Developers insert a small snippet of code into their application. This allows the phones to display the ads. This code plugs the application into Google's network of partners and publishers. The code gives developers control of where the ad appears on the screen. The ad targeting is contextual, similar to targeting that exists for AdSense partners.
"We are also experimenting with ways to allow advertisers to bid for ad placement on specific applications," says a Google spokesperson. Google works with application developers to determine the proper signals that help AdSense for Mobile determine the relevance of an ad. The system then matches the signals to relevant advertiser keywords that bid for placement on Google's Content Network through the AdWords interface.
Now, iPhone and Android application developers can connect their applications with Google's network. From there, ads appear within the applications and developers earn revenue, similar to regular Web sites displaying Google-brokered ads.
Tina Teng, senior analyst at research firm iSuppli, estimates that 10.7 million phones worldwide will run Android in 2010, compared with 22.3 million iPhones in the market. Those numbers will rise from 4.5 million units and 18.7 million units, respectively, this year.
Tests have been underway for a few months with companies, such as game publisher Sega, music search engine Shazam and restaurant recommendation site Urbanspoon. Now, Google is ready to open up the project to more developers that meet specific criteria.
Well-known for the mobile application that serves up recommendations for restaurants on the iPhone with manual search or shake of the phone, Urbanspoon began testing AdSense for Mobile a few months ago. The application lets Urbanspoon insert ads to target consumers through keyword and geography, which makes the ads relevant to the location of the user and the content of the application. So, Urbanspoon inserted the necessary snippets into the source code of their application to allow Google-brokered advertisements to appear within their application. When those ads are clicked on, taking the user to the site being advertised, Urbanspoon collects ad revenue.
As mobile phones continue to become more sophisticated, so will ads. Adobe Systems and handset maker HTC also reported Wednesday that the new HTC Hero will support Flash Platform technology to enhance Web browsing and provide access to a variety of Flash technology-based content available on the Web today. Verizon and T-Mobile USA plan to offer Motorola smartphones running Google's Android OS by the end of this year.