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A case study in Free vs. Paid and the value of advertising

Ed99Ed99 Posts: 192Registered Users
My most popular iPhone application, Fake-A-Call, has a long and I think interesting history... Although this may seem like shameless self-promotion (and hey, I do hope some of you forum members check out the free version... ;) ), I think it's a story worth telling.


I developed Fake-A-Call over a year ago. It is one of those 'fake calling' applications where it makes your iPhone ring as if someone is calling you. I think I was second or third to market with this type of app. I priced it at 0.99$ for a day or so, got no sales and then switched the priced to free and submitted an update adding banner ads.

To my surprise the app took off once I switched it to free. It rose up the category list and soon the top 100 free list, topping out somewhere around 11 or 12 I think. For awhile this was making me over $250 a day and I was quite pleased by it, but I kept seeing my competitors app in the Top PAID section, and I was pretty sure to be in that position he would have to be selling way more than 200 apps/day... Greediness got the better of me and I ended up removing the ads from Fake-A-Call and changing the price to 1$ to cash out! Also influencing my decision at the time was a weak performance of my advertising company.. Fill rate was often below 60% and the eCPMs were nothing special..

So I changed to paid and made slightly more money than I was running ads for a couple weeks, but not the giant gains I was hoping. My competitors app seemed to have a solid position and it was hard to directly compete, so I changed categories and that helped out some too. Over the course of several more months though revenue began to decline as happens to most paid apps..

I introduced a free with ads version again with limited functionality, 'Fake-A-Call Free' (The functionality was the same as when Fake-A-Call was originally free). This was marginally popular, but nowhere near as popular as it had been. On a normal day I've been getting around 30-40 sales of Fake-A-Call and 500-700 sales of Fake-A-Call free. A respectable amount, but a shadow of it's former self.

I've been focusing on other things lately, but I thought I'd try one last effort to try and propel Fake-A-Call above it's competitors. Last week an update was approved adding all the features of Fake-A-Call to Fake-A-Call Free, the only difference between the two now are the displaying of ads. I think this makes my app the best free fake calling app out there, but to prove it I need to rise above my competitors in the rankings and stay there. To provide the boost, I spent $1500 displaying ads for Fake-A-Call Free yesterday, and will spend an additional $1000 displaying ads today, hoping this is enough to drive my ranking up the Utilities list (and hopefully staying there)! I started around 80 I think.. currently I'm at #34 while my competitors are at #24 and #12... I may not be able to catch up, but if I can sustain my current position I think it will have been worth it... if not, I'll know to focus my time on improvements or other apps.

Anyways, if you got this far thanks for reading ;) If you have any suggestions/comments/questions I'd love to hear them. I know I didn't play this one right at all... my biggest regret is not creating a 'premium' version instead of changing Fake-A-Call to paid and making a new free version... I lost a nearly 1.5 million ad viewing base by doing that! :(
Post edited by Ed99 on
Apps by <a href="http://www.excelltechmobile.com"; target="_blank">Excelltech Mobile</a><br />
<br />
<a href="http://itunes.apple.com/us/app/fake-a-call/id294415285?mt=8"; target="_blank">Fake-A-Call</a> / <a href="http://itu

Replies

  • ethanwaethanwa Orlando, FLPosts: 733Registered Users @ @ @
    edited November 2009
    Ed99 wrote: »
    My most popular iPhone application, Fake-A-Call, has a long and I think interesting history... Although this may seem like shameless self-promotion (and hey, I do hope some of you forum members check out the free version... ;) ), I think it's a story worth telling.


    I developed Fake-A-Call over a year ago. It is one of those 'fake calling' applications where it makes your iPhone ring as if someone is calling you. I think I was second or third to market with this type of app. I priced it at 0.99$ for a day or so, got no sales and then switched the priced to free and submitted an update adding banner ads.

    To my surprise the app took off once I switched it to free. It rose up the category list and soon the top 100 free list, topping out somewhere around 11 or 12 I think. For awhile this was making me over $250 a day and I was quite pleased by it, but I kept seeing my competitors app in the Top PAID section, and I was pretty sure to be in that position he would have to be selling way more than 200 apps/day... Greediness got the better of me and I ended up removing the ads from Fake-A-Call and changing the price to 1$ to cash out! Also influencing my decision at the time was a weak performance of my advertising company.. Fill rate was often below 60% and the eCPMs were nothing special..

    So I changed to paid and made slightly more money than I was running ads for a couple weeks, but not the giant gains I was hoping. My competitors app seemed to have a solid position and it was hard to directly compete, so I changed categories and that helped out some too. Over the course of several more months though revenue began to decline as happens to most paid apps..

    I introduced a free with ads version again with limited functionality, 'Fake-A-Call Free' (The functionality was the same as when Fake-A-Call was originally free). This was marginally popular, but nowhere near as popular as it had been. On a normal day I've been getting around 30-40 sales of Fake-A-Call and 500-700 sales of Fake-A-Call free. A respectable amount, but a shadow of it's former self.

    I've been focusing on other things lately, but I thought I'd try one last effort to try and propel Fake-A-Call above it's competitors. Last week an update was approved adding all the features of Fake-A-Call to Fake-A-Call Free, the only difference between the two now are the displaying of ads. I think this makes my app the best free fake calling app out there, but to prove it I need to rise above my competitors in the rankings and stay there. To provide the boost, I spent $1500 displaying ads for Fake-A-Call Free yesterday, and will spend an additional $1000 displaying ads today, hoping this is enough to drive my ranking up the Utilities list (and hopefully staying there)! I started around 80 I think.. currently I'm at #34 while my competitors are at #24 and #12... I may not be able to catch up, but if I can sustain my current position I think it will have been worth it... if not, I'll know to focus my time on improvements or other apps.

    Anyways, if you got this far thanks for reading ;) If you have any suggestions/comments/questions I'd love to hear them. I know I didn't play this one right at all... my biggest regret is not creating a 'premium' version instead of changing Fake-A-Call to paid and making a new free version... I lost a nearly 1.5 million ad viewing base by doing that! :(

    I had pretty much no success with spending about $5000 on advertising about 9 months ago. One of my apps got in the Top 100 of Paid Games, but QUICKLY dropped off after I stopped spending money. Maybe there was just too much competition for me and my game wasn't good enough.

    Anyway, I'd love to see how this turns out for you and if you end up making a profit or not from your ad dollars spent.

    Ethan
  • rwenderlichrwenderlich Posts: 162Registered Users
    edited November 2009
    Interesting info. Where have you guys been running your ads?
    Check out <a href="http://www.raywenderlich.com"; target="_blank">my iPhone development blog</a>!<br />
    <br />
    Motivate yourself to become an expert with <a href="http://www.vmwstudios.com/LevelMeUp/"; target="_blank">LevelMeUp!</a><br />
    <br />
    --Ray W
  • AdvertiseSpaceAdvertiseSpace Posts: 40Registered Users
    edited November 2009
    Interesting info. Where have you guys been running your ads?


    I too am interested in this answer?
  • CurlyBraceCurlyBrace Posts: 3New Users
    edited January 2010
    Interesting story, thanks for sharing! My experiences are similar (though an order of magnitude less interesting, in dollar amounts :) ).

    I started out free with my Mazer game, and found out that when making it paid (after I saw it getting downloaded way more than I anticipated), the number of downloads decreased by three orders of magnitude. Full story in the link in my signature.

    New information is that there is a rather large seasonal effect in ad-supported revenue. Apparently, since the holidays are over, fill rates are dropping rather dramatically (number of downloads seem to stay rather stable).
  • Ed99Ed99 Posts: 192Registered Users
    edited February 2010
    Sorry I didn't follow up on this sooner. I placed all the ads with Admob.

    The extra $1000 i spent did give me a nice temporary boost in the ratings, but I ended up sliding back to the 30s when the campaign was over. I was able to maintain a ranking in the 30s since the original advertising campaign, making it a success for me (although I should have stopped after the first $1500).

    One thing that I hadn't considered was the benefit of getting this increase of rank in time for Christmas -- I'm sure I saw a lot more holiday sales at rank 35 than I would have at rank 80. Advertising for the free version even seemed to help out my paid version as well.

    Of course hubris often gets the better of me, and last week I launched another campaign trying get above my competitor. I upped the ante and spent 4k in a single day to boost my rankings, and although I got another noticeable gain, it wasn't quite enough to leapfrog me over my competitor and I again fell back to my mid 30 equilibrium. Perhaps if I would have spent twice the money it would have achieved my objective -- but for now I'm going to let it rest where it is. eCPM's have been drying up for the ads that I serve, so investing in the free apps isn't as interesting to me at the moment.

    Some things I've learned: If you advertise to increase your rank, you will loose your gained rank very quickly unless your app really deserves to be there. It is a fierce market out there and it gets sorted out quick -- however spending money to increase your rank might be one of the only ways for you to get the exposure to find out what your 'equilibrium' ranking is.

    Also, it ended up costing me about 0.65$ per download. Not cheap to boost your rank up to #1 so you can fall down and find your true equilibrium assuming the top 10 in each free category probably get 10s of thousands of downloads. If you know what you're doing, it can be useful though.
    Apps by <a href="http://www.excelltechmobile.com"; target="_blank">Excelltech Mobile</a><br />
    <br />
    <a href="http://itunes.apple.com/us/app/fake-a-call/id294415285?mt=8"; target="_blank">Fake-A-Call</a> / <a href="http://itu
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