With my companies Funky Expenses Android applicaion we have two versions; An ad-supported version and a pay-for ad-free version so that users can choose how they help to fund development (yes, we do get requests for a free ad-free version, but unfortunately that won’t keep the company afloat). The ad-free version is available from Google Market (which currently has the largest user base by a long way) and AndAppStore, and the pay for version is only available in Google Market.
We’ve always used AdMob for the in-app adverts because they have an Android SDK, the adverts are not too intrusive, users seem happy with the experience (the app has an average of over 4 stars on Googles Market and the active installs count is in the low thousands and on the occasional bad day decreases by only a few users) , and we’re happy with the results (an eCPM of around 0.21 US Dollars). We looked at Googles Adsense for mobile applications, but the 3 month minimum participation and reported issues with adverts meant that it’s not something that we’re willing to use at the moment.
While the revenue generated from the adverts would not be enough to sustain the company on its’ own, the monthly income from ads is nearly twice the amount we receive from sales of the ad-free version, and so is a significant source of revenue for future development.
I suspect many people would see sales of the ad-free version as being the key to success, but there are several reasons why a larger user base for the ad-support version than the pay-for ad-free version is beneficial to our business. The main reasons are;
1) Regular income.
Once you’ve sold an Android app on Googles Market the users get free upgrades for life. This, to us, does not make long term economic sense. To continue developing Funky Expenses we need source of regular income, and that’s what the ad-supported version provides.
2) Problems in Google Markets payment system.
Google Market has, by far, the largest number of potential customers, but the payment system (based on Google Checkout) is far from ideal. For example; we can only list applications in British pounds (because we’re a UK company) and most of the customers are in the US and so are used to dealing in US Dollars.
Any salesman will tell you that when dealing with a customer you want to deal in a currency they’re comfortable with so you don’t end up with the transaction being disputed because something the customer thought would be one price actually turns out to be another once the bank has done the currency conversion.
3) Not everyone can access applications which you have to pay for on Google Market.
This means that if we focused our development and revenue generation on the pay-for version the number of potential customers would be far smaller, which is not what we want.
This then leads to the question; Why have a pay for version? Well, the answer is simple, it’s what users asked for. Some users don’t want ad banners and are willing to pay to remove them, and, to us, it’s better to have a customer on a paid version than to have lost a user.
Hopefully this post will provide some of you with some ideas for your apps, and provide others with some understanding of why in-app ads make sense. If you have any comments please post them below.