Monday, January 26, 2009

When Will Apple Create an AdSense Model for the iPhone?

Will advertising be ubiquitous across iPhone apps one day? Not in-your-face ads, but simple, unobtrusive ones that are highly relevant to what's currently on the screen. I'm describing the AdSense model as it would be applied to the iPhone and I believe it's a huge opportunity for Apple.

A good example is what The New York Times app does at the bottom of the screen. Right now it's featuring a "Find movie showtimes" banner, which isn't exactly relevant, but shows how the ads could be implemented. Imagine a model where the bottom 10% or so of the screen was always reserved by Apple to feature a context sensitive banner ad.

Annoying? Perhaps. But what if this led to new service plans? Today's model would be the most expensive because it doesn't feature this always-on advertising. A less expensive second option would display the ads in that bottom area of the screen. An even cheaper option would be one where you see the ads and you agree to let Apple capture your every move on the iPhone so they can sell the info to market research organizations. Yes, the privacy advocates hate this sort of thing but I've never understood why. Go ahead, watch what I do all day on my iPhone -- if it means I pay less for service each month, sell the data to anyone you can!

On a related note... I was on a flight recently with a fellow from AT&T. I mentioned this idea to him and he said this is something AT&T plans to aggressively pursue. I figured Apple would have first dibs on it, but I guess not. Think of all those ad impressions AT&T/Apple could capture on the iPhone. It's staggering. And besides, they need a model to somehow monetize all those great free apps, don't they?!

P.S. -- The AT&T guy also mentioned they're working on improvements to the 3G network, which should be implemented later this year. He said it's not clear whether existing phones will be able to take advantage of these improved speeds because it requires a firmware upgrade and Apple hasn't decided whether they'll push the upgrade out wirelessly or make you buy a new phone.

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