Research was conducted by the University of Bayreuth, Germany into the effectiveness of banner ads and free apps on iPhone applications. Access was given to all advertising and earnings data by Alamex Ltd for their iHi range of Apps.

Below is a summary of the research which will be published here in 2011.

Free Versions and Banner Ads - Good Choices for Promoting Mobile Applications?

Dipl.-Kffr. Tina Balke, Matthias von Entress (BA), Prof. Dr. Torsten Eymann
University of Bayreuth
Department of Information Systems Management
Universitaetsstr. 30
95447 Bayreuth
Germany
tina.balke@uni-bayreuth.de, torsten.eymann@uni-bayreuth.de, matthias.vonentress@gmx.de

As a result of the heavy competition in the mobile application domain, nowadays mobile application developers are not only forced to develop innovative and useful mobile applications but also have to implement a profound marketing strategy for their products to be competitive.

Based on McCarthy's "4P" marketing concept, this paper focuses on two aspect of product promotion. Using markeingdata of two applications for Apple mobile devices by Alamex Ltd., the benefits of banner ads and free software versions as marketing instruments are analyzed in a qualitative study. The study was conducted with the help of Apple's developer platform "iTunes Connect" as well as data of the mobile advertising company AdMob that were collected for a 3-month-period of time with special focus on Germany, the United Kingdom, France and Russia.

Based on the empirical evaluation of the data, we develop a theoretical basis for the interrelation and the mode of action of the two marketing instruments with regard to mobile applications. We present the results for each of the countries, highlight similarities and differences, and in general show that despite general positive effects of the two instruments, if not administered exactly, the costs can outweigh the overall benefits.