Should An iPhone App Developer Charge Or Run Ads?

http://www.techcrunch.com/2009/03/22/should-an-iphone-app-developer-charge-or-run-ads-galaxy-impact-case-study/

by vaksel • 17 years ago

17 12 17 years ago

bigmac• 17 years ago

Intuitively it seems like ads ought to act as a constant revenue stream vs. the static one time cost of downloading an app. In theory, this should lead to more sustainable revenue streams. It would be interesting to see more data along these lines from more app developers.

dangoldin• 17 years ago

Unless people just get sick/bored of the app the same way people tend to stop using a paid app.

I think this would require a more long term analysis.

eli• 17 years ago

You need a lot more downloads of the ad-supported app to equal even a small one-time charge of a paid app

rimantas• 17 years ago

Oh, no, no more ads please. I will gladly pay just not to have something taking the real estate of my screen and trying to interrupt. I am with 37signals take on this: asking money for your work IS ok! http://www.37signals.com/svn/posts/1615-how-did-the-web-lose...

timr• 17 years ago

You're missing the point: the audience for an iPhone app is much smaller than the whole internet, and the apps are more ephemeral than what 37signals creates.

If your iPhone app only gets 20 paid downloads a day, you're hosed -- unless you've got dozens of apps in the pipeline.

simonk• 17 years ago

People aren't even reading the article anymore. They tried charging for it, didn't make as much as ads.

sounddust• 17 years ago

Make a free, ad supported version. Make a paid, ad-free version with extra levels. No need to worry about which version is more successful; you're covered either way.

lliiffee• 17 years ago

You might hurt yourself if one is much more profitable than the other. e.g. if you could charge $20 for the app, but no one pays that if a free (much less profitable) ad supported version exists.

silencio• 17 years ago

Not only this, but that ultimately the decision comes down to if ads and a free verson are even appropriate in the first place for your users, and if bad reviews for a free version will hurt your paid sales.

From my point of view as part of the Colloquy (irc client) team, we're trying to decide if a free version with no ads limited to one channel on one server would help sales. The problem is there's only one free/ad supported irc client out there on the app store, and it's a complete piece of crap and the reviews reflect that. However, the reviews for that app also reflect that most people downloading and reviewing are people who do not understand how irc works, and to an extent the reviews for our $1.99 USD app also reflect that - our reviews are pretty much a reverse bell curve where all the 4-5 star reviews are typically from people who know what irc is, and all the 1 star reviews come from the people who thought we were a sex chat app (seriously...it's getting tiring recommending these channels) but weren't satisfied with the learning curve and this whole thing evens out to 3-4 stars. If the percentage of people with no irc experience grows with the free app (as there is no longer that $2 barrier), the growing bad reviews from people who don't read app descriptions might hurt paid app sales if someone with irc experience does a search for 'irc client' and spots this horribly rated free version and a mediocre rated paid version.

pxlpshr• 17 years ago

I've said this before but I'll say this again because it's keeping us more profitable than most. Run your own ad system, use LinkShare for your links (earn 5% on sales), advertise your own apps for free, add a few banners for apps/games you think your visitors will like b/c you'll likely over-expose your visitor if you only have a few ads running.

Our # of downloads and usage is about 10x's less than this case study, but our advertising revenue (5% from LinkShare) is roughly the same. And, we've correlated that roughly 25% of our premium app sales is due to the banner ads in our free app (which we pay $0 to advertise through).

I love AdMob for what they are trying to do, but the economics of the AppStore (as stated by many people) is broken for most indie shops who don't have a bankroll to throw at advertising/customer acquisition. The 30% apple takes off the top is traditionally a healthy marketing budget, without it most devs are left to "AppStore-marketing" after bills/costs are paid. The ROI on admob just doesn't make cents (:P) for most people.

kwamenum86• 17 years ago

The calculation of the "paid-app" to "free-app" downloads is clearly flawed; This ratio would be higher if the application was offered at 99 cents when its popularity was still on the rise. They tried setting a price long after popularity had reached its peak. Still an informative article though.

bozone888• 17 years ago

I have to admit this is our first iPhone app and we knew nothing on this. Here’s how Team iBokan got started (http://ibokan.com/2009/iphone-bokan/)

However, we’ve learned our lessons and done much better with “Cute Math”（http://ibokan.com/2009/about-cute-math/) and “Eye Test“ (http://ibokan.com/2009/testing-your-eyesight-handily/)

The graphics are created from our own tools that will be open to public in April. I hope you’ll check it out later.

Thanks a lot for your comments, which is really what I wanted for this post.

–Bo Wang http://www.iBokan.com

Should An iPhone App Developer Charge Or Run Ads?

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