Thoughts About Making Money with Ads

Tune Out is a nifty lifehack for the subway. It will alert you when your stop is approaching so that you can focus on reading, napping, gaming, doodling, and daydreaming while you ride.

David Mazza, 2013

I have always avoided putting ads into my apps. Advertising has always been an annoyance to me. I didn’t want to create something in my free time that I would be annoyed to use. This made sense when I did side projects as a way to learn a programming language. Now I am more interested in building a business.

Many developers feel that business strategy is below them, assuming that money will follow good code simply by shipping it. But just like programming, it requires a concerted effort to sell a product. Selling isn’t easy. Finding the audience for a product takes a long time. It is very difficult to buy an audience if you intend to sell directly to them. These sound similar to the reasons why programming isn’t easy.

The price needs to be appropriate for the audience and the problem that it solves. For example, I am willing to spend more on Spotify every month than any other app. The amount I am spending is less than purchasing music, and the cost is low enough to make pirating seem too time consuming. Spending $0.99 on a consumable in-app purchase in a game is a much more gut-wrenching decision because I have never had a budget for games. Even a dollar put into a game feels like a totally superflous expense for which I only receive a moment of pleasure in the game. The exceptionally profitable apps solve a problem in less time or for less money than it used to cost in the old world. But many apps solve a problem that wasn’t costly or time-consuming to deal with before. The long-tail of apps are either venture-backed or include advertising.

I never wanted to earn money from ads because I wanted to skip over the long-tail of apps right to an exceptionally profitable one. This constraint paralyzed me because the apps that I want to build don’t have an obvious business model without advertising. I would prefer to be building an app to gain an audience than to wait around for a better idea or the ideal way to monetize it.

The worst business model is not having one at all. Using external ads is a weak business model, but it is a start. No business model is permanent. I still need to figure out the potential lifetime value of a customer and where the incentives are under this model.

If you happen to live in Brooklyn along the L train, Tune Out 1.1 is for you. If not, sign up to become a beta tester for the next major release.

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