This is not a sarcastic question: who pays for advertising in iPhone apps? (I've never held an iPhone long enough to see an ad, and I'm drawing blanks as to who would pay $2 CPMs for mobile traffic.)
It is a pretty diverse group. In 3 page refreshes on my mobile site, Google has delivered a online radio ad, a mobile virus scanning ad, and a Gastric ByPass Attorney Ad.
And, the CPM rates are huge, and people actually do click these ads (based on my revenue numbers)
Advertising is bought because it works. Advertising in nice places costs more. iOS users are a much, much more attractive demographic than the general public who see/click ads.
A reasonably high-end display advertiser will pay a relatively high CPM to have their brand associated with an object like an iPhone with a high perceived value, even if no one ever clicks, and especially if theirs is the only ad on the screen at a time.
With the insanely fine-grained targeting information that Apple has about you and your device ---such as your name, age, country and home billing zipcode, how much you use your iPhone, your purchase history with Apple, whatever other information you've ever given Apple like income and occupation, your current location (in principle), what apps you like, what music you like, etc.---they can probably pick the right ad for each user well enough get really, really good average click through rates. You'd be amazed at how well you can crank up the average click likelihood even with way coarser targeting information.
Has anyone done any studies on the number of people who click on mobile ads by mistake?
Based on my experience and observation of others it seems to occur fairly regularly.
(Also, I know my 4yo clicks on in-game ads by mistake all the time on my iPod, and I know I'm not the only parent who has discovered the miracle of iPhone/iPod gaming for kids.)
I wouldn't doubt that the majority of in-app ad clicks are kids. Sometimes I just let my 3-yr-old play with my phone, and he thinks the farting app is pretty funny, but he ALWAYS touches the ads.
If you are a mortgage broker or a car dealer then 1000 clicks is easily worth $2000. Even if only a tiny fraction of them leads to a sale, each sale is worth thousands of dollars.
If you are Prada or Lexus and you need people to associate your brand with high-value objects like iPhones, then even high CPM's are a good investment; especially because high CPM's price out the rabble, so your fancy brand won't appear next to an ad for psychics or penis enlargers.
Well, I don't know about sustain that cost but look at the ad they demoed for Nissan's new electric car at WWDC; video, some interactivity, and oh yeah, iPhone owners get priority on the waiting list for it.
I'm afraid that, for a significant number of developers, the takeaway will be: "see, the app quality doesn't matter, it's a matter of luck! So I'd better crank out a lot of apps to have a better chance to win big".
Definitely. That's what I would do if I was doing apps. Crank out as many low quality novelty apps as you can. Make one a day for a year.
That's giving people what they want. For many, the whole point of an app-store is to find fun novelty apps like light-sabers fun noise things, etc etc. It's just a way of personalizing your phone like ringtones used to be. Something 'cool'/'lame' you can show your friends.
Yeah, I'm sure there would be developers out there who put a month into a solid iphone app that wasn't just a gimmick and didn't see any results. Might be a different equation for paid apps but for free ones I think your money would be better spent developing small apps like this.
On your comment about ad-revenues, you may also want to consider the fact the $20,000 comes from ads and in-app purchases. The TC post doesn't provide a breakup and the revenue split isn't clear
