Apple may be making millions in its app store, but advertising on the iPhone is only as good as the application that it's on.
According to AdMob, over half of the free apps on the iPhone aren't really making any money at all.
The ad network serves ads to over 2,300 free apps, but their new study shows that 54% of those apps had fewer than 1,000 users in May.
Silicon Alley Insider estimates that the earnings from those apps is "probably not not enough to buy a sandwich":
"For every 1,000 times an ad loads on your app, you'd get $1-$2 after sharing revenue with the ad network. Assuming a 1,000-active-user app actually gets 1,000 people to look at, say, 10 ads per month, that's a mere $10-$20 in revenue. Assuming 500 users and 5 ads a month... you get the idea."
Popular apps on the iPhone, of course, are doing just fine. The top 5% of apps on the iPhone had more than 100,000 users. The biggest had more than 2 million, and about 11 apps had more than 1 million users.
Admob allows all free apps to serve advertising, regardless of their sucess rate with users. But now Google is getting into the market and the search giant may make a bid to capture the top app performers on the iPhone.
Yesterday, Google announced that it was opening its AdSense for Mobile for the iPhone and Android. Google's service will compete with AdMob and gets around the monetization barrier by requiring app developers achieve a certain level of popularity before signing on:
"To participate, developers must have an app that's ready to implement, is free, already gets a minimum of 100,000 page views daily and runs on either Android or iPhone."