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iPhone as advertising platform
August 12, 2008
It seems a safe bet that most of the money made by iPhone application developers will come in the form of advertising. That is the overwhelming lesson from the PC-based internet.
So if Steve Jobs is right in saying that the marketplace for paid-for iPhone applications will eventually reach $1bn, how much bigger might the advertising market be? (Jobs’ prediction, in an interview with the Wall Street Journal, is based on the $1m-a-day in sales the the new App Store has notched up in its first month, and why not? These are still very early days.)
I caught up on Monday with Tim Westergren, founder of Pandora, the internet radio service that has been the most downloaded non-game application on the iPhone. Pandora will very soon be on 1m iPhones: the application was on half a million devices two weeks after the App Store launched, and since then downloads have remained close to the rate of 40,000 a day. Westergren says this has created a sizeable mobile audience to sell to advertisers far faster than he’d expected. But how best to do it?
Like a lot of internet companies, Pandora will have to reinvent itself for this new platform. At the moment it makes all its money from eyeballs (it sells display advertising, relying on the page hits generated by PC users.) The future, though, will be all about ears.
As Westergren says, radio is a natural for mobile devices. But he also concedes that listeners will probably not tolerate the advertising breaks that pay the bills of traditional broadcast radio stations. His suggestion: short, 10-second “messages” from sponsors.
Will this new mobile audience turn out to be more or less valuable than the old PC audience? The Pandora founder says he has no idea: “The benefit of the computer is, you have a much bigger screen. The benefit of the iPhone is, you know where your listeners are.” The science of mobile advertising needs to develop fast if the early promise of the iPhone is not to be squandered.
There is a lot of talk about mobile internet advertising, but these mobile streaming radio services are really the killer advertising app. Being able to target a listener with a combination of registration info and geolocation will enable the service provider to be able to afford this relatively expensive service and continue to provide it to the end user for free. The ads are short, but due to the hypertargeted nature, very effective. And measurable. Advertisers will pay a premium for this, so services like Pandora won’t need to significantly deminish the listener experience. And the listener gets a great music service for free. This is the future of radio.
Posted by: Doug Perlson | August 12th, 2008 at 11:11 pm | Report this commentFor mobile marketing to be developed a lot of things need to be changed. Here in France text messages are still an unused resource, wether this remains the mobile operators lack of desire to use this medium or a lack of knowledge from French marketing managers needs to be seen. The potential is there, a personalised service that is almost guaranteed to be read is a marketers dream. All we need to do now is use it imaginatively. And the success of the iphone 3G will open many doors.
Posted by: Alan MABBETT Smart Talk France | August 13th, 2008 at 10:13 am | Report this commentwow $1million/day in application sales, that’s insane. Well I guess it’s whatever the market will bare, people are willing to pay for the phone, I would assume they have enough for the applications to go along with it.
Posted by: Jeff, The Online Billboard | August 13th, 2008 at 6:09 pm | Report this commentI think NPR type of advertising is a good model for all. Small bi hourly clips are not intrusive. I’ve never seen anyone either way get completely upset and throw a radio out a window cause it was 10 or 3 minutes of advertising. That is why it’s nice to have options. Though preferably not with all owned by Clear Channel.
Text message advertising should not happen. If there are advertisers reading…text messaging is personal. An update from a parent to child, flirting with the opposite sex or if you’ve seen the news lately a cry for help from Egypt. A text message is exciting to get. This is one area that unless you’re dumb enough to subscribe to such, advertisers should ignore.
Posted by: Josh | August 14th, 2008 at 5:30 am | Report this commentI think a 10 second advertisment is a little too much for a mobile application, from the point of view of the user. I mean, if unsolicited calls and messages get our blood boiling, something like this may not click. Worth a shot though.
Posted by: SEO Company Pune | August 14th, 2008 at 7:31 am | Report this commentOne of the great innovations of the IPhone 3G is that you actually do not need to develop a separate form of mobile advertising: 3G and a magnifying browser technology take you as close to a PC internet experience as you can get.
Sure there will be bespoke Iphone applications here and there - but we should not forget that the biggest drivers of advertising adoption and spend are not fancy targeting options; it’s standardization. Boring but true. Iphone app developers should keep that in mind when innovating around advertising.
Posted by: Michael Stephanblome | August 29th, 2008 at 11:25 am | Report this comment