The one guy I know with an app, who directly makes more money from ads than they cost, has an expensive outdoor GPS app, not IAP. One thing I've noticed is that web apps are ridiculously cheaper than mobile ads. So even if your conversion sending people to a web site instead of an app store was only 10% as much, it is still more cost effective. Personally, I've only bought ads whenever I'm trending in app stores and want to stay in the trending category, which nets a lot of users. Although I often do ad exchanges/trades/or market in other apps of mine.