In five days, Apple will likely loose a new iPhone operating system  on the world, and with it, new expectations of what a phone can do. Less glamorously--but no less importantly--it will usher in a new phase of innovation for mobile advertisers, who make the free apps we know and love a worthwhile pursuit for developers.
In anticipation of iPhone OS 3.0, mobile ad provider AdMob  has been hard at work figuring out three things: 1) how its ad units can take advantage of all this social networking hubub; 2) how to incorporate search into ads; and 3) how to do it all with interactive ads that don't subtract too much from our productivity. "The next few months is about helping our app developers integrate and be ready for the next OS," says Jason Spero, AdMob's VP and GM of North American operations.
AdMob has plenty of motivation to get iPhone ads right--the Apple device makes up over 40% of their ad views, way more than BlackBerry, Android or Windows. AdMob ads appear on 1,500 of the 40,000 apps in the Apple store, and on 35 of the top 100 apps. Now its advertisers, which include Land Rover, Comedy Central, Toshiba and Adidas, are asking how they can do more with their ads without ticking people off.
"What we're trying to do with rich media is condense the value prop so you don't have to leave the page," says Spero. In the next generation of iPhone ads, you'll be able to tap a banner and watch as the app you're in flips over to give you a full-page interactive ad. There, you'll be able to follow brands on Twitter, become a Facebook fan, or do a Web search with an advertised engine. Once you're done, the page flips back. "Then you can go back to what you were doing," says Spero.
That's cool, but what about iPhone OS 4.0, 5.0, and beyond? "You'll see development in two directions," says Spero. The first, he says, is the smartphone ad as a conduit for buying things. If your phone can keep on your credit card info on file and your shipping address, advertisers can offer Apple-like "one-click" ordering, as users enjoy in the iPhone's iTunes and App Store applications. "There will be an explosion in commerce," Spero says.
The second direction is what Spero calls "relevance." "You won't see any more repurposed PC content on the iPhone," he predicts. Instead, ads will be context-specific and user-specific; they'll know where you are and what time of day it is, and they'll serve you ads accordingly. And you thought that all the next iPhones had to offer were a compass and video camera .
Check back with FastCompany.com for daily updates on the ins and outs of the new iPhone operating system, which is due to be unveiled next week.
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