Betaworks Launches iPhone App Promotion Ring

This looks a bit like AdBrite's now-defunct Spottt, but brought to iPhone applications.

I'm a little skeptical, because over the past couple of years tons of advertising networks have tried to make in-app ads for other applications work, and they've all failed. Conversion rates have always been abysmally poor, to the point where it's not worth crapping up the user experience with an advertising banner. There's been tons of blog posts on this from a variety of sources.

Because conversion rates for most applications ads are so poor, companies like Flurry and Tapjoy focus on incentivized installs, where the user gets a bit of virtual currency in exchange for downloading the advertised app. (Disclaimer: I own a chunk of Flurry.) Those actually work really well, but that's because the user's been bribed.

Betaworks is full of sharp people, so I'm wondering what I'm missing - it's not like them to release a product that flies in the face of a couple years of market data.

Perhaps they'll move towards very small, hand-curated sets of thematically-linked applications, and distinctive ad units that don't look like anything else on the market - something like The Deck (http://decknetwork.net/). That's the only online model I can currently think of that hasn't been tried in the mobile app space.