Revenue from ads in iPhone Apps – don’t count on it much

September 9th, 2009
by Peter Melnikov

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Most of the first-time iPhone app developers believe they can release the app for free and profit from built-in ads. Here is our verdict: if you app is being downloaded less than 2000 times per day it’s not even worth spending time signing up for the ad network program and installing the code. You start earning $10 per day from ads if you have 2000+ daily downloads, or – if you already installed stats tracking software – 20.000+ daily impressions.

To figure out why start-up developers are so upbeat about their well-doing, you only have to take a look at the figures being mentioned by the main iPhone ad networks. A year ago, for example, Admob cited $30 CPM brand ads suggesting it being the minimum CPM. Likewise, Medialets were proudly introducing their Dockers ads which brought in around $20-30 CPM. And now with pretty tough competition on the advertising market Admob still talks about amazingly high average CPM figures ranging from $12 to $14.

Let’s turn to more realistic figures. The truth is that average ads networks presently pay about 50 cents CPM for the ads. It means that if a thousand of people have seen the ad it will bring you as much as $0.50. Where are those mythical $30 CPM ads that will make you rich? There’re but marketing ploys to attract app developers.

To get an unbiased view ask experienced developers who have been in business for a while. Bo Wang’s Galaxy Impact – a highly popular ad supported application with an army of more than 160,000 fans brought in $0.23 CMP profit. Other app developers cite $0.50-$2 CPM maximum. Average add supported app will scarcely make its developer stinking rich.

Actually, it’s not only about marketing tricks. The fill rate is another main contributor to the misleading statistics. Even if there’s that notorious $30 CPM ad, it’s not likely to be displayed on your app permanently. Quite the opposite, as remnant ad inventory will be shown most of the time.

Moreover, it’s no wonder that any ad network is interested in the great amount of app developers. Now you can understand why they pitch editors and journalists with success stories and real-life examples of developers becoming millionaires by means of high CPM ads. The info they mention in their interviews is mostly abnormal cases rather than regular stuff. Once again, pure marketing fluff.

I don’t intend to accuse ad networks of being deceitful or dishonest, no way. I just want to call all would-be app developers to be wise, empirical, and savvy. Always do your calculations basing on real figures and statistics. Lack of circumspection will leave you with nothing.

Now if you have solid downloads on the iPhone App and want to earn some launch money there we would recommend you sign up with www.adwhirl.com – this ad solution allows you to add the biggest ad networks on the fly and it displays the most high-paying ads automatically. What’s more important is that you can upload your own ads which might be very useful if you want to cross-promote your other apps.

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