No one has been able to advertise paid applications on the iPhone platform and get a positive return from the advertising itself. The name of the game is to ge

No one has been able to advertise paid applications on the iPhone platform and get a positive return from the advertising itself. The name of the game is to generate enough downloads to get onto a 'top paid app' leaderboard in your category, which will then expose you to a bunch of buyers who wouldn't have seen your app otherwise. In other words, you're indirectly paying for placement. All cost-per-click networks will have abysmal conversion rates for paid apps. Cost-per-install networks shift this risk from you to the network, since you only pay per install. However, paid apps advertising on straight cost-per-install networks delivers minimal volume, which makes them not worth doing - while the risk to you is gone, the conversion rate still sucks. Some cost-per-install networks (Tapzilla, Apperang) require you to pay them more than the cost of the app, so they can bribe users to install the app. This works, but it automatically results in a negative ROI on the advertising itself - since they take a cut, Apple takes a cut, and the user gets reimbursed through PayPal. If your spend isn't enough to get you onto a leaderboard and get that sweet organic traffic, you wasted your money. Right now these user-bribing networks are still small, so this is a real risk. Buy from everyone simultaneously. Happily, there's a lot more options for free applications. If you've figured out how to make sufficient money from your users through virtual goods sales (like one YC company, Addmired, although there are many others), and therefore can afford to advertise, there's many cost-per-install options you can use to effectively buy placement - Flurry (which is mine), TapJoy, MDotM, Free App A Day, many others. Again, the prudent-but-flush developer buys from a lot of sources simultaneously to ensure their application ends up on the front page of iTunes.