Ads in applications have come a long way in the past decade. They have evolved from bland, static pictures of products that someone would probably find in a thrift store today, to interactive games, videos and more. It is fair to say that time and technology have changed a few things.

In SD Times’ debut issue from February 2000, Doug Root, then the director of sales and marketing for Premia, a software tools supplier, said, “Ad-based software will be somewhat successful, but it might be compromising valuable user space to accommodate banners and advertising.”

However, with changes in technology over the past 10 years, Root’s opinions have changed somewhat as well.

Gartner analyst Andrew Frank agreed with Root’s opinion in 2000 and pointed out that before widgets, which helped create branded content, apps were more utilitarian and advertising wasn’t seen as appropriate. But with things like Facebook and other social media platforms, ads in apps really took off, he said.

“Technology has also advanced to the point that consumers can make choices,” said Root, now the president of EnVision Outdoor Living. Rather than dealing with a static ad or pop-up ad as frequently as people had to 10 years ago, technology has now evolved enough that consumers can opt for different, non-ad versions of programs, or choose to ignore ads more easily because consumers are given options to view or opt out, Root explained.

Ads have also become so interactive and integrated into apps that it’s hard sometimes to even tell the difference between the two, Frank said. And of Apple’s new iAds platform coming into play: “I think [iAds] is certainly starting to blur the lines between the concept of an app as an ad and an app as a media spot where an ad can occur. Now we see both things coming together,” he said.  

Apple’s newest platform will now move complex, interactive ads into mobile applications for the iPhone, iPod Touch and iPad. This move can also prove lucrative for developers, who will receive 60% of the ad revenue run on their programs.

At the iPhone 4.0 launch, where the iAds platform was announced, Apple’s CEO Steve Jobs estimated there will soon be around 100 million Apple devices on the market and that most people’s mobile activity will be dominated by spending about 30 minutes a day using applications. If 10 ads were to appear on each device per day, it would make for about 1 billion ad impressions daily, according to Jobs.

“I think [iAds] can be very viable. It just has to be done right so it’s not an intrusive, interrupting experience for the consumers,” as was the experience 10 years ago, Root said.

Matthew Weinberger, an associate contributing blogger for value-added reseller The VAR Guy and an app consumer, said, “If it helps keep a useful app free or at least cheaper, then more power to them.” He added that in order “to stay competitive in the app store, you have to price your stuff low, and the developers have to make money somehow.”

Gary Chattem, another app consumer, has a different opinion. “I’m willing to spend US$1.99 for an ad-free version to not be distracted,” he said. However, he does use some apps with ads, but if he clicks on an ad enough times, he won’t use the app anymore. He has also learned that “after awhile, you know what ads are tolerable after using the apps.”

Deborah Schultz, partner at digital strategy consultancy firm Altimeter, agreed that ads have their time and place, but has also seen a change in consumers’ expectations about what an ad should offer. “The ‘telling and selling’ model doesn’t work anymore,” she said, “and ads need to be contextually meaningful to [consumers].”

Modern technology has enabled apps and ads to now be contextually meaningful to consumers, but it also raises the bar for developers to create something more interesting every time. But if done right, Root said, “The future of advertising in apps is very promising and can be a real win for consumers, advertisers and developers.”