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The irony of ad-sponsored apps

August 18th, 2011 General

Money

Here’s a thought, or rather a theory, that we’d like to run by you.

It starts with a small piece of irony. Most advertisers want public to buy their product, i.e. pay for it. When an app (on any platform) is free and sponsored by ads, a large part of its user base will be public who want something for free. If we’re allowed to generalize here, they don’t want to pay if they can avoid it.

Spotted the problem yet?

How do you sell to public who don’t want to pay? This dilemma will be even more pronounced in apps where there are paid, ad-free options in addition to the free, ad-sponsored version. The most valuable customers for advertisers would be the ones who paid for an app, not the ones who opted for the free version.

This is a problem that in-app advertisers will have to in some way overcome if they don’t want to simply waste a large part of their advertising efforts, which means:

Promoting something free.

This is of course not a new trick, but it makes even more sense when advertisers are targeting a name inside a product that is free. It essentially becomes an exercise in simply getting customers in the door, hoping to sell them something once they’re inside.

The question now is, how effective is that, really?

Yes, this was a super-small post, but we thought it was an fascinating thing to bring up. What are your thoughts on this?

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