The developer of ProPassword (for iOS devices) has posted an interesting testimony on his blog. He released the app for free, relying on Apple’s advertising platform, iAd as the sole source of revenue. Over 15,000 downloads later, this developer decides that ad-supported free apps just aren’t a reliable revenue source. He writes:
I was hoping to at least make the $99 I paid for the Apple developer program and I succeeded. Still, I don’t consider it a big success financially, although it has been an incredible learning experience.
I recommend reading the full post, there are some good points to learn from, even developing for Android devices. The only time ProPassword generated substantial advertising revenue was after a major traffic spike. Without the support of blog publicity, or the featured app status, daily income dropped to practically nothing. The post concludes with a rather grim outlook for iAds:
My conclusion so far is, that I won’t try the iAd route again. It’s just too hard to break even with an app that way.
My next app is going to be a 99ct one, we’ll see how well that works.
Reading testimonials like this, it’s easy to conclude that free apps won’t generate much revenue unless they become a huge hit. With my own apps on the Android Market, so far I’ve seen a similar story. Releasing an upgrade brings in some extra traffic, but daily revenue is still quite low.
However, there are more factors to consider than just straight out revenue. If you have published multiple apps, one successful app can serve as free publicity for your other, revenue generating apps. It’s not necessary for every release to generate revenue in it’s own right, but the sum total could still be successful financially.
Alternatively, you could release a paid version of the free app, which removes the advertising and possibly adds more features. The upgrade incentive means your free app can be useful, even if the advertising revenue is only enough to break even on the development costs.