Google opens up on AdSense splits as Apple war gets personal

May 24, 2010 11:18 AM EDT

Google today at last revealed the revenue splits it applies on AdSense -- a move the company has faced (and fielded) plenty of pressure to confirm in the past.

The revenue split for AdSense for Publishers is 68:32, Google said, adding that the split for AdSense for search stands at 51:49. In both cases the larger figure goes to the publishers.

I'm curious at the timing of this announcement. With Google's I/O event now heading into memory, is this a pre-Worldwide Developer Conference a move to protect AdSense against the onset of Apple's iAds?

Apple's iAds ain't no Toy Story

iAds will offer publishers a 60 percent slice of revenue. With Apple allgedly pushing for premium prices for advertising via the platform it is possible publishers, in this case app -- including newspapers and magazines experimenting inside Apple's insanely popular iPad/walled garden for fee-based content -- developers could see big bucks landing in their monthly account balances.

Google's not being completely transparent here: The company hasn't revealed its revenue split for AdSense for Mobile (which directly competes with iAds).

The search company argues that its AdSense for Mobile is "continuously evolving", so costs and splits aren't yet finalized.

Apple's new iAd platform will be built directly into the iPhone OS interface and will be focused (at least initially) inside apps running on the iPhone OS. These don't currently include TV...

The company aims to make these ads both pervasive and compelling through the introduction of compelling design and utility. Video and the chance to interact with ads is also part of Cupertino's plan. Don't neglect Apple's expected to shift 24 million iPhones this year.

Built without Adobe Flash using HTML5, iAds will offer all sorts of features, including movie playback, trailers, interactive games and more. Apple has in the past offered a peek at an iAds clip for Toy Story 3 (video below), which added the ability to watch trailers, play games and purchase things all from within the iAd.



Evidently, Apple's attempt to monetize the mobile App market is a huge big kick in the teeth for Google, which essentially hopes to monetize any kind of interaction with digital content on digital devices. Sure, Google started off making its millions through ads beside search results, now with Android and its plethora of other products, Google wants a slice of much more of the action you may come across out there.

Because most mobile advertising sucks

But is it good enough? Apple boss Steve Jobs may be a known perfectionist, but he doesn't mess around -- he has a reputation for setting high store on quality. On existing mobile ads he said, "Most of this advertising sucks. We want to change the quality of the advertising."

With Apple reportedly demanding an estimated $1 million to buy into its iAds scheme, the big question will be if the company has enough inventory to pump these high-paying pester messages into iAds-using applications.

In a way, this new competition in the mobile market has already boosted fortunes at Google. That company's $750 million purchase of AdMob was recently approved precisely because Apple has also taken a move into the mobile ads market.

Apple had originally wanted to purchase AdMob, but Google kicked Cupertino out the park with its $750 million offer,  that's why Apple subsequently acquired Quattro Wireless for a reported $275m.

"As a result of Apple's entry [into the market], AdMob's success to date on the iPhone platform is unlikely to be an accurate predictor of AdMob's competitive significance going forward, whether AdMob is owned by Google or not," the FTC said in a statement.

Gartner expects the mobile advertising market to expand by 78 percent to $1.6 billion in 2010.

Now we know Google is truly attempting to put the smack down against Apple right now. With that in mind the tail end of Google's statements is of some interest.

"When considering different monetization options, we encourage you to focus on the total revenue generated from your site, rather than just revenue share, which can be misleading," the company writes on its blog.

"For example, you would receive $68 with AdSense for content for $100 worth of advertising that appeared on your site. If another ad network offers an 80% revenue share, but is only able to collect $50 from ads served on your site, you would earn $40. In this case, a higher revenue share wouldn't make up for the lower revenue yield of the other ad network."

Can Apple deliver? Google hopes it can't

Clearly, Google is hoping "other ad networks" prove themselves unable to build up the ads inventory required to compete with the current market leader.

Interesting to see how this game plays out. One things for sure, whatever the splits with advertisers and publishers, Google doesn't sound like it wants a 50:50 split on the overall mobile market with another key partner, or series of partners.

And in advertising in the mobile space (today) Google now has a new enemy in Apple.

Apple CEO Steve Jobs will offer a keynote speech at WWDC 2010 on June 7, Apple today confirmed.

In a series of emails this last weekend, Jobs told Apple watchers that they "Won't be disappointed" at Apple's news from WWDC.

He also reassured iPhone watchers that there's "not a chance" Android -- even with the new announcements of last week -- is surpassing Apple.