Can You Considered This Alternative Business Model?

Matthew Campbell, June 18th

7518C897-1575-48CD-B95B-34E86617850A.jpgThe typical business plan for iPhone apps entails creating an app and then either selling it for a micro-transaction (99 cent price point) or using the app as an ad platform for a commodity ad service like AdMob.

With 50,000+ apps out on the app store right now it may be time to consider alternative business models. Last week the people who make Audiobooks contacted me to see if I would like to test out their advertising service.

I did of course agree to check out their ad service, but after I read through their materials I became intrigued about their business model. They have a very successful free app (#1 on the free list under books). All free apps get tons of downloads and their app has been downloaded 200,000 times as of today.

They make their money by selling space directly to advertisers on their app. You can have your app displayed (or I assume anything else) for something like $199 per month. First of all – that is dirt cheap for advertising. I have spend more than that each day on Google ads for this website at the very beginning.

[Check out their website if you are interested in the details: here];

Audiobooks sells 25 ad slots per month – that equals out to about $5,000 and there is no Apple tax. Can you get that from AdMob? When I had a free app out it made $25/month on AdMob… There is a chance that you app will earn $5,000 a month through sales alone, but that would be on the high end of middle-tier apps.

I think that they are on to something – another variation that is interesting is the same idea as what these guys are doing but for niche markets. I believe that the biggest problem for iPhone advertising is that your audience is not targeted. So, people seeing typical ads on an iPhone app are random. When you advertise through Google you can choose what audience sees your ads.

When I think of my Tasting Notes app I wonder how it would have gone if I made it a free app and then charged wine, beer and cigar niche people to advertise on it? It is interesting to consider the alternative.

Can you think of one non-typical business model for your iPhone app? Please comment!