With 150 million iTunes users under their belt, the kids at Cupertino are checking out the kinds of things you’re downloading to develop “more appealing” iAds. Businessweek reports that by examining customer’s entertainment and software downloads, Apple can hone their ads to target an industry that’s estimated to be worth $1.56 billion by 2013. It’s make or break time.

This year alone, $593 million dollars is expected to be spent in the mobile marketing realm. iAds alone will be integrated into roughly 225,000 applications, and users have downloaded 5 billion iAds thus far. When iOS 4 reaches the iPad later in the year, Apple will be providing iAds to over 3 million customers who bought an iPad within the first 80 days of sale.

“Apple knows what you’ve downloaded, how much time you spend interacting with applications and knows even what you’ve downloaded, don’t like and deleted,” says Rachel Pasqua of mobile marketing firm ICrossing.

Now of course this is quite obvious, but if you’re curious in just what marketers look for when they analyze your data, Unilever’s Rob Candelino provides some insight in the process. For his Dove Soap campaign, Candelino is specifically interested in men in their late thirties with children. “Apple then overlays that with the iTunes information and targets quite well and quite surgically, [but] Apple doesn’t share information on individuals.”

The issue facing Apple is whether they can be as successful as Google – Google advertises to a wider market through a wider range of products. Apple displays iAds only on devices on iOS 4 through Apples App Store.

Apple appeals to a “premium” audience because of the cost of its products, while Google can reach a broader market because its Android operating system is on more devices.

But I don’t see how a $200 Apple iPhone is any more ‘premium’ than a $200 Droid X, and while Google might be advertising on more devices, their Android Marketplace isn’t nearly as large as Apple’s App Store. So does having more apps give you greater view-ability with iAds, or does more devices? Keep in mind too that Apple isn’t just limited to the smartphone market place either - iAds will appear on the iPod touch and the iPad as well.

I do think the issue is going to come down to trust. Would you rather click a Google ad or an iAd? With Google, I might see an ad I like, but it’s not transparent enough for me. I suppose I grew up with the mentality that I shouldn’t click Google ads – they all seem terribly shady. ‘Don’t click! Don’t click!’ Not once have I been interested in one on my Motorola Droid; there’s nothing enticing about a blue G and a black banner that makes me want to tap it.

But on Apple’s platform, I put a lot more trust in the various ads that are displayed to me. Constantly I was impressed with what networks like Fusion were showing me that were (almost always) relevant to my interests in apps like Twitterrific, and iAds do a pretty good job of keeping me entertained. They’re enticing. I have trust in the companies who show me the ads because I’m familiar with who they are – Apple themselves have come out and said that they’re pretty strict on what kinds of ads that are shown, and right now they’re working with only big names. I feel a lot safer interacting with an iAd than a Google ad.

When it comes down to competition, iAds might arrive in limited availability due to the ‘restriction’ of iOS 4, yet Google is going to have strong competition. Something that’s completely focused versus Google’s rather open market might be prove to be more successful than analysts predict. Apple’s model works for customers like me. Let us know what you think about iAds in the comments below - but keep it civil on both sides if you will.

[via Businessweek]