Today, Apple changed the advertising world. In an update about the new iPhone software, Steve Jobs introduced iAd.

The best way to describe iAd is to think about Google Adwords and changing it to work within iPhone applications – the entire system is run by Apple with the proceeds going to Apple (40%) and application developers (60%).

Of course, for developers, this is big news, but for advertisers and media buying services agencies, this is huge – a real game-changer. Assuming that Apple allows it, we will be able to target customers based on location and preferences. For example, if you are a store in a mall, you have the potential to be able to advertise your store once someone sets foot in the mall (to be fair, we don’t know yet if iAd will have those capabilities). In short, this turns the whole idea of mobile advertising on its ear.

If you’ve been reading the news, it’s obvious that Apple and Google have started to clash. This can’t do much for that relationship. What it will do is create another advertising outlet that allows us targeting that has only been available on the Web.

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