As some of you know, my company has been actively building out iPhone apps to sell on the iTunes App Store. Some of our apps are big hits and some are not.

Wednesday, we decided to try out AdMob, one of the most popular ad networks for the iPhone. AdMob can place ads within other iPhone apps, to help promote a brand, product or so on. We ran a $100 test to see what type of conversion rate we can get.

We picked the "App Store" from the "adverting goal" screen. The App Store will basically enable you to link the ad directly to your product on the App Store page. So that made most sense for us. The other options allow for linking to a web page, phone number, video (YouTube, I believe), audio (QuickTime), iTunes link, Maps or Canvas (I assume a picture).

So we picked App Store.

Here is the ad creation tool for the App Store. You have a title, description, graphic and app store URL:

Here is a closer look at the ad that showed up in iPhones:

We made sure to include the price of the app, for obvious reasons.

We then targeted only US iPhone users, since the price of 99 cents was most likely only relevant there:

Then we set our bid to 50 cents per click, so we get a lot of traffic in a short period of time:

The results? Well, not so great.

The ad was live for about 30 minutes. It received 26,815 impressions, with 200 clicks resulting in an average CTR of 0.75% with an average CPC of $0.50.

On Thursday, I received the sales numbers for Wednesday's BlackBook sales. They were a disappointing 16 sales. We average about that or more per day for the BlackBook, without the ads. Since we sell the BlackBook for 99 cents, we only make 70 cents per sale. With 16 sales, we made $11.20. $11.20 minus the $100 in ads, turns out to an $88.80 loss on the campaign.

Now, there may be other factors why the campaign stunk. Maybe people in the US did not know what a Little Black Book meant? Maybe they didn't like some of the reviews, cause our competitor left some nasty reviews about our app - which is honestly way superior to our competitor's app. Or maybe AdMob is not a great avenue to advertiser iPhone apps? I am not sure.

I am sharing this because I received a number of Twitters from interested SEMs asking me how the campaign went. So here is your answer, not well!

Forum discussion at Search Engine Roundtable Forums.

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