Advertisers tap iPhone

With iPhone App Store sales reaching $1 million per day in its first month, Apple CEO Steve Jobs believes the market for iPhone applications could eventually reach $1 billion. This presents an opportunity not only for app developers, but also for advertisers looking for ways to get on board.

Mobile ad pioneer AdMob is one vendor that has had advertisements on the iPhone since the launch of the original version. According to Jason Spero, vice president of marketing for AdMob, the vendor currently is charging advertisers around 30 to 35 cents per click — about $25 to $30 cost per thousand impressions. He's not convinced that a $1 billion-a-year opportunity is realistic for advertisers in the next year or so, but it won't seem as farfetched as the desirable iPhone user base continues to expand.

“As you see uptake of the device, you'll see the size of the buys grow,” Spero said. “Where an average buy right now might be $25,000 to $50,000, you'll see an advertiser very willing to spend multiples of that to reach this audience. That's what's really cool — as this device becomes more mass market, the advertisers have shown an uncapped willingness to spend to reach this audience.”

Right now, the iPhone's reach may not be extensive enough, but the opportunity for engagement is a trend many handset-makers are working to replicate. Spero thinks the iPhone is just a proof point for mobile advertising. It has served as an example of where the industry is going to be in a few years — and where the iPhone and its successors go, the advertisers are sure to follow.

“You'll see devices that take advantage of large screens, fast networks and location information,” Spero said, “and I think that is a highly, highly interesting audience to an advertiser.”