Speaking from the point of view of paid app marketer.......
It's all about getting the high ranks - Wrong!
Yes, if you're ranking high in the App Store chart, you get the visibility that you only dreamt of, and magic often happens. As Mighty Eagle of Rovio explains, "Being #1 starts doing some magic". If you read between the lines, its starts the magic but doesn't cause the magic to start. Apps rank high because of the well-planned marketing effort, but it starts with the product. Mobile app users are chatty, and word-of-mouth catapults the traction. However, ranking happens as a result and not because.
A small paid advertising campaign to test out the customer funnel, optimize that channel, and maximize the sales.....blah, blah..... - Not quite.
If you're like most of the paid app developers (meaning excluding the in-app purchase or offdeck subscription apps), you don't get many chances to optimize that channel. It's a fight for impulse buy. It's about quality product. It's about capturing that "moment" to convert. In a more traditional SaaS business, you get a number of chances to convert these users to long-term paying customers. For many of the paid apps, there's one (maybe 2-3) chances to convert. This places tremendous pressure on marketers to ensure that the conversion happens early on in the purchase process.
Free apps are obviously different, because it's really about the engagement that makes or breaks a free app. There's no cost to the "buyer". You don't get paid a dime for selling a free app. For socially-driven apps, as long as network effect kicks in at some point in time, you're in good shape. BUT, it's the user engagement.. gotta keep 'em coming back.
As for the in-app marketing... it's a separate topic.