe that having music embedded in apps for purchase violates that app experience. I believe that a snowboarding video sampler where you can purchase music and videos directly would be kinda cool. And, I believe that targeting ads at users who desire this is relevant. The last one is the only one in question because we tried the others and Apple doesn’t want products that compete with iTunes in spite of publishers who want such mechanisms.

  6. When I covered this there were a lot of commenters who applauded the move, saying that Apple ought not allow developers to pester users for location if that location is going to be used for nothing but local ads. I disagree. I still believe that any app that is ad-supported will be more effective if the advertising is local and I’m happy to aprove one prompt in exchange for seeing out of the corner of my eye what local businesses are advertising on my iPhone. (Perhaps in part because it’s still novel here in Portland, Oregon.) I believe Apple made this move to protect the user experience, but I think it was a mistake. I’d sure love to get some follow-up comment from Apple on it, though. They didn’t respond to my email seeking clarification. Why are so many press outlets still left speculating what the intention was?

  7. Excuse me, but why are we left interpreting this? Apple is going to leave the vagaries in place so that developers have to spend money on development but are ultimately unsure as to what the results will be. That is my primary problem with the platform relative to the discussions of openness.

    I had a discussion with somebody from Moto where we trying to figure out if they would even allow some of my ideas for educational projects to be built for the iPad OS. Isn’t that a problem?