Your comment around directing the ads to your website (with video demo) vs straight to iTunes is something Rick & I debated when we started our adwords campaign.

We both really like our video demo of Gratuitous as we feel it illustrates the functionality and ease-of-use of the app more than the static screenshots in iTunes. In the end, we decided to point the ads directly to iTunes for a couple of reasons.

First, we thought that users might be more inclined to click on the ad if they saw the URL was going to Apple’s iTunes store. Second, we thought it that we might get a better response (eg, conversation rate) if we sent people directly to the iTunes page where they could immediately buy the app.

If our ad campaign for Gratuitous went better (eg, the per click rate was much, much lower) then we were going to run two campaigns: one ad directing to our website (with video) and the other straight into iTunes, and see which obtains a better result.

Thanks again for sharing what you’ve learned. If anyone else has dealt with this, please comment and let us know.

Before I started actively advertising the application, I noticed that the number of sales for each day seemed to scale linearly with the website traffic to my product’s page. For every 10 visits to the product page, 1 person would buy a copy of the application, so that’s what I’m calling my conversion rate (10%). This is a poor metric, given how many channels people can go through to get the application (App Store in iTunes, on iPhone, direct links elsewhere, etc.), but it’s the best I have.

I drive all my ads through this page, because I’ve found that my product video is one of my best sales tools, far better than the static images on the App Store (this is what I believe leads to the 6-10% conversion I have seen, far higher than the industry-standard 1%). This aids a little in the analysis of ad performance. For example, I know exactly how many people clicked through my iLounge ad when it started running, so I could figure how many more sales it added on average, compared to the traffic it drove, and determine a conversion rate from that source.

Things got a little more complex when I started running multiple ad campaigns, but again I can track the number of visitors they drive and try to correlate traffic spikes from certain sources with increases in sales.

I also use Google Analytics to tag my iTunes links so I can see who clicks through the pages to go to the App Store for the product. I figure that if they’ve seen the video, browsed the screenshots, and see the price right under the link, that’s most likely a sale. Interestingly, very few people who buy the product do so by first clicking on the iTunes link. They must read the page and go to iTunes or the iPhone App Store manually.

I’m pulling together a more rigorous analysis of these numbers, but I need a little more data.

How are you measuring the conversation rate? Is based on the percentage of people who decide to click through to iTunes from your ad-directed webpage? Just curious since we don’t have any sort of analytics information from Apple other than basic sales numbers.

Thanks for sharing your insight/experience with advertising. Its really great to hear how other developers are faring.

It’s not just AdWords. For the various monthly banner ads I’ve tried on targeted sites, small and large, the amortized cost per click ends up ranging from $0.11-$0.55. Most of those seem to drive lower conversion rates than AdWords, although a couple have been much better.

However, if you can make advertising work so that putting in $10 gets you $12, you keep feeding in the money.

I have given up on adwords etc too