If you intend to use integrated security then you should use/create a service account that has been granted access to login to the database.
Well, apparently integrated security as such work, since the account is apparently able to enter SQL Server. If not, the error message would have been different.
So it seems that this command should be enough:
CREATE USER [IIS APPPOOL\obmaster1.onlineob.co.za]
could do the trick.
Then again, as Joe suggests, you need to have an idea how security is to work in your application.