Ads Hominem

Before I wrote even one line of Objective-C, I was thinking about the different business models that the App Store affords a publisher. If I wanted to make money, then there were two different paths I could take.

The first option is pay apps. Apple allows you to charge money for the applications that you submit to the App Store, in 1 dollar increments starting at 99 cents. This option comes with its own set of questions. How much should I charge for my app? If I were somebody else, would I pay that amount of money for this app? Do I have to worry about refunds? What about taxes, and other messy legal ensnarements?

The second option is ads. Apple also allows you to list your apps on the App Store for free, and free apps tend to get more downloads than pay apps. This makes sense obviously, as there’s no downside or barrier to trying out a free app. Companies like AdMob exist solely to serve ads to iPhone apps, and they provide SDKs that are pretty easy to use. With this business model, you would create an app that’s free on the App Store, and make your money through the third-party ad provider. The major downside with this approach is that people loathe ads, even in free apps (myself included).

Both options have their pros and cons. After evaluating both of them, and considering other external factors, I decided to try the free-with-ads approach for my first major app, DDR Compendium.

This may have been a mistake.

As I had already known, people hate ads. My reviews for DDR Compendium have been pretty evenly split so far, with a disproportionate amount of 5-star reviews and 1-star reviews. I suspect that a good portion of the 1-star reviews are primarily a result of the ads, which is kind of disheartening. I have to admit that I’ve done the same thing to other apps in the past, bestowing a 1-star solely because of their ads, regardless of the quality of the actual app. An ad hominem attack, if you will. I guess you reap what you sow.

What I didn’t expect, was how little money you actually make from ads. AdMob only gives you money for ad-clicks, and in my short experience, I seem to be getting 1 click for every 12 ads viewed. I’m not sure if that’s relatively good, bad, or average, but it translates into about 80 cents per DAY.

Sure, 80 cents per day is better than 0 cents per day, but I’m not sure if that’s enough to balance the ad hominem 1-star reviews. I’ve heard a few internet urban legends of people getting rich off of this business model, but now I’m sure that they’re in the vast minority. For every “Sound Grenade” that miraculously makes it into the Top 25 Free Apps and makes a few hundred thousand dollars on ads, there are many others that make practically nothing.

In a way, this is a microcosm of the App Store in general. If Lady Luck happens to push your app into the Top 25, you’re going to do well regardless of anything.

In the end, I’ve decided not to incorporate ads into any future applications. Well, that’s not entirely true. If I manage to get a free app into the Top 25, there will be a mad dash to put ads into it, and update it as fast as I can. An unlikely scenario.

Going forward, I’m going to be sticking with pay apps, with free Lite version demos. This is one of the most popular business models on the App Store, and even though I have no personal experience with it, I’m guessing it’s for a reason.

~Stache

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