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Almost Three-Quarters of Monetized Apps Make Their Money from Ads



There was a man on Shark Tank who charges $9.99 for his fitness app and he claims he’s making a lot of money doing it. I was amazed. According to Flurry, the average iPhone app costs .19. The average Android app was .06 and a whopping .50 for iPad. The odd number happens because they are so many free apps in the mix – up to 90% of them, in fact.

Take a look at this:

Flurry app priceThe overall price point for an app has dropped in the past three years. In 2010, there were enough apps over $5.99 to make a visible mark on the chart. In 2013, they’re barely there.

So how are developers earning an income? (Assuming they are earning and income which is a big leap in itself. . . ) Millennial Media’s new State of the Apps report shows that 73% of monetized apps are running ads. 45% put a price tag on their apps and slightly less use in-app purchases to make money.

17% of developers said they aren’t monetizing their apps, but almost half of those guys say they plan to sometime this year.

On the glass half-full side, 56% of app developers said they expect their income to increase this year thanks to in-app advertising. This is probably true because more marketers are looking at this as a viable way to reach new customers.

But in-app advertising is still a tricky business. I started playing a new iPad game about a month ago. There wasn’t a single app in sight until I was asked to update the app about a week ago. Small banner ads now appear at the bottom of the screen while the game is loading. It takes forever to load, so no big deal. Still, it bothers me a little that the ad lays on top of the screen. Why can’t we find a way to integrate the ads so they look like they’re a part of the page. I’d be more likely to click if I saw something that said, while you wait for the app to load, watch this cute video. Right now, I’m reluctant to click because I’m afraid it will cause the game to stop loading.

Two days ago, another interesting thing happened. I completed a level and my reward was a full screen commercial for a movie. No escape button. No choice but to watch if I wanted to keep playing. At least it was fully integrated into the app so it didn’t look like a Band-Aid that was slapped on at the last minute.

The logic here is that I’m now hooked on the game so I watched the ad. If it had happened a month ago, I might have passed but now I’m hooked and no 10 second commercial is going to stop me from getting to the next level. Smart.

The app business is booming and that’s good for marketers. Millennial’s report shows that 60% of developers expect to have more than 5 apps in the store by next year. Last year, it was only 37%.

Finally, here’s a look at the types of apps developers are developing.

type of apps millennial media

It’s games for the win! After that, we’ll be more productive. Sounds about right to me.

 

  • http://computerstories.net/ Rowan Gonzalez

    I wonder how much value the ads really have for the advertisers. I never clicked on an ad.