Solution: AdMob's new iPhone Download Exchange program, which helps applications gain downloads by advertising within other iPhone applications. Applications join the program and advertise other iPhone apps that are also part of the network and in turn have their apps promoted within other applications. Hence, the Download Exchange.
The AdMob exchange program works just like an advertising campaign - members of the network have ad spots for displaying either paid advertising or ads that are through the iPhone Download Exchange. AdMob already has over 1000 iPhone applications in its network, giving it a good starting point for its program.
It's also a smart program - it does not advertise applications that the user already has installed, targets based on geography and device (so iPod touch users don't get apps that are only for iPhones), and generates detailed reports on the impression and success of the campaign. Members of the AdMob network can also control how often ads are either paid ads or Download Exchange ads.
The Benefit to Developers
There are similar successful programs for Facebook applications, also run by companies with major application networks such as RockYou (I was once in Facebook app development and have experience with these programs). This, however, is the first for iPhone applications. Its focus on download exchanging is also a key differentiator.
If the download exchange program succeeds, AdMob will become an even more established force in mobile advertising. Its success could also spur growth for many applications that would have otherwise stayed undiscovered.