11: Ad-Funded Apps
  
   
 
 
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     Welcome to Under the Radar, a show about independent iOS app development. 
     
     
  
 
 
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     I'm Marco Arment. And I'm David Smith. Under the Radar is never longer than 
     
     
  
 
 
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     30 minutes, so let's get started. So this week we're going to talk a little bit about 
     
     
  
 
 
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     iAd and ad-driven app revenue models because 
     
     
  
 
 
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     there's some news this past week that iAd 
     
     
  
 
 
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     was shutting down part of its offerings and 
     
     
  
 
 
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     it's shutting down what's called the App Network. And a lot of people, it was a very confusing message and a lot 
     
     
  
 
 
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     of people kind of thought this was shutting down all of iAd, and it's kind of confusing 
     
     
  
 
 
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     as to what parts of iAd are left. And David, since you have a lot of experience with ad-funded 
     
     
  
 
 
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     apps, and I think most developers who most people hear from in podcasts and stuff don't 
     
     
  
 
 
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     have a lot of experience. Most developers in podcasts and who have blogs and stuff are 
     
     
  
 
 
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     trying to sell paid apps, or at least free apps with paid and app purchases. And I don't 
     
     
  
 
 
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     hear a lot of discussion from people who have much or any experience, especially significant 
     
     
  
 
 
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     experience with ad-driven revenue models and apps. And you do. So I'd love to hear a 
     
     
  
 
 
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     lot from you on this, with your experiences and your thoughts around what's going on 
     
     
  
 
 
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     with ads, what kind of led to this point, what the reality is of ad-funded app development 
     
     
  
 
 
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     today and then what this announcement really means and what it might mean for you. 
     
     
  
 
 
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     So I definitely wanted to dive into a little bit of first of like the background of where 
     
     
  
 
 
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     I'm coming from with ads. And so like whenever I think about revenue for an application, 
     
     
  
 
 
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     the first thing obviously is like you think about, "Well, how am I going to make money?" 
     
     
  
 
 
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     And you can really make money in three main ways. Like you can have an ongoing payment 
     
     
  
 
 
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     from somebody, you know, something like a subscription. You can get a one-time payment 
     
     
  
 
 
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     from your customer, which is the typical 
     
     
  
 
 
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     sort of like paid up front model. 
     
     
  
 
 
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     And then you'd have something where you get no payment 
     
     
  
 
 
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     from your customer. 
     
     
  
 
 
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     And so you're either then relying on advertising 
     
     
  
 
 
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     where someone else is paying you for that customer 
     
     
  
 
 
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     to use your application, or you have just no revenue at all, 
     
     
  
 
 
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     in which case you're probably, you know, 
     
     
  
 
 
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     you're going for some kind of market share play 
     
     
  
 
 
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     or something where direct revenue isn't important to you. 
     
     
  
 
 
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     And so why would you end up using advertising? 
     
     
  
 
 
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     an application that's going to have a lot of people and the majority of which who don't 
     
     
  
 
 
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     want to actually pay to use your application with money, which is a lot of applications, 
     
     
  
 
 
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     especially in the iOS app store. And so I've used advertising in almost all of my app, 
     
     
  
 
 
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     for almost the entire length of my history of being an app developer. One of my earliest 
     
     
  
 
 
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     apps, I even originally built my own app network and was just trying to do direct sales for 
     
     
  
 
 
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     it and that didn't really work in scale. And so I pretty quickly moved to I think back 
     
     
  
 
 
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     then this was probably in 2009 ish. It was probably AdMob, I think was the big one back 
     
     
  
 
 
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     then. Then at you know, I had was introduced in 2010. And so I jumped onto using that as 
     
     
  
 
 
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     quickly as I could. And I had always did pretty well for me, you know, so apples, it was Apple's 
     
     
  
 
 
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     platform, it was nice and integrated into the platform. And it did well, you know, I 
     
     
  
 
 
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     got pretty good fill rates, which is the amount of time that I ask for an ad that I actually 
     
     
  
 
 
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     get one back. For me, it was usually like three quarters to almost like 98%, I think, 
     
     
  
 
 
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     often for fill rates. I had pretty quality ads, good revenue, and I was overall generally 
     
     
  
 
 
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     pretty happy with it. Like, over time, the quality of iAd has certainly changed, but 
     
     
  
 
 
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     I think it's probably more in some ways a reflection on how the store has changed since 
     
     
  
 
 
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     like 2010, where now a lot of the ads are just for, you know, sort of like the Candy 
     
     
  
 
 
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     Crush Game of War kind of games, where it's all about trying to drive downloads for apps 
     
     
  
 
 
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     that are then used in-app purchase to get revenue from people. And so that's what 
     
     
  
 
 
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     most of my ads are for, which means, you know, they're not, it's not great. They're 
     
     
  
 
 
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     not awesome things. But at this point, like, apps or advertising probably makes somewhere 
     
     
  
 
 
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     between 40 to 45 percent of the revenue I get, and it's definitely the biggest source 
     
     
  
 
 
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     of revenue from my most important apps to me. And so that's kind of a weird place 
     
     
  
 
 
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     to find myself now that I find that iAd is going to be shutting down or closing or doing 
     
     
  
 
 
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     something dramatic in the next couple of, I think by June or so it'll be changing. 
     
     
  
 
 
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     And I don't think we know exactly what it's going to look like after that, but it's 
     
     
  
 
 
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     definitely going to be different. 
     
     
  
 
 
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     >>Steve - So I know that you talk about the fill rate, and I've heard various things. 
     
     
  
 
 
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     I've heard from people who aren't happy with iAds fill rate. 
     
     
  
 
 
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     Is it getting worse over time? 
     
     
  
 
 
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     >>Joe - It varies. 
     
     
  
 
 
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     And so this is one of those funny things with advertising. 
     
     
  
 
 
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     I've heard from some people who get, because it's all based, the ads that you get are always 
     
     
  
 
 
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     going to be based on the demographics of the people who use your app, and how they use 
     
     
  
 
 
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     it, and some kind of secret algorithm that is trying to pair people up. 
     
     
  
 
 
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     And so for my apps, for audiobooks and Podometer++, 
     
     
  
 
 
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     I've usually had pretty good fill rates. 
     
     
  
 
 
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     I wouldn't say they've gone down over time. 
     
     
  
 
 
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     Maybe some of the rates have gone down over time. 
     
     
  
 
 
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     But those are even really hard to track 
     
     
  
 
 
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     because they're so cyclical. 
     
     
  
 
 
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     Every January 1, my advertising rates drop by at least a half 
     
     
  
 
 
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     because everyone's advertising budgets were all spent up 
     
     
  
 
 
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     until then, and no one buys ads the first couple 
     
     
  
 
 
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     weeks of January. 
     
     
  
 
 
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     And so things cycle dramatically. 
     
     
  
 
 
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     But I would say iAd is, maybe it's gotten done down slightly. 
     
     
  
 
 
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     I think overall in the advertising market, 
     
     
  
 
 
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     I think in a lot of ways things are going down. 
     
     
  
 
 
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     And the weird thing to do then is 
     
     
  
 
 
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     start having to balance those. 
     
     
  
 
 
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     Like, what kind of ads are you even talking about? 
     
     
  
 
 
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     Most of my apps only do banner ads. 
     
     
  
 
 
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     You can also do interstitials and more aggressive forms 
     
     
  
 
 
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     of advertising that completely take over the application 
     
     
  
 
 
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     until you watch a 30-second video or those types of things, 
     
     
  
 
 
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     which obviously get better and better rates accordingly. 
     
     
  
 
 
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     - Right, but of course annoy people more and more. 
     
     
  
 
 
 
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     - I mean, that's always a tricky balance with advertising 
     
     
  
 
 
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     is like what works is being more intrusive 
     
     
  
 
 
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     and more annoying. 
     
     
  
 
 
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     And like you can, there are things that work 
     
     
  
 
 
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     that aren't intrusive and annoying, 
     
     
  
 
 
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     but there's always this constant tension, 
     
     
  
 
 
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     this pressure to make a little bit more 
     
     
  
 
 
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     or to combat some other kind of downturn 
     
     
  
 
 
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     by just making things a little bit more annoying 
     
     
  
 
 
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     or a little bit more creepy in data privacy issues 
     
     
  
 
 
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     things like that. There's always these pressures, and a lot of times people have to cave to 
     
     
  
 
 
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     those things in order to even survive, to have their businesses survive. It's a very 
     
     
  
 
 
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     tricky balance. And in some areas, like in podcasting right now, we are lucky that podcast 
     
     
  
 
 
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     advertising right now is still very high quality and that we're able to command great rates 
     
     
  
 
 
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     and have ads that aren't too annoying because of the nature of the medium and the market 
     
     
  
 
 
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     conditions right now. But apps, I think, are similar to the web in that it's very, very 
     
     
  
 
 
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     hard to get great ad rates for in-app ads. I mean, have you found that to be the case? 
     
     
  
 
 
 
 
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     There is money to be made there, but the volumes you need to make a living doing it is pretty 
     
     
  
 
 
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     substantial. 
     
     
  
 
 
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     This may be the better way to look at it, in much the same way as with the web or something, 
     
     
  
 
 
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     where, like you say, with a podcast, the number of listeners you have to have before you can 
     
     
  
 
 
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     have a non-substantial revenue coming from a podcast is dramatically less than the number 
     
     
  
 
 
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     of users you need for an application to have any kind of real tangible revenue. You're 
     
     
  
 
 
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     talking about probably tens if not hundreds of thousands of users a day of your application 
     
     
  
 
 
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     before you're going to be getting into something that you could really make a run at, which 
     
     
  
 
 
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     is -- and you have to keep doing it all the time. In some ways it's nice because advertising 
     
     
  
 
 
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     is based on people using your application. And so in some ways it's nice -- I've always 
     
     
  
 
 
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     said that I like that it aligns my people using the application with the revenue I get. 
     
     
  
 
 
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     So if I engage people more, if I make people really like the app and come back to it time 
     
     
  
 
 
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     and time again, my revenue goes up, which is nice. But it still always creates all these 
     
     
  
 
 
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     weird tensions for like, "Well, what if there was another way that I could get people 
     
     
  
 
 
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     back into the application? What if I sent them a push notification that said, 'Hey, 
     
     
  
 
 
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     you haven't checked your steps in a while. Maybe you should.'" 
     
     
  
 
 
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     "You've earned a new step bomb!" 
     
     
  
 
 
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     Yeah, like, there's so many things that you start to get into that cross all kinds 
     
     
  
 
 
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     of lines that, like, it's a really—it forces you to really be thoughtful in a way 
     
     
  
 
 
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     that is a bit weird. 
     
     
  
 
 
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     Sometimes I like just the paid app, the paid model, which is nice because it's simple. 
     
     
  
 
 
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     Like, in some ways I can just be lazy about it and be like, "Well, they gave me money, 
     
     
  
 
 
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     I gave them app." 
     
     
  
 
 
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     Like, that's great. 
     
     
  
 
 
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     That's nice and simple versus all having to really think about, like, "Does this 
     
     
  
 
 
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     cross the line? Is this too aggressive? Is this too annoying? Is this going to work in 
     
     
  
 
 
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     a way that is going to ruin my reputation? But it could make me more money, but really 
     
     
  
 
 
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     make the app not so good to use? It's some really hard questions that things like advertising 
     
     
  
 
 
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     force you to face up to. 
     
     
  
 
 
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     >> Enoch: Well, and I think among the Apple enthusiast community, I think ads and apps 
     
     
  
 
 
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     for taboo. You don't see people panic making apps with ads in them. The idea of the high-end 
     
     
  
 
 
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     indie craft app scene, almost nobody in that scene uses ads in any apps that people have 
     
     
  
 
 
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     actually heard of and use. Some people will have a secret app on the side. Like I've 
     
     
  
 
 
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     heard David Barnard at App Cub, he always talks about he has this mirror app, and that's 
     
     
  
 
 
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     he experiments with revenue model stuff and they have ads in that, that's fine. But you 
     
     
  
 
 
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     don't see Tweetbot 5 free with ads or pay to unlock them. You hardly ever see ads in 
     
     
  
 
 
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     that kind of high-end app development community. And I think ultimately, I think that's temporary. 
     
     
  
 
 
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     I think we will get to a point where ads start moving in just because the other revenue models 
     
     
  
 
 
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     are getting so much harder. You know, because as you said, that's a really good point that 
     
     
  
 
 
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     It does make sense for apps that are used frequently. 
     
     
  
 
 
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     If you have some kind of quick utility app that is hardly ever used, the kind of thing 
     
     
  
 
 
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     you keep on your phone for occasional use, or maybe if you're traveling, something like 
     
     
  
 
 
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     that, or maybe it's a special kind of unit converter that you only need four times a 
     
     
  
 
 
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     year but you're really glad it's there. 
     
     
  
 
 
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     In those kind of instances, ad-funded apps probably don't make a lot of sense, but if 
     
     
  
 
 
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     If it's something like a news reader, where you're going into that every single day, 
     
     
  
 
 
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     and spending meaningful time in it, then I think that makes a lot of sense. 
     
     
  
 
 
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     Is it possible for ads in frequently used apps in an environment where there's a lot 
     
     
  
 
 
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     of pressure to keep the upfront price down, like the App Store, might ads make more money 
     
     
  
 
 
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     for daily use apps than a paid upfront model could? 
     
     
  
 
 
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     - I think probably. 
     
     
  
 
 
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     I mean, honestly, that's why I do, 
     
     
  
 
 
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     like why I have ads in so many of my applications. 
     
     
  
 
 
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     It's because that is a way to make more money, 
     
     
  
 
 
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     probably, than I would from paid apps. 
     
     
  
 
 
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     And for, I mean, it's a bit, 
     
     
  
 
 
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     I haven't done too many of these now 
     
     
  
 
 
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     because most of my apps, I just, 
     
     
  
 
 
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     my default is that the app will be free 
     
     
  
 
 
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     with some other form of revenue, 
     
     
  
 
 
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     whether it's an in-app purchase or ads, or probably both. 
     
     
  
 
 
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     But back in the day, I used to do the kind of, well, you'd have the like ad version 
     
     
  
 
 
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     that was free and the paid version that was, you know, that you'd charge for. 
     
     
  
 
 
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     And it was like, people could choose, like, do you want the ad free or the other one? 
     
     
  
 
 
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     And there was a time when they sort of gave each other a run for their money, but I don't 
     
     
  
 
 
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     know, probably for the least the last three or four years, it's been almost entirely 
     
     
  
 
 
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     in the free. 
     
     
  
 
 
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     Like, and I know this is my own behavior, like that's in some ways the expectation 
     
     
  
 
 
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     apps in the App Store now is that they're going to be free to download, and there may 
     
     
  
 
 
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     be some other things that are either advertising or an in-app purchase later, but if it's 
     
     
  
 
 
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     not free, there's a massive wall, and it feels like the wall is getting bigger and 
     
     
  
 
 
 
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     And so if your goal is to make a living from an app, there's a very good chance that 
     
     
  
 
 
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     advertising will need to be something that you at least strongly consider, if not implement 
     
     
  
 
 
	 00:12:31
     ◼
      
     ► 
     and use in your application. 
     
     
  
 
 
	 00:12:34
     ◼
      
     ► 
     Speaking of which, we are brought to you this week, 
     
     
  
 
 
 
	 00:12:37
     ◼
      
     ► 
     I'm just trying to figure out when to insert this. 
     
     
  
 
 
	 00:12:39
     ◼
      
     ► 
     We're brought to you this week by our friends at Igloo. 
     
     
  
 
 
	 00:12:42
     ◼
      
     ► 
     Because they are Canadian and they're named after 
     
     
  
 
 
	 00:12:43
     ◼
      
     ► 
     something cold, they are not afraid to advertise in January. 
     
     
  
 
 
	 00:12:46
     ◼
      
     ► 
     Igloo is the internet you will actually like. 
     
     
  
 
 
	 00:12:49
     ◼
      
     ► 
     With Igloo, you don't have to be stuck at your desk 
     
     
  
 
 
	 00:12:51
     ◼
      
     ► 
     to do your work. 
     
     
  
 
 
	 00:12:52
     ◼
      
     ► 
     You can manage your task list from your laptop 
     
     
  
 
 
	 00:12:54
     ◼
      
     ► 
     during a meeting, share status updates from your phone 
     
     
  
 
 
	 00:12:56
     ◼
      
     ► 
     as you're leaving a client's site, 
     
     
  
 
 
	 00:12:58
     ◼
      
     ► 
     and access the latest version of a file from home. 
     
     
  
 
 
	 00:13:00
     ◼
      
     ► 
     You can even do this in your pajamas or with no pants. 
     
     
  
 
 
	 00:13:02
     ◼
      
     ► 
     Nobody will ever know. 
     
     
  
 
 
	 00:13:03
     ◼
      
     ► 
     These days, everything is mobile. 
     
     
  
 
 
	 00:13:05
     ◼
      
     ► 
     Your work should be too. 
     
     
  
 
 
	 00:13:06
     ◼
      
     ► 
     Now, if you ever have looked at a corporate intranet, 
     
     
  
 
 
	 00:13:09
     ◼
      
     ► 
     you've probably thought something like, 
     
     
  
 
 
	 00:13:10
     ◼
      
     ► 
     whoever designed this must truly hate me. 
     
     
  
 
 
	 00:13:13
     ◼
      
     ► 
     Well, those days are over. 
     
     
  
 
 
	 00:13:15
     ◼
      
     ► 
     Igloo allows you to make your intranet 
     
     
  
 
 
	 00:13:16
     ◼
      
     ► 
     feel like a place you actually want to be. 
     
     
  
 
 
	 00:13:18
     ◼
      
     ► 
     It's surprisingly configurable, 
     
     
  
 
 
	 00:13:20
     ◼
      
     ► 
     and you can completely rebrand it 
     
     
  
 
 
	 00:13:21
     ◼
      
     ► 
     to give it the look and feel of your team. 
     
     
  
 
 
	 00:13:23
     ◼
      
     ► 
     Thanks to group spaces, role-based access permissions, 
     
     
  
 
 
	 00:13:26
     ◼
      
     ► 
     and easy to use drag and drop widget editor, 
     
     
  
 
 
	 00:13:28
     ◼
      
     ► 
     you can reorganize the whole platform 
     
     
  
 
 
	 00:13:30
     ◼
      
     ► 
     to fit exactly how your teams work. 
     
     
  
 
 
	 00:13:32
     ◼
      
     ► 
     With our mobile lives, people are increasingly bringing in outside apps into companies, and 
     
     
  
 
 
	 00:13:35
     ◼
      
     ► 
     sensitive documents are getting scattered across different platforms. 
     
     
  
 
 
	 00:13:39
     ◼
      
     ► 
     This can cause some big problems, but not if you use Igloo. 
     
     
  
 
 
	 00:13:42
     ◼
      
     ► 
     Igloo allows you to integrate services like Box, Google Drive, and Dropbox into one big, 
     
     
  
 
 
	 00:13:46
     ◼
      
     ► 
     easy-to-secure platform. 
     
     
  
 
 
	 00:13:48
     ◼
      
     ► 
     If you know terms like 256-bit encryption, single sign-on, and Active Directory integrations, 
     
     
  
 
 
	 00:13:53
     ◼
      
     ► 
     then you'll know just how safe and secure Igloo is. 
     
     
  
 
 
	 00:13:56
     ◼
      
     ► 
     You can share files with your coworkers. 
     
     
  
 
 
	 00:13:58
     ◼
      
     ► 
     You can all collaborate. 
     
     
  
 
 
	 00:13:59
     ◼
      
     ► 
     You can track who's read them with read receipts. 
     
     
  
 
 
	 00:14:02
     ◼
      
     ► 
     Go and sign up for igloo right now. 
     
     
  
 
 
	 00:14:04
     ◼
      
     ► 
     You can try igloo for free. 
     
     
  
 
 
	 00:14:06
     ◼
      
     ► 
     And for any team with up to 10 people, it's free forever. 
     
     
  
 
 
	 00:14:08
     ◼
      
     ► 
     So check it out today, igloosoftware.com/radar. 
     
     
  
 
 
	 00:14:12
     ◼
      
     ► 
     That's igloosoftware.com/radar 
     
     
  
 
 
	 00:14:14
     ◼
      
     ► 
     for the internet you will actually like. 
     
     
  
 
 
	 00:14:16
     ◼
      
     ► 
     Thank you so much to igloo for supporting 
     
     
  
 
 
	 00:14:18
     ◼
      
     ► 
     Under the Radar and all of Relay FM. 
     
     
  
 
 
	 00:14:20
     ◼
      
     ► 
     So getting back to iAd, what was the announcement? 
     
     
  
 
 
	 00:14:24
     ◼
      
     ► 
     So the announcement said that they were showing 
     
     
  
 
 
	 00:14:25
     ◼
      
     ► 
     down the app network. 
     
     
  
 
 
	 00:14:27
     ◼
      
     ► 
     Can you go into what that was and what's left? 
     
     
  
 
 
	 00:14:30
     ◼
      
     ► 
     - This is all very ambiguous. 
     
     
  
 
 
	 00:14:32
     ◼
      
     ► 
     And as somebody who, like I said, 
     
     
  
 
 
	 00:14:34
     ◼
      
     ► 
     makes a very substantial amount of my revenue from IAD, 
     
     
  
 
 
	 00:14:36
     ◼
      
     ► 
     I've tried my best to understand this, 
     
     
  
 
 
	 00:14:39
     ◼
      
     ► 
     be it both from the official announcement they made 
     
     
  
 
 
	 00:14:41
     ◼
      
     ► 
     and the various bits of rumors or leaks or other things 
     
     
  
 
 
	 00:14:45
     ◼
      
     ► 
     that sort of-- 
     
     
  
 
 
	 00:14:46
     ◼
      
     ► 
     like, before Apple actually made their official announcement, 
     
     
  
 
 
	 00:14:48
     ◼
      
     ► 
     there was a bunch of articles from all over the place, 
     
     
  
 
 
	 00:14:50
     ◼
      
     ► 
     people kind of talking about that Apple was going to be 
     
     
  
 
 
	 00:14:53
     ◼
      
     ► 
     scaling down their sales team, and they were going 
     
     
  
 
 
	 00:14:55
     ◼
      
     ► 
     to be changing things around. 
     
     
  
 
 
	 00:14:57
     ◼
      
     ► 
     So they specifically said that the IAD app network 
     
     
  
 
 
	 00:15:00
     ◼
      
     ► 
     be discontinued as of June 30th of this year. Although we are no longer accepting new ads 
     
     
  
 
 
	 00:15:05
     ◼
      
     ► 
     into the apps into the network, advertising campaigns will continue to run and be still 
     
     
  
 
 
	 00:15:10
     ◼
      
     ► 
     earning advertising revenue until June 30th. As best I understand, like the iAd app network 
     
     
  
 
 
	 00:15:16
     ◼
      
     ► 
     is one of, it's a term I was, I spent the last like couple of days trying to find a definition 
     
     
  
 
 
	 00:15:22
     ◼
      
     ► 
     for what that actually means, and I haven't found any. Like, it's, it's the exact, like, 
     
     
  
 
 
	 00:15:27
     ◼
      
     ► 
     Like it could be that the app network is the part of iAd right now that you use to... 
     
     
  
 
 
	 00:15:34
     ◼
      
     ► 
     If I wanted to promote my app, I could make an ad for Podometer++, I could put it into 
     
     
  
 
 
	 00:15:38
     ◼
      
     ► 
     iAd, and then other apps that are showing iAds would be then promoting it for me, and 
     
     
  
 
 
	 00:15:45
     ◼
      
     ► 
     I'd pay for that. 
     
     
  
 
 
	 00:15:46
     ◼
      
     ► 
     It could be that. 
     
     
  
 
 
	 00:15:47
     ◼
      
     ► 
     I think it's also possible that it's the whole way that which ads are being collected and 
     
     
  
 
 
	 00:15:52
     ◼
      
     ► 
     aggregated right now, both from that and then from the original thing. 
     
     
  
 
 
	 00:15:56
     ◼
      
     ► 
     Back in 2010, when IAD was first launched, it was supposed to be about big brands. 
     
     
  
 
 
	 00:16:00
     ◼
      
     ► 
     There was Steve Jobs up on the stage talking about how they were going to partner with 
     
     
  
 
 
	 00:16:04
     ◼
      
     ► 
     all these big brands to make these really emotional experiences and to raise and elevate 
     
     
  
 
 
 
	 00:16:11
     ◼
      
     ► 
     That lasted like a month? 
     
     
  
 
 
	 00:16:12
     ◼
      
     ► 
     Well, it didn't last very long. 
     
     
  
 
 
	 00:16:15
     ◼
      
     ► 
     That's probably fair to say. 
     
     
  
 
 
	 00:16:16
     ◼
      
     ► 
     I remember there was a Nissan Leaf had one. 
     
     
  
 
 
	 00:16:20
     ◼
      
     ► 
     There were a couple of big brands that had them, but it just didn't seem— 
     
     
  
 
 
	 00:16:22
     ◼
      
     ► 
     I think it might have literally only been a couple. 
     
     
  
 
 
 
	 00:16:26
     ◼
      
     ► 
     And that never really went anywhere, and so I don't think it's that. 
     
     
  
 
 
	 00:16:27
     ◼
      
     ► 
     But it seems like the IAD as we know it now is going to be going away. 
     
     
  
 
 
	 00:16:33
     ◼
      
     ► 
     From other, not necessarily from Apple's direct announcements, but from some of the other 
     
     
  
 
 
	 00:16:37
     ◼
      
     ► 
     leaks, it sounds like there will continue to be an IAD framework in iOS. 
     
     
  
 
 
	 00:16:44
     ◼
      
     ► 
     I'm not completely sure on that. 
     
     
  
 
 
	 00:16:46
     ◼
      
     ► 
     Like it's possible in iOS 10 that it's just going to go away. 
     
     
  
 
 
	 00:16:49
     ◼
      
     ► 
     That would seem a little weird, but it's possible. 
     
     
  
 
 
	 00:16:51
     ◼
      
     ► 
     And it may be replaced by something more algorithmic or straightforward, or it's entirely possible 
     
     
  
 
 
	 00:16:56
     ◼
      
     ► 
     that Apple is just going to sort of back away from this whole thing. 
     
     
  
 
 
	 00:17:00
     ◼
      
     ► 
     I mean, I think the reality, though, is either way, whatever is going to happen, as of June 
     
     
  
 
 
	 00:17:04
     ◼
      
     ► 
     30, the revenue models that are based, like my own, on, you know, substantially on IAD 
     
     
  
 
 
	 00:17:09
     ◼
      
     ► 
     are likely going to need to be prepared for a change. 
     
     
  
 
 
	 00:17:14
     ◼
      
     ► 
     Exactly what that looks like. 
     
     
  
 
 
	 00:17:15
     ◼
      
     ► 
     I'm still honestly working out for myself. 
     
     
  
 
 
	 00:17:17
     ◼
      
     ► 
     But whatever we're doing, whatever it is, it's likely not going to be as performant 
     
     
  
 
 
	 00:17:21
     ◼
      
     ► 
     in terms of revenue, or from a fill rate perspective, and all these things, as the major thing they're 
     
     
  
 
 
	 00:17:26
     ◼
      
     ► 
     doing now. Because it definitely doesn't sound like they're just like, "Oh, we're taking 
     
     
  
 
 
	 00:17:30
     ◼
      
     ► 
     what we have and going in a different direction." There's definitely like, "We're discontinuing 
     
     
  
 
 
	 00:17:33
     ◼
      
     ► 
     a large swath of this and going to be potentially replacing it with something, or maybe not 
     
     
  
 
 
	 00:17:38
     ◼
      
     ► 
     at all." But it's definitely a big, massive change if you use iAd coming in June, presumably 
     
     
  
 
 
	 00:17:47
     ◼
      
     ► 
     right after WWDC maybe, like, 
     
     
  
 
 
	 00:17:49
     ◼
      
     ► 
     will I have, they'll announce, 
     
     
  
 
 
	 00:17:50
     ◼
      
     ► 
     or during WWDC they'll announce what's gonna replace it 
     
     
  
 
 
	 00:17:52
     ◼
      
     ► 
     or what we need to do, which will be a little short notice, 
     
     
  
 
 
	 00:17:55
     ◼
      
     ► 
     but something's definitely coming. 
     
     
  
 
 
	 00:17:58
     ◼
      
     ► 
     - Yeah, I mean, it's interesting, 
     
     
  
 
 
	 00:17:59
     ◼
      
     ► 
     like, if you think back about, like, 
     
     
  
 
 
	 00:18:00
     ◼
      
     ► 
     why iAd was created in the first place, 
     
     
  
 
 
	 00:18:03
     ◼
      
     ► 
     it was to basically, like, Apple saw 
     
     
  
 
 
	 00:18:05
     ◼
      
     ► 
     that ad networks on mobile were becoming a thing, 
     
     
  
 
 
	 00:18:08
     ◼
      
     ► 
     ad-funded apps were likely to become, you know, 
     
     
  
 
 
	 00:18:09
     ◼
      
     ► 
     a big revenue stream, and there were all these 
     
     
  
 
 
	 00:18:13
     ◼
      
     ► 
     kind of creepy ad companies coming in 
     
     
  
 
 
	 00:18:15
     ◼
      
     ► 
     trying to make these kind of crappy ad embeds for apps. So I imagine the reason iAd exists 
     
     
  
 
 
	 00:18:22
     ◼
      
     ► 
     is because Apple—you know, Steve said it right on stage. He said in that announcement 
     
     
  
 
 
	 00:18:25
     ◼
      
     ► 
     that these things frankly suck and that we think we can do better. And Apple wanted—they 
     
     
  
 
 
	 00:18:32
     ◼
      
     ► 
     wanted control over this monetization method for themselves. But it didn't really play 
     
     
  
 
 
	 00:18:36
     ◼
      
     ► 
     out that way. What has played out is, turns out, Apple is not a very good ad company. 
     
     
  
 
 
	 00:18:41
     ◼
      
     ► 
     It just seems like it's not the kind of thing Apple is good at, especially with all 
     
     
  
 
 
	 00:18:45
     ◼
      
     ► 
     stances on privacy and everything else, it just seems like running a big ad network kind 
     
     
  
 
 
	 00:18:50
     ◼
      
     ► 
     of conflicts with what they do. But maybe it's the lesser of two evils because if they 
     
     
  
 
 
	 00:18:57
     ◼
      
     ► 
     don't run the ad network, then the third party ad networks are the only choice for developers 
     
     
  
 
 
	 00:19:02
     ◼
      
     ► 
     who have ad supported apps, rather than just being a backup choice. So I wonder, when I 
     
     
  
 
 
	 00:19:11
     ◼
      
     ► 
     When I first heard the app network was being shut down, 
     
     
  
 
 
	 00:19:14
     ◼
      
     ► 
     I thought they meant those little templates 
     
     
  
 
 
	 00:19:16
     ◼
      
     ► 
     developers could use to just make their, 
     
     
  
 
 
	 00:19:18
     ◼
      
     ► 
     rather than having the whole interactive experience, 
     
     
  
 
 
	 00:19:20
     ◼
      
     ► 
     it was like this template that you, 
     
     
  
 
 
	 00:19:21
     ◼
      
     ► 
     as any developer could sign up, 
     
     
  
 
 
	 00:19:23
     ◼
      
     ► 
     and you'd basically get like an image, 
     
     
  
 
 
	 00:19:24
     ◼
      
     ► 
     and if it was tapped, it would show 
     
     
  
 
 
	 00:19:26
     ◼
      
     ► 
     like a little app store slide up sheet. 
     
     
  
 
 
	 00:19:28
     ◼
      
     ► 
     So you wouldn't have to really do any custom programming. 
     
     
  
 
 
	 00:19:30
     ◼
      
     ► 
     There wouldn't be any custom interactivity. 
     
     
  
 
 
	 00:19:32
     ◼
      
     ► 
     It would just be a banner image for your app, 
     
     
  
 
 
	 00:19:34
     ◼
      
     ► 
     and people tap it, and it shows the app store page. 
     
     
  
 
 
	 00:19:37
     ◼
      
     ► 
     And I actually, did you ever pay for those? 
     
     
  
 
 
	 00:19:39
     ◼
      
     ► 
     Did you ever buy those before? 
     
     
  
 
 
	 00:19:41
     ◼
      
     ► 
     I've tried them. 
     
     
  
 
 
	 00:19:42
     ◼
      
     ► 
     They never worked for me. 
     
     
  
 
 
	 00:19:43
     ◼
      
     ► 
     I mean, I think they only work for an application that you are going-- if you are really going-- 
     
     
  
 
 
	 00:19:49
     ◼
      
     ► 
     if the value of each customer to you is quite a lot, which I imagine if you're one of these 
     
     
  
 
 
	 00:19:55
     ◼
      
     ► 
     free-to-play-game kind of things, you can probably get to there, where if you're paying 
     
     
  
 
 
	 00:19:58
     ◼
      
     ► 
     a few dollars to acquire a new user, that's actually worthwhile to you overall, because 
     
     
  
 
 
	 00:20:04
     ◼
      
     ► 
     the average value of a customer is bigger than that. 
     
     
  
 
 
	 00:20:07
     ◼
      
     ► 
     But for me, it never made sense. 
     
     
  
 
 
	 00:20:09
     ◼
      
     ► 
     for my paid applications. There's my average, like the amount of money I typically would 
     
     
  
 
 
	 00:20:13
     ◼
      
     ► 
     get from somebody is just so low in comparison that it just never made sense. 
     
     
  
 
 
 
	 00:20:18
     ◼
      
     ► 
     Yeah, that's too bad. So it could be that they're shutting that down because the economics 
     
     
  
 
 
	 00:20:23
     ◼
      
     ► 
     have just made it not that effective for most developers. Or it could be that the app network 
     
     
  
 
 
	 00:20:28
     ◼
      
     ► 
     might mean running all iAds in people's apps, in which case they would just--because 
     
     
  
 
 
	 00:20:33
     ◼
      
     ► 
     like the new Apple News app still uses iAd. And so maybe they're saying everything else 
     
     
  
 
 
	 00:20:40
     ◼
      
     ► 
     about iAd is being shut down except for the ones running in Apple's own apps. Or maybe 
     
     
  
 
 
	 00:20:44
     ◼
      
     ► 
     they're saying only those special little developer template ones are getting shut down. Who knows? 
     
     
  
 
 
	 00:20:49
     ◼
      
     ► 
     But assuming it's the former, that nobody will be able to use iAd in their apps anymore, 
     
     
  
 
 
	 00:20:55
     ◼
      
     ► 
     which would be the part that you're thinking would probably be the worst case scenario 
     
     
  
 
 
	 00:20:59
     ◼
      
     ► 
     here, where would you go, what would you do next? Are there third-party options that are 
     
     
  
 
 
	 00:21:04
     ◼
      
     ► 
     any good? Is there any kind of clear winner? What is the landscape like, as far as you 
     
     
  
 
 
 
	 00:21:11
     ◼
      
     ► 
     So this is the part that makes me really sad with this news. 
     
     
  
 
 
	 00:21:16
     ◼
      
     ► 
     And I totally understand. 
     
     
  
 
 
	 00:21:18
     ◼
      
     ► 
     It's always been a bit of an odd thing for Apple 
     
     
  
 
 
	 00:21:20
     ◼
      
     ► 
     to be in the advertising business, 
     
     
  
 
 
	 00:21:22
     ◼
      
     ► 
     because so much of what they do is completely 
     
     
  
 
 
	 00:21:24
     ◼
      
     ► 
     orthogonal to that. 
     
     
  
 
 
	 00:21:25
     ◼
      
     ► 
     They're not-- in general, they're 
     
     
  
 
 
	 00:21:27
     ◼
      
     ► 
     all about having really strong privacy 
     
     
  
 
 
	 00:21:29
     ◼
      
     ► 
     and having all kinds of things like that that are all about, 
     
     
  
 
 
	 00:21:32
     ◼
      
     ► 
     we want to know what's least about you, 
     
     
  
 
 
	 00:21:34
     ◼
      
     ► 
     and we're going to give you a premium experience, which is 
     
     
  
 
 
	 00:21:36
     ◼
      
     ► 
     typically not the advertising model. 
     
     
  
 
 
	 00:21:39
     ◼
      
     ► 
     And so what I've always liked is that, hey, they 
     
     
  
 
 
	 00:21:41
     ◼
      
     ► 
     have this advertising network, and so I don't actually do any backfilling in any of my apps. 
     
     
  
 
 
	 00:21:49
     ◼
      
     ► 
     I don't do the thing where it's like, even though I don't get 100% fill, I'm okay with 
     
     
  
 
 
	 00:21:54
     ◼
      
     ► 
     that, because I'm like, "You know what? iAds are good," and I've never seen an iAd in my 
     
     
  
 
 
	 00:21:57
     ◼
      
     ► 
     application that made me feel really uncomfortable. I don't feel great about some of them, but 
     
     
  
 
 
	 00:22:05
     ◼
      
     ► 
     if you just open the floodgates to every ad ever, we all kind of know where that goes. 
     
     
  
 
 
	 00:22:11
     ◼
      
     ► 
     look at the web right now, the kind of ads that you start to see at the bottom of like, 
     
     
  
 
 
	 00:22:15
     ◼
      
     ► 
     "Hey, if you like this story, you may also like these other stories about horrible things." 
     
     
  
 
 
	 00:22:19
     ◼
      
     ► 
     Right. Or just total scams. 
     
     
  
 
 
	 00:22:21
     ◼
      
     ► 
     Yeah. It's terrible. And that's where, ultimately, I imagine a lot of advertising 
     
     
  
 
 
	 00:22:26
     ◼
      
     ► 
     will go in apps as well. And I like that. At least I felt like Apple with iAd was like 
     
     
  
 
 
	 00:22:31
     ◼
      
     ► 
     a firewall against that. And I could say, "Okay, maybe I'm making a bit less money 
     
     
  
 
 
	 00:22:37
     ◼
      
     ► 
     doing this, but I feel confident that what I'm going to end up with isn't terrible and 
     
     
  
 
 
	 00:22:41
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     make me feel squirm and I'm going to get screenshots from people being like, "Look at the ad that 
     
     
  
 
 
	 00:22:45
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     your app was showing me," and for some awful thing. 
     
     
  
 
 
	 00:22:49
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     ► 
     So where I'm going now is kind of a weird and open question. 
     
     
  
 
 
	 00:22:52
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     There are so many ad networks that it's kind of crazy, and a lot of them have really complicated 
     
     
  
 
 
	 00:23:01
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     or confusing names. 
     
     
  
 
 
	 00:23:03
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     We have AdMob, AdColony, AdFalcon, AdRally, ModFox, TapIt, Vidobia, Vungle, TapJump. 
     
     
  
 
 
	 00:23:12
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     Are these real? 
     
     
  
 
 
	 00:23:13
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     These are actual ones that I was recently just like, I was quickly before we were preparing, 
     
     
  
 
 
	 00:23:16
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     ► 
     I was like pulling in these names and I'm like, "Those are some ad networks that exist 
     
     
  
 
 
 
	 00:23:20
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     Sounds like parody names. 
     
     
  
 
 
	 00:23:22
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     Yeah, but like that's what we have and there's dozens of them. 
     
     
  
 
 
	 00:23:25
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     And I mean, I imagine the biggest ones like AdMob is probably one of the bigger ones because 
     
     
  
 
 
	 00:23:28
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     it's run by Google, who is obviously like one of the biggest advertising companies in 
     
     
  
 
 
	 00:23:32
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     in the world, if not the biggest. 
     
     
  
 
 
	 00:23:33
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     I'm sure Apple loves that. 
     
     
  
 
 
	 00:23:36
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     I think you can do some things with Facebook. 
     
     
  
 
 
	 00:23:38
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     There's a few others that are kind of big. 
     
     
  
 
 
	 00:23:40
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     ► 
     But what I'm going to be facing now 
     
     
  
 
 
	 00:23:42
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     ► 
     is this weird question of, well, do I just pick another one 
     
     
  
 
 
	 00:23:45
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     ► 
     and hope for the best? 
     
     
  
 
 
	 00:23:47
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     ► 
     Do I use kind of an aggregator, which 
     
     
  
 
 
	 00:23:49
     ◼
      
     ► 
     is a way a lot of people do this type of thing, 
     
     
  
 
 
	 00:23:51
     ◼
      
     ► 
     where you'll download this big, massive blob 
     
     
  
 
 
	 00:23:55
     ◼
      
     ► 
     of third-party code. 
     
     
  
 
 
	 00:23:57
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     ► 
     You'll shove it into your application. 
     
     
  
 
 
	 00:23:58
     ◼
      
     ► 
     And it includes all the SDKs for dozens of different advertising 
     
     
  
 
 
 
	 00:24:04
     ◼
      
     ► 
     And you'll sign up for all of them. 
     
     
  
 
 
	 00:24:05
     ◼
      
     ► 
     And you'll be bidding back and forth between them 
     
     
  
 
 
	 00:24:08
     ◼
      
     ► 
     so that whoever has the best ad for you right now, you'll show. 
     
     
  
 
 
	 00:24:11
     ◼
      
     ► 
     And you'll switch between them dynamically. 
     
     
  
 
 
	 00:24:14
     ◼
      
     ► 
     But the more you do that, the less control 
     
     
  
 
 
	 00:24:16
     ◼
      
     ► 
     you ultimately have on what you're showing in your app. 
     
     
  
 
 
	 00:24:20
     ◼
      
     ► 
     And also, the thing that always makes me nervous is now, 
     
     
  
 
 
	 00:24:23
     ◼
      
     ► 
     the more third-party code I have to put in my application, 
     
     
  
 
 
	 00:24:26
     ◼
      
     ► 
     That's really scary, both from customer privacy concerns and things. 
     
     
  
 
 
	 00:24:31
     ◼
      
     ► 
     They could be doing all kinds of things in my applications that I maybe wouldn't really 
     
     
  
 
 
 
	 00:24:37
     ◼
      
     ► 
     It's like, for all I know, they're going to be popping up all kinds of permission requests 
     
     
  
 
 
	 00:24:42
     ◼
      
     ► 
     in my application that my customers assume are me asking for it, rather than them. 
     
     
  
 
 
	 00:24:47
     ◼
      
     ► 
     That's something that they could entirely do, because I'm running their code that 
     
     
  
 
 
	 00:24:52
     ◼
      
     ► 
     I probably can't see the source of. 
     
     
  
 
 
	 00:24:54
     ◼
      
     ► 
     - Yeah, not to mention making network requests 
     
     
  
 
 
	 00:24:56
     ◼
      
     ► 
     or anything like that, or even just any kind of use 
     
     
  
 
 
	 00:25:01
     ◼
      
     ► 
     of private APIs, if they get in trouble for that, 
     
     
  
 
 
	 00:25:03
     ◼
      
     ► 
     then really you're getting in trouble for that. 
     
     
  
 
 
	 00:25:05
     ◼
      
     ► 
     It's a huge risk. 
     
     
  
 
 
	 00:25:07
     ◼
      
     ► 
     - Yeah, and I love that IAD, at least, 
     
     
  
 
 
	 00:25:08
     ◼
      
     ► 
     it was a system framework. 
     
     
  
 
 
	 00:25:10
     ◼
      
     ► 
     It shipped in the OS. 
     
     
  
 
 
	 00:25:11
     ◼
      
     ► 
     I had to bundle nothing. 
     
     
  
 
 
	 00:25:12
     ◼
      
     ► 
     It was just, in the same way, it's just like me including 
     
     
  
 
 
	 00:25:15
     ◼
      
     ► 
     using HealthKit in my application or using AV Foundation. 
     
     
  
 
 
	 00:25:19
     ◼
      
     ► 
     Using IAD was just a thing. 
     
     
  
 
 
	 00:25:21
     ◼
      
     ► 
     And if I'm not gonna be able to do that, 
     
     
  
 
 
	 00:25:23
     ◼
      
     ► 
     at some point I'm going to have to include some code that I don't really want to include, 
     
     
  
 
 
	 00:25:29
     ◼
      
     ► 
     or I have to decide that, you know what, I'm just going to have to radically change my 
     
     
  
 
 
	 00:25:33
     ◼
      
     ► 
     business and move away from this. Because there's ultimately, like, there's going 
     
     
  
 
 
	 00:25:38
     ◼
      
     ► 
     to be some kind of a line that I have to find between, like, how comfortable am I with, 
     
     
  
 
 
	 00:25:43
     ◼
      
     ► 
     you know, whoever they are. And I'm sure if I talk to the salesman at these various 
     
     
  
 
 
	 00:25:47
     ◼
      
     ► 
     companies, I'm sure they'll all be, "Oh no, we take privacy very seriously, it's 
     
     
  
 
 
	 00:25:50
     ◼
      
     ► 
     It's very important to us. 
     
     
  
 
 
	 00:25:51
     ◼
      
     ► 
     But like, I felt comfortable when Apple did that, but there's very few companies that 
     
     
  
 
 
	 00:25:57
     ◼
      
     ► 
     I would feel comfortable about that. 
     
     
  
 
 
	 00:25:59
     ◼
      
     ► 
     And ultimately, I'll probably, like my gut says, I'll end up, at least initially, planning 
     
     
  
 
 
	 00:26:04
     ◼
      
     ► 
     to go to something like Google, if not—not because I think Google's a not creepy company, 
     
     
  
 
 
	 00:26:09
     ◼
      
     ► 
     but at least they're a big enough company that if they were doing something truly dubious, 
     
     
  
 
 
	 00:26:15
     ◼
      
     ► 
     like it would be well known and they would probably be held more accountable to it than 
     
     
  
 
 
	 00:26:19
     ◼
      
     ► 
     like some kind of fly-by-night VC-funded thing that just sort of appeared one day, and I 
     
     
  
 
 
	 00:26:24
     ◼
      
     ► 
     was like, "Oh, we have great rates and awesome ads. Maybe you do, but you don't have a lot 
     
     
  
 
 
	 00:26:30
     ◼
      
     ► 
     of history there in a way that I'm less worried." If Google's being really sketchy, at least 
     
     
  
 
 
	 00:26:35
     ◼
      
     ► 
     I met people who were going to know that and hold them accountable to that, at least somewhat. 
     
     
  
 
 
	 00:26:42
     ◼
      
     ► 
     But I don't know. It's really something that I'm kind of struggling with right now, is 
     
     
  
 
 
	 00:26:46
     ◼
      
     ► 
     exactly where I'm going to go, because if I had truly did just go away and just disappeared 
     
     
  
 
 
	 00:26:51
     ◼
      
     ► 
     from my app, it's like, there goes 40% of my business in terms of revenue just disappeared. 
     
     
  
 
 
	 00:26:58
     ◼
      
     ► 
     And so I need to work out how far down that road I feel comfortable with, with other people's 
     
     
  
 
 
	 00:27:04
     ◼
      
     ► 
     code, other people's showing things in my apps that really maybe I don't agree with 
     
     
  
 
 
	 00:27:11
     ◼
      
     ► 
     or like, but ultimately I have to ship a product that I feel comfortable with. So it's going 
     
     
  
 
 
	 00:27:17
     ◼
      
     ► 
     to be a really interesting next couple of months as I kind of filter through that. 
     
     
  
 
 
	 00:27:21
     ◼
      
     ► 
     All right, well, best of luck. I think your plan sounds about right. I think I agree that 
     
     
  
 
 
	 00:27:25
     ◼
      
     ► 
     going to one of the biggest companies that is most reputable, AdMob or Google, that makes 
     
     
  
 
 
	 00:27:33
     ◼
      
     ► 
     the most sense, I think. Because you're right, I think even though any ad company 
     
     
  
 
 
	 00:27:37
     ◼
      
     ► 
     is creepy to some degree, I think the giant ones like Google, they're probably the least 
     
     
  
 
 
	 00:27:43
     ◼
      
     ► 
     creepy among a bunch of very creepy companies. The smaller ones are way scarier to me. So 
     
     
  
 
 
	 00:27:50
     ◼
      
     ► 
     alright, well that's, I think that wraps it up for today. Best of luck with that, and 
     
     
  
 
 
	 00:27:54
     ◼
      
     ► 
     I hope, I'm sure we'll be talking about this more as you get new experience with these 
     
     
  
 
 
	 00:27:59
     ◼
      
     ► 
     things over time, and so I look forward to hearing more about it as this whole thing 
     
     
  
 
 
	 00:28:04
     ◼
      
     ► 
     unfolds. So thanks a lot to everybody for listening. Please recommend us 
     
     
  
 
 
	 00:28:09
     ◼
      
     ► 
     on Overcast and you can review us on iTunes if anybody still uses that and we 
     
     
  
 
 
	 00:28:14
     ◼
      
     ► 
     will talk to you next week. Thank you everyone for listening and we'll see you 
     
     
  
 
 
	 00:28:16
     ◼
      
     ► 
     next week. Bye.