Stephanie Clifford
Media brands are jumping onto the iPhone. USA Today? There?s an app for that. ?The Rachel Maddow Show?? ?Entertainment Tonight?? Public radio? Yes, yes and yes, there are apps for those.
Now, if only there were an app that showed media companies how to make money on the iPhone. ?The iPhone has really been a phenomenon, so I think most media brands, at least the national ones, are thinking it?s a place they have to be,? said Matt Jones, vice-president for mobile strategy and operations at Gannett Digital-USA Today.
Yet, as with the web, it is far from clear how much revenue media apps for the iPhone can produce. ?We?re all trying to figure out as we go: Is there a subscription model here, is it an advertising model, is there a monthly recurring revenue stream, is it a one-time payment model?? Jones said. ?It?s a very fluid model.?Application developers can make money either by setting a price for their applications or showing advertising on them. Media companies have chosen mostly to offer their apps free.
Jason Spero, vice-president and managing director for North America at AdMob, which serves ads on applications and whose clients include CBS, said the big brands his company dealt with were 30 to 50%sold out on their inventory for banner advertising, with some selling as much as 80 percent at their peak.
?Most of these apps run considerably below 100% full, but they?ve got significant CPMs they?ve been able to charge,? he said, using the industry term for cost-per-thousand ads. ?There?s a very real business model for these companies on the iPhone.?
But the advertising pool is small. Magna, a unit of the Interpublic Group, reported in May that it expected advertisers to spend $229 million this year on mobile media, including mobile web sites and applications. Though that is up 36%from 2008, it is revised down from Magna?s forecast in the summer of 2008 of a growth rate of 43%. And $229 million is a tiny slice of the advertising pie.