My favorite iPhone app, surprisingly, is the New York Times app.
I know, I know.
It’s kinda boring and marks me as a fuddy-duddy.
Which I am.
But it is a great little app. It’s well organized, fast and very usable.  And it has some of the better iPhone app ads that I have seen.

These little ads slip up from the bottom of the article viewer and tend to be on the cleaner, less obnoxious side—low use of images, heavy on the branding, and unobnoxious colors.  IMHO, they do it right.  When you click on an ad, it keeps you in the app—it simply takes you to another page still contained within the app and its controls, so you can go back to what you were just reading.  What would be bad is if clicking on an ad opened a webpage; this would close the app down and launch a browser window.

As some of the more creative ad network players out there like AdMob and VideoEgg dabble with various models such as Cost Per Engagement (CPE) and begin to evolve their offerings, it makes me wonder how much the success of advertising on the iPhone depends on the evolution of the system and not just the networks.  The evolution of the iPhone and its app platform will certainly impact the effectiveness of these ads.  Click metrics and performance measurement capabilities of iPhone ads are certainly two vectors that will change as the system and platforms evolve, but also what an ad and its creatives can do and can be will change.

A new app SDK is coming out in a few weeks rumored to offer microtransaction capabilities in it, and the new iPhone and software release are due out sometime this summer, rumored to support background processing for apps.  This will change what the user can do with ads and likely bring the user app experience to a whole new level.  If a browser can be launched without shutting down the app (and, even better, if it can “pause” the app) that’s a whole new set of advertising opportunities.  If an ad can offer something that you want to buy right there, tempting you to burn a few of your digital dollars on an MP3 or video, or whatever—and if it can do so through a seamless microtransaction payment to your cell phone bill—that’s frictionless, fast and awesome.  Now my head is swirling with ideas like a QVC app, or an auction app that connects with in-app advertising, but alas, that’s crazy talk at this point.

Now if I could only get my iPhone to not drop calls, and deliver me voicemails within 6 hours of when people leave them, I would be a happy boy.

Long before social networks started becoming the new portal, the primary communication tools (email, chat) of portals struggled to monetize users. But, services like Hotmail, Yahoo Mail, Gmail offer a sticky service that keeps users coming back over and over again. $.25 CPMs for domestic traffic may be considered pretty good in these environments which is similar to what social networks earn today. The value in the communication service is the ability to offer high value editorial content to the huge audiences these services attract. Think of email as a funnel and the programming around it as a science to heard users into high value context like search, financial tools, shopping, and researching cars.

Social networks are largely communication platforms that are similar to email. My belief, the key to monetize the users and increase the value of the visitor is to create context around the actions beyond communicating (email). This is where advertisers will pay premium CPMs and where applications built on top of the social networks have huge opportunities to create experiences with valuable context.

The next thing social networks need to realize is that they have the opportunity to control the “start” experience of an internet visitor. This means becoming the homepage for every visitor. There are three hugely valuable things that happen when you become the starting point at scale. One is the ability to direct traffic at scale via editorial programming. This needs to be done at a personalized level, but will still offer scale in reach to advertisers. The second thing is the massive scale that advertisers get when they purchase ads like on the homepage of Yahoo or MSN. There aren’t many places this reach can be purchased and it’s expensive inventory that is sold out quickly. Lastly is search. As social networking sites get better at combining social search with general search this will lead in a shift from people heading to Google to people searching within the social networks. By making search a more prominent feature, this will lead to dramatic increases in monetization.

-From CEO, Paul Edmondson’s blog, trainthoughts.com

Paul Edmondson delivered a great presentation at the Web 2.0 Expo in San Francisco today. A copy of the presentation is available here.

One of our customers, Dablink – a Brazilian online photo editing site (http://www.dablink.com.br/) – has been running the YieldBuild Publishers Solution for several months now, and recently had this to say about their experience:

“I must confess that I was quite skeptical at first with YieldBuild’s ability to increase the eCPM of my inventory. I was already running a quite high eCPM, and didn’t believe there could be any margin for further improvement. But since it didn’t cost me anything to give YieldBuild a try, I signed-up for the beta, and I was amazed by the performance. After just a few days, the earnings and the eCPM soared to levels I’d never seen before. Even better, I noticed that some ad placements on the bottom of my pages that weren’t frequently viewed simply disappeared. Through its constant retesting process, YieldBuild calculated that these ads were not performing well and removed them, thus leaving my page with only the ads that I really need.

“It’s very pleasant to have the task of watching your inventory optimized automatically, knowing that you are getting the most out of it without cluttering your page with useless ads.”

Attention! Paul Edmondson, CEO of YieldBuild, will be speaking at the Web 2.0 Conference in San Francisco, Thursday, April 24, at 11 am: Maximizing Ad Revenue Through Format Optimization. Be sure to mark your calendars!

In just 4 months of using YieldBuild, Jewish Encyclopedia has doubled their click-through-rate and is now enjoying 233% of their initial earnings (and eCPM) with a constant number of daily impressions. This mid-sized specialized reference site first started using YieldBuild at the end of October and continues to see improvements from YieldBuild.

Best of all, all of these substantial improvements have happened without the fuss of constant testing and tweaking. Snippets of code were installed in zones the site owner chose, and that’s it! YieldBuild has automatically taken care of all the color, format and position selection and testing, and it will continue to do so indefinitely to optimize the site’s earnings.

So, we’re in a Beta period right now with a great group of customers. One of our long-time customers, Elliott Back, recently wrote a great post about us -check it out here. In short, he has seen CPMs on his blog network increase by 21%.

My favorite excerpt, “If you discount revenue from other blogs, this one went from 1.51 CPM to 2.51 CPM, an increase of 66% just due to using Yieldbuild. …I don’t have time to bang out optimized advertising solutions…why not let Yieldbuild do it for you?”

I’ll let you read the rest of the case study on his cool site…