It may be one of the bigger dilemmas for app developers. You generate a vast amount of income via in-app purchases but at the same time you’re looking to further increase your earnings. Early research indicates that the implementation of in-app ads is the way to go.
As you know there are three ways to earn money with your app: charge people for downloading it, offer in-app purchases and implementing ads. Not one of those three approaches is THE way to go, money wise. To charge people upfront, for downloading your app, will keep a lot of potential customers from using your app. A combination of in-app purchases and earning credits through ads in your app seems to be the best earning model. Also it is a solution to keep non-paying users bonded to your app.
At least that is what mobile advertising network Tapjoy claims. In collaboration with the game Fresh Deck Poker it released a case study claiming that players will continue spending money on in-app credits, even when they receive the same credits as a reward for watching ads. Keep in mind that this is a one off research: it is not scientifically proven. Yet.
Idle Games, the developer of Fresh Deck Poker, split the group of users that previously made in-app purchases into two. For one group everything remained the same. The other group however started seeing ads and received credits for watching to them.
As a consequence Idle Games saw its overall earnings grow significantly, with 14 percent. “We were fairly certain that Tapjoy helped us drive more net revenue, and this test proved our hypothesis,” says Idle Games’CEO Stuart Lewis-Smith on Tapjoy’s blog (http://blog.tapjoy.com/case-studies/idlegames/).
“Additionally, we were pleasantly surprised to learn that it helped us drive more in-app purchase revenue. Not to mention deeper engagement and longer retention. We have found that in our games, player lifetimes are extended by interacting with rewarded advertising and collecting free currency. This keeps players engaged who may otherwise abandon the game, and we fount that these players were more likely to the go on to make purchases further down the line.”