Yesterday, Flurry Analytics released a report which showed a significant increase in the number of apps supported by ads in the past four years. Most mobile apps have always been free; in recent years, however, the proportions have shifted against paid apps.
This led Marco Arment to comment:
Compared to traditional web-browser ads, mobile-app ads so far have been much more intrusive to users, less effective for advertisers, and less profitable for developers. And despite ads being the norm for both low- and high-quality websites, apps with ads are perceived as profoundly cheap and low-quality.
I think this conclusion was borne out by Google’s Q2 results, also released yesterday:
Google reported second-quarter results that missed analysts’ expectations for revenue and profit. They showed that its desktop search business continues to slow and ad prices continue to fall as it struggles to make as much money on mobile devices. […]
Mobile ads, [analyst Colin W. Gillis] added, are inexpensive yet “overpriced because the conversion rates are so low.”
As of today, an app with ads will provide users with a crummier experience, and won’t generate the same kind of revenue for developers. Due to unreliable business models by some apps, however, they will be increasingly shoehorned into apps for which the developer could have charged a buck for.