On Thursday, Apple published an “App Store Tip” for developers that it will reject apps which “use location-based information primarily to enable mobile advertisers to deliver targeted ads based on a user’s location.”  We have received dozens of questions from developers about what this means for applications and application business models.

It’s important to note the catalytic role Apple’s iPhone played in the mobile ecosystem. The integration of hardware, software, development environment, retail environment and commerce provided, at last, the platform for which users and developers had been waiting.  For the first time, app developers were able to create fun, innovative, useful experiences and get them in the hands of consumers.  User adoption fueled the app economy and the app economy in turn fueled user adoption.

From the beginning, Apple established tight control over their platform – every app sold in the iPhone App Store must have Apple approval – to ensure the development of stable development environment.  There are both pluses and minuses to this approach and they have been widely discussed.  The success of the App Store itself, however, is beyond dispute.

The explosive growth in iPhone adoption and usage has also driven a vibrant mobile advertising environment over the last two years.  A range of companies – AdMob included – enabled developers to offer free applications with media business models.  Apple has made it clear that they consider advertising on the iPhone, iPod Touch and iPad a company priority.

Thursday’s “App Store Tip” sparked speculation that Apple would use its tight control over the iPhone platform to include mobile advertising. Randall Rothenberg, President of the IAB, wrote last week about the risks around “controlled” or “closed” ecosystems and the challenges they present for the developer community. His post captures the concerns iPhone developers are feeling right now. To speak in generalities, advertising on any given media requires some form of openness and standardization to thrive.

We share the community’s concern that the removal of location-based information could inhibit the business model for developers of free applications.  We hope this is not indicative of a new approach by Apple and that many different companies will continue to have the ability to contribute to the rapid innovation in mobile advertising on the iPhone.

The iPhone represents an important segment of AdMob’s business and we are excited to continue our work with the developer community. We believe that the strong competition amongst mobile ad networks has directly benefited application developers thus far and the entire iPhone ecosystem will benefit from continued competition as mobile advertising enters its next phase.

Jason Spero

We are excited today to announce the launch of the open source versions of the AdWhirl iPhone SDK and AdWhirl Server.  Our primary goal with this launch is to maintain the ease-of-use to which AdWhirl users have become accustomed, while giving developers increased transparency and flexibility in meeting their mobile ad network mediation needs.  Developers actively using AdWhirl don’t need to do anything. We have designed this new open source version so they don’t have to make any changes.

The new open AdWhirl iPhone SDK allows developers to include only the code for ad networks that they actually use, an advantage for developers concerned with the size of their apps.  But we’ve also designed the open AdWhirl iPhone SDK to make it easy for developers to add new mobile ad networks that aren’t explicitly supported in the current version.  The open AdWhirl team will be actively encouraging developers to submit those additions as patches so that the entire community can benefit.  We are also actively encouraging mobile ad network participation in the future development of AdWhirl and hope to build an engaged and diverse community of committers to the project.  More details on exactly how we will be accepting patches and expanding the community of committers will be coming soon.

The AdWhirl Server, the piece of infrastructure that allows you to configure how ads are served in your app and that allows you to monitor the performance of advertising from all of the mobile networks that you’re using, has been redesigned from the ground up to be both open, and easy for developers to host.  The AdWhirl server runs on Amazon Web Services EC2 and employs SimpleDB for persistent data storage.  As part of today’s launch we’re providing both source code and EC2 disk images in order to make it as easy as possible for developers to run their own AdWhirl Server.  The new server design and the use of Amazon Web Services should also make it easy for folks running their own AdWhirl server to operate at significant scale.

As proof of this latter point, we’ll be transitioning the AdWhirl server located at adwhirl.com to Amazon Web Services and to the new open AdWhirl code base shortly.  We will continue to provide this as a free service to AdWhirl users who don’t need or want to operate their own AdWhirl server.  We’ll be communicating soon with developers on the specifics of this transition.  We are fully committed to minimizing any impact that this transition might have on AdWhirl users.

Both the iPhone SDK and Server source code and documentation are now available for download on Google code under the Apache Software Foundation license.  We would love to hear your feedback and questions at support@adwhirl.com or through our AdWhirl forum on Google Groups.

Kevin
Engineering

Since we announced last week that we can no longer support mediation layers such as AdWhirl or Tapjoy, we have been actively talking with application developers in our network. They asked for more time, so we extended the date for serving ad requests through these companies to August 5. But the most frequent ask was for AdMob to support the serving of house ads, so we promised to evaluate how we could do this and get back to everyone with more details within a few days.

Our product and engineering teams are still working out the details, but in early August we plan to give application developers the ability to reserve a percentage of their inventory to serve house ads that are created, hosted, and served via the AdMob platform. Publishers will be able to use these ads only to cross-promote their sites or applications and would earn no revenue from AdMob for the impressions or clicks on these ads. By supporting house ads we are helping to give app devs the flexibility they told us they want while still maximizing the monetization of their applications.

AdMob’s biggest priority is to deliver the best possible results for our developers and advertisers, as well as a great experience for end users. We believe that by helping to ensure users have a good experience with the ads they view, we are helping the mobile app ecosystem thrive and thereby maximizing long-term revenue opportunities for our publishers.

We believe that application developers can make more money by monetizing their applications with AdMob than with any other player in the market. We continue to work hard every day to maximize monetization, as evidenced by the new version of our SDK we recently released that includes richer media ad formats which will help increase eCPMs. We are working on several other projects on this front which you can expect to hear about in the coming months.

If you have questions about house ads or AdMob’s change in policy regarding mediation layers please contact us directly at appdevfeedback@admob.com.

Ali
VP of Product Management

In partnership with comScore, we regularly conduct survey research on our network to determine the audience composition of our partner sites and apps.  We use this information to create demographic bundles to deliver unparalleled targeting and performance for the campaigns our advertising partners run on AdMob’s network.

This original research also allows us to look more deeply at our large network and gain insights into the demographic characteristics of users of devices such as the iPhone and iPod touch.  We are excited to be the first to collect and share this comparative data.  When we started the research, we hypothesized that iPod touch users were younger on average than iPhone users and this hypothesis was supported by the results.

iPOD TOUCH USERS ARE YOUNGER THAN iPHONE USERS
•    69% of iPod touch users are between 13-24 years of age, while this same segment represents just 26% of iPhone users.
•    74% of iPhone users are over the age of 25, compared to 31% of iPod touch users.

iPHONE USERS HAVE HIGHER INCOME LEVELS & ARE MORE LIKELY TO HAVE KIDS; BOTH DEVICES SKEW MALE
•    In line with the older demographic composition of iPhone users, they also have higher incomes.  78% of iPhone users have an annual income of at least $25,000, compared to only 66% of iPhone touch users.
•    iPhone users are more likely to have children than iPod touch users, most probably due to the age difference in the two groups.  46% of iPhone users have children, compared to only 28% percent of iPod touch users.
•    More than 70% of users on both the iPhone and iPod touch are male.

MEDIA CONSUMPTION: PREFERENCE FOR THE MOBILE WEB OVER OTHER MEDIA
•    5 in 10 consumers on both iPhone and iPod touch devices use the mobile Web more frequently than they read printed newspapers.
•    More than 40% of users of both devices reported using the Internet on their mobile device more often than using the Web from their computers or listening to the radio.

What does this research mean for advertisers?  Advertisers looking to reach a younger demographic can take advantage of AdMob’s reach on the iPod touch and advertisers looking to reach a high net worth adult audience can reach this demographic in AdMob’s iPhone network.  It’s important to partner with a mobile advertising network that offers scale in both of these devices and can target them separately to improve relevance for users and performance for advertisers.

Johanna W.
Marketing

iPhone application developers take note, the new version of our iPhone software development kit (SDK) is now available and we encourage you to upgrade to it as soon as possible.

In this new version of our SDK we have added support for new social, search, and rich media ad units to answer demand from our advertisers. The new SDK, with the support for the new ad units, will help you better monetize your app in the coming months. We have also added features that will enable us to test and implement changes to our legacy ad units that will deliver a better user experience.

To download the new SDK, login to your AdMob account, visit “Sites & Apps,” and click on “Setup” to go to the Site Install Code page for your iPhone app.

For developers building applications using the iPhone 3.0 SDK, we have the official version of the AdMob SDK for use with the iPhone 3.0 SDK that can be found in the “extras” folder in the AdMob libraries. This library was built with the 3.0 GM SDK, and is thus suitable for submission to the App Store.

As always, don’t hesitate to contact support at support@admob.com if you have any questions and join our iPhone SDK for further updates at admob-iphone-sdk@googlegroups.com.

Mike F.
Marketing