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iPhone as advertising platform

August 12, 2008 2:11am
by Richard Waters

pandora.jpgIt 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.

August 12, 2008 2:11am in Internet, Mobile | Comment

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