It seems a no-brainer. Provide advertisers with in depth reporting offering visibility over what is working; allow them to control and optimise campaigns in real time; provide actionable insightful data and the proof that mobile is delivering results at an effective ROI, and they’ll channel more of their marketing budgets towards mobile. Likewise, allow publishers the capacity to deliver targeted traffic; enable visibility over ad slot performance; offer the ability to track their results in real time, and they’ll generate better results.
Whilst the above seems straightforward enough, we’re yet to see the same level of transparency and breadth of reporting metrics extend to become common practice within mobile advertising in the same way that it is with traditional online advertising.
Yet it is the way that the industry must move if we’re to truly tap into the potential of mobile as the fastest growing advertising channel. Transparency underpins everything we do here at Adfonic and it’s absolutely crucial in driving the mobile advertising industry forward. The real value to advertisers and publishers lies in the data that they are provided with in order to see what’s working and what’s not. Advertisers need real time visibility over campaign performance and data which drills right down into granular detail, per individual creative, in order to optimise as efficiently as possible. Similarly Publishers require the ability to track their earnings in real time with a level of transparency that offers visibility right down to the performance of individual ad slots, to understand exactly how much revenue each ad slot is generating for them.
This level of true transparency covering broad reporting metrics needs to extend through all corners of the mobile space in order to secure the evolution of mobile as a serious advertising channel, securing serious portions of digital spend.

As I’m writing this, Steve Jobs has just announced that henceforth the operating system formerly known as “iPhone OS” will be known by the much simpler and device agnostic name “iOS”.

Whatever you want to call it, Apple’s mobile devices have already left an impressive footprint in the United Kingdom, and this seemed like an appropriate time to share some insights into the UK audience reachable through Adfonic’s performance network.

Adfonic served ads in hundreds of apps available through the UK App Store in the month of May, and we’ve been crunching the numbers.  While apps don’t account for all of our iPhone (and iPod Touch… and iPad) traffic, they are a significant chunk, so these stats can be taken as a conservative lower bound estimate of total audience size for these key devices.

In May 2010, Adfonic reached more than 800,000 unique iPhone users, and over 500,000 unique iPod Touch owners.  We also have a rapidly growing audience of more than 100,000 Android device users.

To put this in perspective for advertisers, it’s useful to make a few educated guesses.  First, let’s use what we know about iPhone and iPod Touch user demographics, an area that has been the focus of research lately.  iPhone usage is concentrated in the 18-54 age range; we also know that iPod Touch skews younger than iPhone.  iPhone users tend to be more affluent, working professionals — ABC1 in marketing parlance.

With this in mind, there are some interesting comparisons to be made with traditional media:

– Publishing: Nielsen estimates the “Young Professionals” demographic at 14,000,000 in the UK.  If 45% of our UK Apple and Android users are aged 15 to 34 years old, this gives the Adfonic network a 4.4% penetration rate into this crucial segment.  An audience size of 630,000 is roughly equivalent to the readership base of Heat magazine.

– Outdoor: The London Underground has one of the most sophisticated display advertising systems in the world.  For a campaign that covers 100 advertising sites, you can expect to reach about 1.4M unique customers, the same as the UK population on Apple and Android apps reachable through Adfonic.

– TV: I wasn’t one of the fanatical followers that got up at 5 am to watch the Lost finale on Sky 1 last month, but I know plenty who did — and plenty more that recorded it to watch later.  In total, about 1.12M people viewed this episode, according to the Guardian.  In the UK, Adfonic app users outnumbered them by about 30%.

We’re also getting to know where our UK users are.  There’s a misconception that iPhone users are concentrated in London, and while there’s certainly a major London audience, check out this click distribution map from a recent iPhone app campaign on our network:

As you can see, the iPhone is an urban device - London, Birmingham, Manchester, Liverpool, Newcastle, Glasgow and Edinburgh are the top cities, and the general pattern of usage closely mirrors the population centres of the UK.

When analysing this campaign we also saw that clicks skewed to evening and weekend usage over WiFi in urban areas — in other words, people at home, in a relaxed mood, using casual apps or browsing the web from their mobile phone.

So it’s an exciting time to start looking at the mobile advertising channel as more than just devices and technology; it is rapidly emerging as an audience in its own right, and it is the iOS devices leading the charge in the UK.

2009 has been the year of the app store, with everyone from handset manufacturers (dare we call Apple that these days?) to OS makers (Android) to mobile operators (Vodafone) to independent players (GetJar)  making headlines with their different approaches to application discovery, installation and management.

It’s worth remembering that app stores aren’t particularly new:  most operators supported over-the-air Java downloads at least five years ago, and many did a quite healthy business along those lines, charging an average of 3 to 5 dollars (or pounds) for what were mostly games.  At the same time, non-operator portals like Handango were dishing out the apps for PDAs, starting with a tethered approach and later moving to OTA.  These approaches gradually converged as the mobile internet grew and operators’ carefully trimmed walled gardens were opened up, and then Apple came along and put the gloss on it, rightly stealing all the headlines.

So what’s actually new about the app store concept?  Yes, there’s now “an app for that”, as we’ve all been shown (and perhaps it took that level of mass media marketing to help things take off), but if you had the right smartphone or PDA and knew where to look, there was probably an app for that before, too, if perhaps a less shiny one.  Yes, today’s devices — like the iPhone — are much more suited to doing more with applications from both a technology point of view and a user experience one, but that alone doesn’t explain the massive growth of the app phenomenon.

Maybe what really makes an app store an app store is something that is truly new: the ability for developers to make money by participating in an open marketplace powered by advertising revenue.

While not all apps are free, it’s clear that free apps command the lion’s share of downloads on iPhones and are increasingly popular on other platforms such as Symbian and Java, as demonstrated by the resounding success of GetJar, which announced this summer that it had powered more than 500 million downloads.  Anywhere you look where ad-funded applications form a part of the equation, you see rapid growth.

“Free” as a price point has been the subject of a lot of discussion lately.  Wired’s Chris Anderson, author of a book by that title, argues that free represents a major mind shift in the way businesses are operating in today’s economy.  Whether or not you accept the macroeconomic theory, you’d have to agree he’s on to something when it comes to the mobile applications marketplace.  And that’s because “free” to the user doesn’t have to mean “free” to the developer or publisher of a mobile application.

As today’s most succesful online businesses know, “free” is a great way to build value.  For mobile apps, that value comes in the form of an audience and can be measured in unique users, impressions and click-through rate.  Advertising has democratized the application space in a way that no operator or technical working group came close to doing.  While it’s easy to complain about Apple’s notoriously opaque approval processes, let’s not lose sight of the fact that a couple years ago, most stores for apps (let’s just call them that) wouldn’t allow advertising within content at all.  If they did, it was likely that they would demand a revenue share of the advertising.  Apple doesn’t do that.  You can choose to sell your app for an initial purchase price — and Apple will take 30% — or you can give it away for free and keep 100% of the ad revenue.  It’s easy to see why “free” is so popular.

The advertising world is on the cusp of grasping this trend.  Maybe the point is not “there’s an app for that”, but “there’s an ad for that” — the app store environment is facilitating the most powerful audience-building platform the internet has yet seen, with hundreds of thousands of apps creating their own audiences, small and large, every day, replete with a marketer’s dream of targeting information.  On Adfonic, for instance, every app publisher is asked for a demographic profile of their audience, and relevant keyword tags to help match relevant offers from advertisers.  Apps that engender a trusted environment and can provide additional anonymous targeting information like age, gender and location command even more attention from savvy marketers.

So here’s a challenge: every time you hear someone say there’s an app for that, take the thought one step further and consider the audience-creating dynamic of that app.  Chances are you’ll find there’s an ad for that, too.