Results from my Great Advertising Experiment

Matthew Campbell, June 11th

Ads.pngAre you curious what effect throwing $100 into advertising your iPhone would have?

Well, so was I! So I decided to advertise my premium app, Tasting Notes, which sells for $4.99 on the app store. Tasting Notes has not been updated in months and so sales have leveled off to pretty low levels.

The Subject

Even though sales are slow right now; when I first launched Tasting Notes it sold much better due to being high up on the new release list. Tasting Notes has very positive reviews (4 star average) and I do know that it sells well when exposed to the right audience.

This fact made Tasting Notes a pretty good test subject in my mind. Also, I felt that the $4.99 price point had a good chance of showing me a return on investment.

Baseline Stats

Using AppViz and Numbers I figured out that my average sales over the entire past month were 3 units in the United States each day with a standard deviation of 2. This boils down to this: I sold between 1 and 5 copies of Tasting Notes each day in the US over the past month.

For me to show any positive affect with advertising I would need to sell at least 6 copies on days I was advertising.

Before I get into the results of my current attempt to use advertising with AdMob I want to share what I tried with Google earlier this year.

Google Adwords? Don’t Bother!

Earlier this year I tried using Google AdWords to sell Tasting Notes. I did not notice any change in sales when I did this although it could have been lost in the noise of being on the Top 100 list in the lifestyle section. Google is nice in that it allows you to target people searching for terms that would apply to your app. In my case I targeted people looking for search terms like “wine tasting mobile software”.

The problem with Google (or actually with the App Store) is that there is no way to track “conversions”. Google will let your track click-through rates (how many times people who see your ad click on your link). In fact, Google charges you $.50 to $2.00 (and sometimes more) for each click. However, there is no way to measure how many clicks turn into sales.

Do the Math!

I know from studying Internet Marketing that most people would be happy getting a 5% conversion rate from Google AdWords. That is 5 sales for each 100 clicks. For Tasting Notes, 5 sales would net me $17.50. Buying 100 clicks from Google would cost me between $50 and $200! (that is about what it cost last January).

Best case scenario is that I would be losing $32.50 by using Google AdWords (and that is assuming a conversion rate I cannot confirm).

The bottom line is that Google is too expensive to advertise products that usually cost 99 cents; it is even too expensive for pricey apps like Tasting Notes.

What About AdMob?

Much more promising is AdMob. AdMob ads are embedded right inside of iPhone and iPod apps so you know that the people looking at your ad can actually buy your app. AdMob always provides frameworks that let you embed code into your app that will allow you to track conversions. AdMob is also very responsive to the community. When I tweeted last week about testing AdMob Jason Spero (@Speroman) replied with an offer of help.

Here is Me Throwing Down 100 Bucks on AdMob

To see if I would benefit from advertising I put 100 bucks into my AdMob account and created an ad. Here is what the add looked like:

Note that I include the price right in the ad – this was advice given to me by a rep from Admob who took the time to review my ad copy and made this suggestion. The idea is that it is cheaper to include the price – since I was paying for each click I did not want people clicking on my ad that did not want to buy $.99+ apps.

Once I created my ad I was able to configure some options – I indicated that I wanted my ad only displayed in North America and on iPhones on a Wi-Fi network. I agreed to pay 5 cents for each click. btw: Google was charging me 50 cents to 2 dollars for each click last January.

But, what I could not do was specify the demographics of the people who would see my ads. Google will let you pick keywords that your ads show up with. AdMob ads apparently just show up based on geography. Big problem for a niche app like Tasting Notes.

Here is what My $100 Got Me

As you can see 422,315 people saw my ad and I got 1,986 clicks. So, 1,986 more people should have seen Tasting Notes in the App Store on their iPhone. This seem impressive right?

I thought so too…

How Much Money Does 1,986 Clicks Get You?

Remember that my baseline sales is 1 to 5 apps per day in the US over the past month. My AdMob campaign ran for two days in the US costing a total of $100. Here are my sales for those two days:

Day One – 3 sales
Day Two – 1 sale

Ouch!

Essentially, throwing down 100 bucks had no effect at all on my sales – the same results as my Google test earlier this year… After these two days I am down $86! For me, advertising continues to be unhelpful and I cannot recommend it yet even though I want to! I want to have some way of promoting apps outside of position on the app store.

Discussion – Why?

On the surface I feel that adverting should work – especially with AdMob’s cheap rates and iPhone only market. But, it doesn’t work for me. It could simply be that Tasting Notes is too much of a niche product to benefit from scattershot ads. I know that Tasting Notes does sell because sales spike after updates.

It could be that my ad copy is not good, but the cost of tweaking it seems to far outweigh any possible return on investment even at my $4.99 price point.

My conclusion for now is that there is NO ad engine that can outperform the app store itself. I get more milage out of submitting free app updates that get under the noses of my customers than any other intervention to date. And it is always free so updating apps comes with a built in 100% return on investment.

I want to know what YOU THINK

Have you tried advertising yourself? If so, have you measured any benefits from doing so? What other promotions have you done where you have seen tangible results outside of leveraging the app store itself?

UPDATE: After I posted this article I got some responses from the Twitter-verse that I thought you may find interesting.

from @sdarlington

@MattjDrake Saw the same thing as you with Google AdWords. Not tried AdMob. Best advertising is personal recommendation. http://is.gd/YPtO

from @ggrell

@MattjDrake Have u considered promoting Tasting Notes via someone like @garyvee ? I bet if he talked about it, you’d get a lot of purchases

@MattjDrake Understood. Glad u did that experiment, since I’ll need to consider the same soon on the Android side of things.

from @cc_dev

@MattjDrake Hey Matt, great blog! Have you considered advertising on App review sites like 148apps.com? Would be interesting to see :D

@MattjDrake I tried it myself on a Danish review/news site and haven’t had great results so far. 6889 impressions and 164 clicks. 7 sales..

from @mattfarrugia

@MattjDrake No worries. thanks for article. Confirmed a bunch of things I was guessing would be the case. We need another way to advertise.

[...] June 11, 2009, 12:53 pm Filed under: Uncategorized (My Original Blog Post: http://howtomakeiphoneapps.com/2009/06/results-from-my-great-advertising-experiment/) Are you curious what effect throwing $100 into advertising your iPhone would [...]

A couple of weeks ago I did much the same experiment with Admob on my two best selling apps (aWake!Gently and aWake!Simply) and I had similar results. I spent $300 and saw little or no sales as a direct result. In fact the following day, my sales for aWake!Gently were the worse they had even been. Sure it was a coincidence but either way, Admob and the like is not for me.

As you say visibility is the key. Regular updates (providing some new compelling functionality) seems the way to go.

Thanks for sharing your results.

Michael.

http://sendmetospace.co.uk

Results from my Great Advertising Experiment…

You’ve been kicked (a good thing) – Trackback from iPhoneKicks.com – iPhone SDK links, community driven…

The flipside is how little the CPMs are for the App publishers!!

400k impressions for $100 or a CPM of 25 cents!

[...] Results from my Great Advertising Experiment [...]

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