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With more and more apps going free, mobile ads are here to stay, says report

Posted: , by Chris P.

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App analytics company Flurry has outed a report earlier today pointing towards a continuing trend of apps gone free. Showcasing how pricing of apps has been changing the past four years, the authors of the report offer an insight into why, and this one is actually a no-brainer – people like free stuff, so naturally – more free stuff is becoming available.

Choosing the iTunes Store over Google's Play Store for its seniority, Flurry's analysis reinforces this notion:

With more and more apps going free, mobile ads are here to stay, says report

As you can see, 90% of all iOS apps are now offered for free, with 6% going for $0.99 a pop while the remainder is split among the higher price tier. “But why?” is a natural thing to wonder, and on this account we have to agree with the report – consumers have made their choice. Yes, ads are annoying, but they're a necessary evil and, as this turn of event exemplifies, preferred over paid content.

With Android aiming to reach consumers across the entire price spectrum, the next finding of the report should be of no surprise to anybody: Android users, on average, are less willing to pay for content. In fact, when compared to their iOS counterparts, they spent three times less on apps:

With more and more apps going free, mobile ads are here to stay, says report

What's more, iPad owners really are the cash-cows that iOS devs should be targeting – and they do: according to Flurry, iPad apps on average cost over two and a half times more than iPhone apps, and over eight times as much as Android apps. The company notes that this is, at least partially, due to the higher income class iPad owners usually belong to.

No one likes getting skinned for their money, and the company's research agrees. According to an experiment it ran, many previously paid-for apps went free after significant testing of the price elasticity of demand for their apps. In simpler terms, that's simply how much demand for apps fluctuates according to a price change. The results indicate that an increasing amount of paid apps, even the ones that cost as little as $0.99, have decided to go free after testing the waters and finding out that even a dollar is a significant roadblock to demand. Demand that they can otherwise monetize via ads.

With more and more apps going free, mobile ads are here to stay, says report
So what does this all mean? The guys behind the company put it plainly:

While consumers may not like in-app advertising, their behavior makes it clear that they are willing to accept it in exchange for free content, just as we have in radio, TV and online for decades. In light of that, it seems that the conversation about whether apps should have ads is largely over. Developers of some specialized apps may be able to monetize through paid downloads, and game apps sometimes generate significant revenue through in-app purchases, but since consumers are unwilling to pay for most apps, and most app developers need to make money somehow, it seems clear that ads in apps are a sure thing for the foreseeable future. Given that, we believe it’s time to shift the conversation away from whether there should be ads in apps at all, and instead determine how to make ads in apps as interesting and relevant as possible for consumers, and as efficient and effective as possible for advertisers and developers. 

source: Flurry via TechCrunch

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posted on 18 Jul 2013, 10:11 2

1. ilia1986 (unregistered)

Absolutely. :)

Unless you got an Android device, rooted it, and installed Adaway. :D

posted on 18 Jul 2013, 10:12

2. akki20892 (Posts: 3902; Member since: 04 Feb 2013)

no doubt

posted on 18 Jul 2013, 10:42 1

3. Gaurav008 (Posts: 328; Member since: 20 Jul 2012)

Still,WP doesn't have a good "free and quality" app collection. One of the biggest reasons of the failure of app ecosystem.

posted on 18 Jul 2013, 10:51

4. greyhulk (Posts: 162; Member since: 30 Jun 2010)

Fortunately, so are mobile ad blockers.

posted on 18 Jul 2013, 12:19 1

5. TheLolGuy (Posts: 483; Member since: 05 Mar 2013)

And so are the companies paying to be able to circumvent them.

Seriously, these ads have to be there. The app is already free. It makes me facepalm so hard when I see so many reviews on the Play Store giving awful ratings just because a free app has ads that I have personally confirmed are placed non-invasively.

When did people begin to believe that money sprouts from trees?

posted on 18 Jul 2013, 13:04

6. icyrock1 (Posts: 307; Member since: 25 Mar 2013)

However, the ads make the developer request permissions that the app normally wouldn't need to have to run. I'd rather they offer an ad free version for a price that doesn't request has many permissions, and a free one that does.

posted on 18 Jul 2013, 16:36 1

7. TheLolGuy (Posts: 483; Member since: 05 Mar 2013)

That's true, and I'm in the same camp as you. The problem is, the vast majority do not share the same opinion as us. Once apps start coming out free, people aren't so willing to go back to model that prices apps at a few dollars. Because of this, it's just like you said -- sometimes invasive ads and other things that may or may not collect anonymous information about you

It seems a lot of consumers don't understand that there must be tradeoff. They just use the free apps and hope that with enough complaining they'll remove ads.

Some have said it's because they don't want to buy an app for a few dollars then find out it's junk. Well, you can refund your purchase and uninstall the app within a reasonable time, so it's clear that they are being dishonest. We've moved into an era where everything must be a free-to-use model, with anonymous data collecting and ad spamming as a tradeoff. As services become more sophisticated and more costly yet consumers still demand the same great price of $0, we'll be trading more privacy for it. How far will consumers go to keep free services?

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