

Should An iPhone App Developer Charge Or Run Ads? - vaksel
http://www.techcrunch.com/2009/03/22/should-an-iphone-app-developer-charge-or-run-ads-galaxy-impact-case-study/

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pxlpshr
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.

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rimantas
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...](http://www.37signals.com/svn/posts/1615-how-did-the-web-lose-faith-
in-charging-for-stuff)

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timr
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.

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bozone888
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>

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bigmac
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.

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dangoldin
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.

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sounddust
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.

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lliiffee
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
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.

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kwamenum86
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.

