iPhone Monetizing New Web, Part 3: The Details

I’ve recently posted about businesses utilizing iPhone applications to help monetize new web and aside from giving you some advertising details below, I wanted to clarify my recommendations. In order to take advantage of all that an iPhone application offers and help monetize your business, I suggest when someone hits your site from a mobile browser on the iPhone, they are given a choice of downloading the app (and paying a one time fee/subscription) or going forward to your site. The app should have feature information/functions, available only on the app and the mobile site should be optimized for mobile function (task focused, screen real estate, etc).

And now for some advertising breakouts.

I received several emails about my post on monetizing the new web with iPhone applications. Some of the questions were:

• What are the various ways actually get paid for running ads on their site?
• Are we paid based on a CPM or CPC model?

These are essential questions and should be considered before moving forward with creating an iPhone application. There are currently different eight types of ads on the iPhone as provided by AdMob:

1. Canvas – When selected, this type of ad takes over the screen and highlights the product/service
2. In Application – This is the closet thing to behavioral advertising simply because someone took the time to download (and potentially paid for the app) and therefore see the app as a tool
3. App Store – Guess what this is
4. Web – This is a mobile ad on a web site
5. Audio – On selection this ad plays an audio message
6. iTunes – This is an ad within the iTunes store
7. Video – Again; guess what this is
8. Call – On selection this launches a phone call

As for the revenue split for applications and ads:

1. 70/30 for the sale of application: 70% goes to the developer with (you guessed it) 30% is going to Apple (There is currently the threat of a lawsuit that has been filed by developers that haven’t been getting paid in a timely manner so dont’ quit your day job just yet)
2. For CPM it is a 50/50 split in applications and “out of applications” between you and AdMob
3. For CPC it is a 60/40 split between the developer and AdMob
4. Currently CPM ads are going for $1.50 – $2.50 while CPCs are on a market system where bids start at $.05 (Pretty sure this is down just like the Internet, which is currently at $.30 down from $7.50)

I’m sure that over time, as Apple tracks which types of the eight ads are most effective, they will potentially change the ratios. Again, advertising and application revenues are only two of the four potential methods that will be available in the near future. With the release of OS 3.o you’ll also be able to charge subscription fees and enable ecommerce transactions.

Below is a video that highlights each type of ad.