Let's take a step back and look at your business model. Should you even include ads in your app in the first place? Are they likely to be successful?
For advertising, context is everything. In general, ads are most effective when the user has what is called "commercial intent", meaning they are looking to make a purchase. The next most effective ad is when users are in discovery mode, educating themselves about potential products they may buy in the future. In part, context is why targeted ads on Google have been so effective whereas similar ads on social media and other sites are not. The ads on Google can help a user perform their task (searching) whereas the ads on Facebook do not help users connect with their friends in any way.
Personally, I have never once found an iPhone ad useful or even relevant to me and I would never purposefully click on one even if I did. The reason is this: if I'm in an app, I'm in it for a reason, whether to check news, play a game, or do something else. I have little to no incentive to click on an ad, and, in fact, seeing ads does nothing but frustrate and annoy me.
So, let's suppose your users either have either commercial intent or are in discovery mode while using your app. Will the ads that you're serving be relevant to what they are trying to do? If you have a travel booking app and your ads are all about hotel discounts, great, then ads might be a good fit for your app. If, however, your ads are about pet supplies, they will be decidedly less helpful to the task at hand and are more likely to frustrate the user, especially if they don't even have a pet.
So, when should you include advertising in an app?
- Does the user have commercial intent or are they in discovery mode?
- Do you have enough control over the ads to make them relevant to the user?
- Will the ads that you're serving assist or enhance the primary goal of the user?
If you answered no to any of the above, you should skip ads. Goading users by annoying them them to upgrade isn't a great way to get customers or a loyal fan base.
But wait, you say, what do I do, then? How do I make money? There are a few ways, depending on the application. Many games have switched to in-app purchases. That may be a possibility. You could also have just the premium app.
However, I would consider having a free and premium app that are differentiated by available features and not by whether or not ads are present. Keep your free app useful enough that people will want to use it, but save some of the features that are most likely to appeal to people who will pay for the premium version.
In general, I would advise most ventures to steer away from the ad-based business model, no matter if you have an app or a website. It's a worse experience for users and it rarely actually makes the business money. Throwing up ads is the lazy way out. Spend a little more time on a creative business model and you'll be far more likely to succeed.
Which do you think is a better foundation for a business?
- We annoy our users so much with ads on our free version that they're forced to buy our paid app.
- Our users love our free app so much that many of them upgrade to the paid app to get access to even more great features.
It is perhaps a subtle difference in mentality, but it can go a long way with your users.