Ad Supported Business Models

General Forums Off-topic Chat
1

After having a conversation here regarding Microsoft’s likely shift to a more ad supported business model and sitting here watching the ads cycle on TV I started thinking about the whole premise of ad supported business models and how they’re actually a form of wealth redistribution.

Ace Dragon mentioned earlier that people are increasingly expecting free services and products. Now these services and products cannot actually be free so in order to meet these demands businesses are turning to ad supported business models. If you’re not already aware, this is where a business provides a service or product to the consumer for free or at a reduced price and makes up their losses by selling ad space hosted by the product to other businesses.

The thing is that this does not actually equate to free for the consumer. Those companies buying the ad space don’t just grow money on trees, they get it from you, the consumer. So they have to increase the price of their products in order to shore up the money to buy ad space, those are the products you buy. So instead of paying $200 for Windows you get Windows for free, but your yearly grocery, clothing, video game, etcetera expense goes up by roughly $200 so ultimately you’re still paying for it, the fact that you’re paying for it is just filtered through intermediaries similar to money laundering.

The way that it equates to a form of wealth redistribution is similar to insurance. With car insurance safe drivers are paying for the expenses of accident prone drivers, with health insurance healthy people pay for the medical expenses of unhealthy people. Here those who consume more are paying for the ad supported services of those who consume less.

For instance, I don’t purchase much and what I do purchase is usually cheap generic stuff. As a side note the generic stuff is often made of the same things the name brand stuff is, it’s cheaper because the generic brands don’t advertise which is expensive. Anyway because of this I pay very little for the ad supported services I use, not nearly enough to cover the cost of providing this service to me. That extra cost is covered by those who do buy a lot and mostly name brands, they end up paying more than what it costs to provide those ad supported services to them so it evens out for the service provider.

Anyway, just thought that was interesting and not related enough to Microsoft to post in that thread.

Having said that one would think I’d be more in favor of ad supported services, but I’m not. I actually don’t really use a lot of ad supported stuff anyway, save for the occasional TV and websites like BA.

2

I wonder how much people want for ‘free’ is driven by the economy? I’ve only recently found work to pay my bills after a hiatus and even that is sketchy at the moment; it’s a zero hours contract minimum wage but it pays and there is (currently) plenty of shifts available. When I was unemployed however, I found I wanted more stuff ‘free’ because I simply couldn’t afford to pay for anything other than the absolute essentials.

People forget we’re in a recession, the whole world is in turmoil with its finances and people can’t afford to be constantly paying for things. It’s a very real problem.

3

An interesting point, but like I said you’re still paying for it. So for instance the economy takes a nose dive and you lose your job. You want to cut out all the unnecessary expenses from your budget so you can afford the essentials such as food.

The thing is that you cannot cut out the ad supported unnecessary expense because the cost is baked into those essentials that you buy. The food, personal care and such all advertise which increases the price of those items so they can pay for those ‘free’ services you don’t ‘need’ and could otherwise cut out of your budget.

You have no choice but to pay for it. In fact you’re paying for ‘free’ ad supported services you don’t even use. Don’t watch TV? You’re still paying for it every time you buy a product that advertises on TV. Don’t play ad supported video games? You’re still paying for them whenever you buy a product that advertises in video games

P.S. A single 10 second plot of ad space can cost millions depending on where the ad is displayed and that doesn’t even include the cost of producing the ad which, especially for those featuring high priced actors, can also cost millions. Multiply that by the number of ads and the number of times they’re displayed and you’re payin’ out the yin yang for stuff you don’t even use.

Don’t watch Lifetime, you’re payin’ for it. Don’t care for baseball, you’re payin’ for it.

4

You are correct that you still pay for it somehow, because the products are not being made by charities, but by for-profit companies that have to make revenue if they are to remain in business (and keep said product available).

For instance, people might complain about Twitter’s moves to increase the display of advertising, but the reality is that they have yet to make a profit since their inception and would be long gone if not for investors continually throwing money at it. The only real alternatives for Twitter then is to make their service premium (ie. a monthly fee to tweet) or create a ‘pro’ tier, but that implies that millions are willing to embrace the idea of premium once again which will not be easy.

5

This is why I am willing to pop a few hundred. Its drama free, Paid for and mine till hell freezes over.

6

Interesting you should bring up Twitter Ace. Twitter itself doesn’t lend well to turning a profit via traditional means. I doubt people would be willing to pay a subscription for it and since the tweets are generally viewed places other than Twitter itself, such as TV or embedded on websites, ads on the actual Twitter site wouldn’t get a whole lot of clicks.

Like you said Twitter is supported largely by its investors which might seem odd because the whole point of investing is to turn a profit on your investment so investors usually only invest in profitable organizations. Twitters investors are different though, they’re not investing in Twitter because they expect to turn a direct profit, they invest in Twitter because it’s a lucrative advertising platform that can be used by the investors’ businesses to advertise their products which brings in additional revenue to their businesses.

So investing in Twitter is a direct loss, but by keeping Twitter afloat the investors create new revenue streams for their businesses. Twitter, like Facebook, is what you would call a ‘word of mouth’ or ‘viral’ advertising platform. These are so lucrative because research indicates that word of mouth advertising is the most profitable form of advertising, people generally trust their friends even more than they do celebrities so when a friend shares their recent Amazon purchase on Twitter or Facebook they’re more likely to consider making a purchase themselves.

P.S. This is exactly where Microsoft wants to be and precisely where Google already is. People tend to think of Google as a tech giant, but that’s not actually true, Google is a marketing firm that uses technology to promote its advertising business. Microsoft wants to be able to compete with Google on that same level.

The reason for tracking mechanisms built into Android, Google, YouTube, Cookies and now Windows is advertising. Companies want to know more about who’s buying their products and who’s clicking their ads. Like any investor these companies want a greater return on their investments, they want a greater return on the money they spend on marketing. To do this they want to rely less on carpet bombing and more on guided missiles, they want to know more about you so they can target you with ads aimed specifically at you because a 32 year old man isn’t likely to click on an ad about tampons.

Not long ago Google made a push for people to start using their real name as their user name on Google services. The reason for this was because Google wanted to be able to attach everything they knew about you to your real name, not an anonymous user name. Google wanted this because Facebook already had it.

P.P.S. As a side note I left one YouTube tab open while typing up this post and over the course of typing this post my ad-blocker blocked over 140 ads on YouTube.

7

I believe Google is actually giving up on the push to force people to use their Google+ accounts on Youtube now (because Google has never been able to get Google+ to the point of directly competing with Facebook, that and it proved to be very unpopular).

Also, the 140+ ads, usually a number that high on a safe site like Youtube means you might have some malware installed on your machine (you might want to scan).

8

There are a lot of inefficiencies in our economic system. This comes from being concerned for the longevity and viability of single entities. Many of the models of more prevalent establishments are based on maximization principles. Though this works out well for that specific entity for a time, it aggregates not only wealth but markets as well. This has a negative effect on the overall equity. Advertising in the casting of a large net tactic is inefficient with every failure to make a sale. This push toward a more targeted distribution of ads could increase the efficiency overall, however personal information is being traded without realizing that it is the intellectual property of the individual. This is essentially theft. There is a serious ethical issue with it, especially where there is no gratis product or service associated with it. It’s important to bring this up because this is where a system at growth maximum with small numbers of large businesses at growth maximum is likely to default. No matter what solutions are adopted, the imperative to grow will always require more aggregating solutions that exacerbate the issue.

It’s also good to get a clear definition of what gratis actually is. The resources in which the unit currency is an access credit are community property. The resource credit is supposed to be a vehicle for distribution of the resources in a somewhat autonomous economic system. Understanding this, it is incorrect to assume that assets are property. Though this is the case, egalitarian distribution of wealth is impractical because some endeavors intrinsically require more resources than others. That’s is just the way it is. This is however no excuse for the centralization that maximization algorithms result in. This is not even an efficient model. Distributed systems are just more competent than centralized systems in the first place. The growth of an organization is a boon to the system initially, however at some point it becomes overwhelmed and inept when it becomes a lean giant.

My problem with a lot of “user agreement” based deals is the expectation that the enduser understand the terms when the reality is known to be otherwise. This makes the ad support questionable to start with. The fact that user information is often more valuable than the product it is traded for is another solid reason to question the model. I suspect that enterprising individuals will attack this problem by creating a resource where consumers can have some voice in what their personal information can be traded for and for what value. This is a solvable problem with a Smithian establishment. I guarantee that there is a great deal of aggregation in this model that needs to be properly distributed. This is due to the fact that many pay for products and services that they don’t use.

I don’t buy that people want a free lunch. It’s complicated but the behavioral sciences suggest that it isn’t the case. Environmental issues are what we are really talking about in essence. Aggregation is cause for one wanting their fair share. That is likely the situation.

9

I don’t have any malware, it’s because of my ad-blocker. Heavy advertising sites like YouTube use an asynchronous Javascript method to load ads onto the page. This is because the ads are not stored on the same sever as the site you’re accessing and the ad server may be running slow or not responding at all. In that case the asynchronous method ensures that if an ad server is not responding it will not stop the rest of the page from loading.

These asynchronous methods then check to see if an ad has not loaded within a given amount of time and if not it tries to load a different ad. In my case none of the ads are loading because my ad-blocker stops them so the Javascript just keeps trying again and again.

@Blonder: In terms of questionable practices regarding the handling of personal information we were doomed from the start. People are engaged in a never ending game of one oneupmanship in a bid to ensure their continued survival. Corporations are vying for marketshare and resources when one is pushed to the brink or when a newcomer trying to stake their claim enters the picture they need to push the boundaries a little further. When this happens all the others need to follow suit or face their own demise so those boundaries are continually being edged further and further until the time when the whole thing collapses.

It’s a cycle that has repeated time and time again, though the cycle appears to speed up with each iteration. Private organizations competing for survival continually push the limits of what is acceptable until the day they finally push it too far and the people rebel, tear down the whole thing and start anew. Having just experienced the worst of what private tyranny has to offer the people install a powerful government with all the tools necessary to prevent such private entities from gaining so much power ever again.

In the early days this government has all the best intentions, being run by those who know all too well the hardships of living under a tyrannical regime. Over the course of generations though the government is overrun by corruption and itself becomes increasingly tyrannical until the day they finally push it too far and the people rebel. The people tear it all apart and having just experienced the worst of what government tyranny has to offer the people install a weak government that is constrained by laws preventing it from becoming a powerful tyrannical organization.

In the early days this new system has all the best intentions, but over the course of generations private organizations rise to great power once again only to abuse that power and see this cycle live on again and again.

As the pendulum swings…

P.S. I’d say we’re coming up on the end of this half of the cycle in the next several decades.

10

@atr1337 That’s difficult to argue with for the most part. It’s also difficult to analyze the economic system without touching on politics, if one is to explain the basic issues with it. I’ve written an essay in an effort to make a case for a more scientific approach to socioeconomics as opposed to the ancient political framework that now exists. If you’re interested it’s on my blog.

One thing that may make a difference is our impending transition to a type one society. High technology is likely to increase the standard of living as it has in past revolutions such as the Agrarian and Industrial Revolutions. Market systems could become obsolete as Drexlarian nano-tech like DARPAs’ Molecularly Precise Manufacturing project can essentially make households for the most part self-sufficient. This is the ultimate recycling solution. It could change everything in ways that we can’t really predict. It doesn’t look good for markets though. I would say that there is more than enough evidence to be confident that fundamental change is probable in the coming decades.

11

I am quite sure that Microsoft Corporation will be sued … successfully … and forced to abandon their notions of switching to an “ad supported” business model. They provide something without which a computer cannot fulfill its purpose. In effect, it is the engine and the drive-train of the car. This does not give them the privilege of putting advertisements on my computer.

(Never mind the corporate customers who are the company’s bread-and-butter.)

In the bigger picture of things, I am already very-plainly seeing a shift away from the blind, uninformed acceptance of the distribution of personal information. At a camping trip, I talked with a dozen people who had closed their Facebook identities, and who told storekeepers, “no, you don’t need my phone number … you only need to accept my cash.”

“Ad supported business models” are not business models at all. They are only a vain attempt to counter the reality that most Internet strategies that are being touted today … do not yield revenue at all. It’s very easy to find articles such as this one, which says:

more than half of the app developers they spoke to make less than $500 a month from their paid apps. And for developers that develop free apps that are funded through advertising, the picture is even grimmer. According to the study, those developers make less than $100 a month in ad revenue.

“My <<whatever-it-is>> is not a television.” (In fact, I have not owned a television in more than 30 years.) I block all advertisements, and in any case I have never bought a single thing in response to an internet advertisement.

Actually … I even got rid of :eek: my “smart” phone, after it “butt-dialed ‘911’ three times” while I was mowing the pasture. (Yes, even though the management of mobile-app projects is part of my daily-bread job, and even though I therefore have a drawer-ful of “test machines.”)

David Gewirtz wrote this interesting article, where he said:

But the problem with the app market is that prices have been pushed down so much that you can buy an app for less than you’d pay for a can of soda. For the app software business to be profitable, then, you need to sell as many apps as the soda companies sell cans of soda. For most app developers, that’s not happening.In fact, most smartphone owners never, ever download an app. According to a study reported by our own Adrian Kingsley-Hughes , “the entire app ecosystem is being driven by about one-third of smartphone owners, with seven percent of owners downloading nearly half of all the apps.”

(He wrote that article in a good follow-up to this one, where once-again he is totally candid:

Those numbers also raise the specter of something called a “discoverability challenge.” In other words, how will people find your app? Notice I haven’t even talked about whether doing an app is economically viable, or whether lack of technical skills is an issue. I’m just asking a basic question: how will users find this thing?

The cold reality is that “they probably won’t.” Even in 2012, it was observed that 60% of app-store apps have never been downloaded. (At the time, this was about 400,000.)

Other stats are equally grim: one in four apps are abandoned after a single use.

Identical statistics can readily be found for e-books (of all types) and downloadable music (in all stores.)

In short, “the ‘glam’ of The Internet” is now on a collision course with “the ‘reality’ of The Sales Game.”

Once again, Apple knew exactly what it was doing when it sold the right to develop apps for their iOS platform. They knew that everyone on Planet Earth would pay them $50, even though a large percent of them would never even earn that $50 back. Ever.

I have a somewhat-curious perspective on this, because, 19(!) years ago now, I “happened upon” a very-niche tool idea (ChimneySweep®), which at the time I never thought would amount to much. I wrote a tool that I personally needed, started talking about it on Usenet news-groups, successively improved it, and “did very well, although I still do not drive a Porsche.” (Even today, copies continue to sell, and license revenue continues to come in.) There were five things, I think, that most contributed to that success:

  • The product (still) fills a practical need. If you have a Paradox/BDE (or dBase/Clipper/FoxPro) database, this product can probably repair it, automatically.
  • The product costs between $150 and $400 a copy.
  • The product went through (so far) six “releases,” and owners of previous releases had to pay for later ones, although they received a generous discount.
  • (Perhaps most importantly of all …) There were no “free trials.” (A “10 tables for 10 days” program died almost immediately.) You pay $35 for the privilege of even trying it … this entire amount can be applied, within 30 days, to a permanent-license purchase.

I very quickly learned to hold my hand out, requiring a sustainable amount of money to be put into it, and to turn away those who would not pay. I also very quickly learned to use “only online distribution.” No retailers, no (more) floppy-disks or CDs, no more printed manuals.

It was “a self-sustaining business model,” and many thousands of customers (thank you!) sustain(ed) it. No, it didn’t make me rich. But, it did pay the costs necessary to allow me to provide the product’s benefits to thousands of companies (and OEM licensees) all over Planet Earth … and it still hasn’t stopped, although of course it has slowed down considerably.

“Apps,” “e-books,” and “music” all faced the identical fundamental problem: how to get people who were accustomed to “visiting a web-site ‘for free’” to switch to something (an “app”) that, due to development and distribution differences, was actually “costly.” They found out, the hard way, that the consumer was not actually willing to buy anything.

Think about it: you might pay 4 times as much for a single cup of coffee than you pay for an app … if you pay for the app at all, which you probably don’t. You understand that, tomorrow, you’ll buy another cup, and pay another $4. Yet you profess to be “outraged” to pay for ‘an app,’ let alone to be asked to pay for an upgrade? Talk about it over today’s $30 dinner, or tomorrow’s another-$30 dinner.

This is not “a business model.” It’s a one-way ticket to the poor-house … and “advertising” will not save you.

There are … millions of “you schlebs” (sorry) out there, waiting for your Golden Ticket to arrive and wondering where-the-hell it went. Welcome to real markets. Turns out that the game hasn’t changed much.

Face it: the sellers of mobile hardware consciously removed all “barriers to entry,” glowingly promising a share of a huge pie “to everyone,” well-knowing (a) that only a tiny percentage of the people they were speaking to would ever see it, but also knowing (b) that almost every one of them didn’t know that (yet). So, they sold tickets. Just like the “photographers, whores, and hardware salesmen” … rich men, all … who sat on the docks of San Francisco and Seattle and waved good-bye to the 49’ers, then went back to count their (real) fortunes.

All of them knew that you’d never find a nugget. But, all of them knew that you were certain that you would. And therefore, all of them knew that they had something to sell you, and that you’d be a long, long way away from either city when you went broke.

“Old Age and Treachery will outdistance Youth and Vigor, every time.”

12

All technology is subject to obsolescence and replacement. This is even the case with social systems; given our history as evidence, the engine being environmental pressures. This is a much more accurate method than assuming equivalency in truncates, social heuristics and anecdotes.

To understand advertising, it is probably useful to understand its function in our social system. This would probably require reduction. For this I would like to suggest a combination of Economics, Systems Theory, Information Theory, Emergence and Behavioral Science.

Advertising is actually an integral component to resource distribution. It connects recipients to specific goods and services. It might be a good idea to question its worth in our economic system. Is it necessary as a source of information? Is it generally an efficiency? Does it augment our economic viability? Does it coordinate with our predispositions to certain behaviors? I would suggest that all of these questions are required in order to answer even one. The reason is rooted in Systems Theory. All components in a system are subject to interaction with other components. The outcome is essentially due to coordination or lack there of, of the behaviors of the specific components.

  1. Is it necessary as a source of information?

I would say so, to some degree. Even with recent search capabilities, the information that a specific good or service exists is still required in order for it to be found. Word of mouth is also an advertising strategy.

  1. Is it generally an efficiency?

Obviously not. This doesn’t seem to be because of any intrinsic lack of efficiency in distributing the information however. This seems to be due to specific models. The targeted approach is much more efficient though it has raised concerns concerning its requirement for personal information. This will also likely have negative effects with respect to compensation for advertisers as the personal information market begins to mature. Environmental (social) pressures will likely create opportunities for solutions that people would gladly pay for. This could result in a more open market where individuals can leverage their personal information as opposed to just having it taken from them. This would likely, greatly cut into advertising profits. The engine of such an occurrence would be a combination of social pressure and common diversification of markets. The clincher is its potential to produce profit. This of course would create artificial scarcity by the principles of supply and demand as the supply would no longer be so readily available.

The solution seems to be in the cost effect of digital distribution. The internet will likely continue to reduce costs of distribution of information for years to come. Aspects of models that are not efficient enough to produce adequate amounts of compensation will likely be abandoned for more cost effective ones. Though it isn’t generally efficient, it will likely normalize to a minimal degree. This may not be the best news but it’s probably accurate.

  1. Does it augment our economic viability?

Of course. It aids in distribution. It is a targeting mechanism with the potential to increase efficiency in distribution. This isn’t always the case (or arguably the norm) however. When it is used to enable specific components of the system to the inefficiency of the system as a whole, (this thread is full of examples, as if examples weren’t trivial to find) the outcome can also be that some viability is lost. This however is subject to normalizing factors as well. These would be market diversification, obsolescence etc.

  1. Does it coordinate with our predispositions to certain behaviors?

Yes and no. Though it is often informative, it is also often manipulative and incorrect. We have, as of yet been unable to constrain it to more empirical information. Marketing has even employed behavioral science in psychological manipulation of consumers to accommodate maximization principles. This is however an issue with growth based models and maximization algorithms and not necessarily advertising in general.

(Conclusion)

So what does all of this mean? It means that a broader definition of advertising may be useful for useful predictions. It means that it doesn’t seem likely that it will be abandoned all together. Rather it seems that a great deal of development is in order. It also means that “consumers” should be weary of the manipulation that is likely encoded in the information that is being given to them. It also seems to mean that there are no simple solutions to the problems.

Fortunately it means that the worst aspects aren’t likely to be sustainable. This is because of another aspect of systems theory. Advertising is a component of one system. Natural systems are all components in a hierarchy. The only exception may or may not be the “Bulk” referred to in physics, and we may never know the answer to that. For this Emergence may be useful. It usually describes behaviors that “emerge” in systems that are not found in its components. This is also a limiting factor that, though generally intractable is observable in retrospect. The observations made suggest that behaviors that do not coordinate with existing emergence have less of a chance of becoming viable, novel behaviors as they are weeded out by systemic exclusion. To know what forms of Emergence are responsible for such occurrences, retrospect is required as foresight is intractable. Transformation has always been the yield of technological advancement. Though social reform has played a role, environmental factors have always been a necessity for general prevalence. All major social transformations are due to advancements and have raised the standard of living dramatically. This has been in opposition to human made, environmental factors that bring out the worst in us. Though it really can’t be considered Emergent at the moment as we are in the moment, Drexlarian Nano_Tech could prove to change the social paradigm fundamentally. This would essentially make markets obsolete as the major vehicle of distribution. Information systems would be the source of schematics and or recipes for products and the manufacturing would occur in the home. The models are emerging right now with 3D Printing. To assess the probability of such a technological advancement, one need only to look at the possibility and the amount of effort that is going toward it. With Drexlarian Nano-Tech, it’s supportable with known physics and is being researched by (DARPA Molecularly Precise Manufacturing) a well funded government organization. It’s just a matter of time. This time it will be increasingly difficult to produce a general perception of scarcity and the resulting negative behaviors as households become near self sufficient. This should however be taken with a grain of salt as emergent properties are intractable until they are right around the corner.

For the most part, we have been steadily becoming a more gentle and reasonable species. This is a provable outcome with historical evidence. It would stand to reason that it would influence our systems and/or vice-versa. Advertising would likely be subject to this influence.

13

I can see value in information about products being available for people to find, but that value is completely negated when that information is wholly unreliable.

I caught an infomercial on TV the other day about a pillow that was so miraculous, miracle was in the name of the product by the way, that it could make every aspect of your life better. A pillow…

I recently installed some open source, supposedly trustworthy eh, screen recording software on my girlfriends tablet so she could record a tutorial for my crochet application that was requested by a user. There were two instances during the installation where the installer made it appear as though installing and agreeing to license terms for third party adware was a necessary part of the installation. At first glance it looked as though you were agreeing to install the downloaded application, at second glance it looked as though you had to install the adware in order to install the downloaded application.

The problem in all this is that you end up with millions of people walking around buying things they don’t need or want. This is a complete waste of resources causing us to pollute more than we need, work more than we need and produce more than we even want.

Valuable resources and man hours are wasted producing miracle pillows that cure everything instead of being put to actual good use because people were duped into buying some garbage that’s just going to end up where it belongs, the local landfill.

14

I couldn’t agree more.

15

First, All of us here pay for our bandwith and power (Or someone else kindly provides that on our behalf, Make them coffee this morning to say thank you) And if your average bandwidth goes up over time, Your ISP will charge you more and more over time to offset their costs.

So when you have that malware and addware that is streaming data and chewing up cpu cycles. Those cycles which cost power to run. It is costing you.

And bad adds cost everyone. With TV for instance you got adds targeted to the right group of people at the right time of day and their was a quality that had to be maintained. On the internet you can photoshop a donkey dong onto a skinny boy and market your male enhancement product almost anywhere. And the cost of that is not that people tune out that one add. They install add blockers and tune them ALL out.

And I will say this as a consumer. I love adds for products I might like. Their informative. It lets me know the product is now a thing. And I can look at the add and take a fair guess about the quality of the product based on the quality of the add.

But on the internet I don’t have that. I just use discussion forums like this, I’ll do my reading to catch up a bit more on my chosen products and occasionally see links to other things I might want to check out. And it kind of works. If I see someone has a few hundred posts and they say X is a good product, I’ll check it out. If I see someone with one post who says the same thing, I tend to think its a scam. Normally people with one posts are asking for free art, Not providing any information about themselves and or their use for the art…Or their a graduate student who leaves a false impression about their accomplishments on a kickstarter (Something that could get them expelled) and on their face-book page they have posts indicating that they cured diabetes. ( And yet I was told I was paranoid for finding that suspect)

16

It’s another form of pollution! They are just consuming health & energy… same as they are selling packaging, marketing, propaganda with the product or even worse with something that you have a right to (ie. water…). You truly believe you have to pay for it? For your right to free speech? For your right to live?

17

There is a time and a place for advertising … and there must also be a choice. “My computer’s operating system” is not an appropriate time nor place. The fact that you supply the operating system which runs my computer does not mean that you have the prerogative to install and run software on it to suit your thirst for revenue.

I once downloaded a GPS app for an Android. Nice app. But what the author didn’t say was that it had advertisements on it! I would have to pay $1 to turn them off. Instead, I deleted the app and gave it a blistering one-star review. (One of many folks who had done the same.) He never got his dollar.

I cheerfully would have paid $1 or more for the app, and had the author simply sold the app to me for $1 or what-hae-you, I would have given the app five stars.

Too bad that “app” designers believe that their serious products are not worth serious money. They pay $5 to Starbucks for a single, consumable cup of coffee-and-milk … they do this once or several times each weekday … and yet, they are afraid to ask for money for their “apps!” No wonder they’re starving.

Believe it or not, “I’ve got money,” and I don’t mind spending it … i-f I get (more than) what I paid for, and if you are entirely honest and up-front with me about all the particulars of the sale. This is “business 101,” and the rules apply here just as they do in any and every other form of commerce. “A workman is worthy of his hire.”

18

A lot of people release ad supported apps. for free (with the option of a permanent IAP to disable them) because it allows them to release the app. for free while having a chance to recoup the costs (because let’s face it, there’s a lot of good premium apps. on mobile that barely make any money at all. The Google Play store even strongly biases toward free apps. by showing a lot more of them at once in the ‘free’ section).

In my opinion, one of the best ways to go would be to have two experiences in the game, an option of playing the game with free 2 play trappings and a premium experience accessible via a permanent IAP. The other good way to go would be to not have timers and such, but have free vs. premium follow what’s known as the shareware model. You have only a portion of the application playable for free and a purchase unlocks the rest.

19

The real problem with apps is the market is saturated. It has little to do with ad support. Supply dwarfs demand so prices are hyper competitive.

20

That’s only part of the reason, the other part is that a lot of people around the world now expect everything digital to be given to them for free. The act of simply pirating everything even has mainstream acceptance in some countries and as a result the piracy rate for a premium app. in those markets is nearly 100 percent.

The ad-based model is then used because it provides a proven way to still make revenue without the worry of piracy. The main issue with ad-supported models is not simply that it’s a thing, but that a lot of developers abuse it in ways such as throwing 2 minute commercial breaks at the player and popping up ads at random during gameplay to trick the player into clicking them. This misuse unfortunately taints the very idea of ad-supported models, so even those who use it in a smart and responsible manner suffer as well.