Should You Charge Fees or Run Ads To Monetize iPhone Apps?
By Anna Johnson on March 27th, 2009What will make the most money – selling iPhone applications or offering them for free, integrating ads into the applications?
Well, Bo Wang of the iPhone application development Team iBokan (part of Bokan Technologies) recently posted an article on TechCrunch, explaining what his company found when they put this question to the test…
Team iBokan released its Galaxy Impact brick-break game in the iTunes App Store on October, 2008. There was no charge for the app and it was downloaded about 220,000 times in its first two weeks.
Galaxy Impact ranked as No. 10 app in the ‘Top Free Apps’ and No. 20 in the ‘Top Free Apps’ lists within the Game category.
On November 9, 2008 Team iBokan began charging a $0.99 fee per download. The volume of downloads plummeted. In the three days Galaxy Impact was available for $0.99, downloads trickled to just 70. Total revenue was $69.30
Team iBokan promptly made the game free again, and downloads exploded back up to 1,435 the day they became free (after just 20 paid downloads the day before).
After making the game free again, Team iBokan updated Galaxy Impact with ads from Admob along with other new features. Downloads spiked, achieving a peak of 30,647 on November 22, 2008, two days after the update release.
Since then, the average daily ad revenue based on advertising with Admob has been $2.50 per day, after peaking at $16.37 on January 17, 2009.
Bo Wang says the average number of downloads has since slowed to about 120 per day. If Team iBokan charged $0.99 per download, he believes, then (based on the past free:paid ratio) downloads would average 0.3 per day, amounting to $0.30 per day.
So… in Team iBokan’s case, using an ad-based model was clearly preferable. At the same time, ad model or paid, we’re not talking big bucks here, are we?
Seems that only truly innovative iPhone games will allow game-makers to build fortunes. And, despite Team iBokan’s experience, they may well be able to charge for such games and achieve entirely different financial results.
