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Data Indicates Free Ad-Supported iPhone Apps Can Be Profitable

May 6, 2009

adwhirl

First they tell us one thing, now they tell us another.  New data from the mobile advertising company AdWhirl indicates that free ad-supported iPhone applications can actually be profitable.  This report contradicts the Pinch Media data that was released earlier in the year that indicated it would be better for a developer to charge a low price for an application than to offer it for free with ads.  So who should we believe? According to TechCrunch, AdWhirl co-founder Sam Yam claims that the flaw in Pinch Media's report is that they assume applications only show a single ad impression per user interaction.  Instead, Yam claims that most free ad-supported applications actually serve about 3-5 ad impressions per user interaction, which would explain the discrepancy. The AdWhirl report indicates that applications that break into the top 100 free applications list at the App Store make about $400-$5,000 a day.  As you can see from the the image above, applications have a revenue peak and drop-off within a two month period, but eventually the revenue streams remain consistent.  This would explain the wide range of revenue that AdWhirl lists. Of course it isn't possible for every developer with a free ad-supported application to make $400+ per day, and breaking into the top 100 is easier said than done, but that is not unlike the paid applications side of the story.  AdWhirl's report is simply proof that either system can be profitable if you have a quality application and a good marketing strategy, but we could have told you that. AdWhirl is currently serving 250 million add impressions monthly to over 10 percent of the top 50 applications in the App Store.

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