Apple Opens iPhone App Bazaar and Brands Set up Tables

Apple has unveiled its marketplace for iPhone applications, where device owners can install more than 652 free and paid applications ranging from games to social utilities to branded media apps. A quick scan of the first wave of new apps shows ads are already part of the platform. And while it’s too early to draw conclusions, developers and agencies appear optimistic about the prospects for brand involvement.

A few developers have made their apps available to users free and ad supported. For instance, Greensboro, N.C.-based Iconfactory has released two versions of Twitterrific, its popular Twitter client for Macs. One version, costing $9.99, is ad-free and comes with an extra feature. The other is free and ad-supported, serving once-an-hour ads courtesy of vertical ad network The Deck, which focuses on sites about Web and design culture.

The AppStore first became available within iTunes late Wednesday evening, and as of 4:30 yesterday 7,000 people had installed the ad-supported version.

“From the comments we’ve seen today so far, people are very pleased they have a choice [between paid and ad-supported],” said Gedeon Maheux, principal at Iconfactory.

Another app, Exposure, is a Flickr utility that likewise comes in two versions — one of them ad-supported.

While the handful of ad-enabled apps represent only a meager portion of the total, their availability in iTunes sends a message that Apple is supportive of advertising.

Greg Yardley is co-founder of Pinch Media, which offers tools to developers using Apple’s iPhone software developer kit. He noted Apple had not clearly indicated before the launch whether it would smile or frown on marketing messages within iPhone application environments.

“This is a very prominent, free iPhone app Apple is actually featuring. That’s a sign Apple’s not going to block you,” he said. “This resolves a lot of uncertainty.”

But he added he wouldn’t advise developers to embrace ads until user metrics start flowing in; for now, he said it might make more sense for developers to sell apps for $9.99 a pop than try and earn a $10 or a $20 CPM on limited inventory.

“The economics still might not be there,” he said.

Yardley added, “The challenge for marketers is to come up with a way to work with developers that respects them, respects the audience and takes advantage of this very rich platform.”

The early opportunity for marketers may not lie in a traditional media buying, but in working with developers to broker sponsorships and create branded apps. Among the first flock of branded apps is an Etch A Sketch doodling app, created in partnership between Freeze Tag and the game’s original developer, The Ohio Art Company, for $4.99; a free business and events look-up utility from YellowPages; and media centric apps from the likes of BravoTV and the New York Times.

Michael Collins, CEO of WPP’s Kinetic Mobile, called the engagement opportunity “compelling.”

“The tough part is trying to make the argument that it’s worth the time and money knowing you’re going to reach such a small audience,” he said. “Therein lies the challenge.”

Additionally, he noted it’s not clear how marketers can promote their apps, given the apparent lack of mechanism for deep-linking into the AppStore. Even so, he said Kinetic is in iPhone app discussions with two clients.

“We have not officially made a recommendation yet,” he said. “We are monitoring it very closely.”

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