The App game for developers, is free or paid better?

August 27, 2012
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    Everyone knows the overwhelming information available at our fingertips is through the usage of apps. From a consumer standpoint, we pick an app, we use it. If it doesn’t work quite the way we want, we try another. However, from the developer end of the spectrum, choosing an app niche to create is not the issue; it’s the awkward and still mostly unanswered free versus paid question.

    This problem has plagued the developing community since the inception of the choice between the two. Again, from a consumer standpoint, unless an app has a popularity rating that’s phenomenal, nobody is going to shell out. Standbys like Twitter, Facebook, and other vastly known social media app are a no brainer because they are free.

    Developers Dilemma 

    If you are a developer though, and have an API available for customisation, things get a little more tricky. Someone has to figure out how to get the monetisation scheme, if that’s the best route deemed possible. Herein, John Manoogian III, co-founder and CTO at 140 Proof explores the questions every app developer should answer before trudging forward into development:

    1.       Is my app engaging enough for people to use it often?

    2.       How willing are people to pay an up-front fee for my app?

    3.       How do competitors in my space monetize their apps, and how successful are their strategies?

    Furthermore he goes on to explain that the majority of app developers must then choose a model:

    1.       selling your app in the app store

    2.       offering a free, subscription-supported app

    3.       offering a free app, with in-app purchases

    4.       offering a free, ad-supported app

    App Monetisation: Advertisers or Users? 

     The hard truth is this: as a developer, you either get paid by advertisers or by users, and users admittedly have a much lower interest in paying that advertisers do. This is because they have a small piggy bank to draw from and oftentimes, don’t see the inherent quality of a product. They don’t see you, the developer, cranking out apps with months worth of 80 hour weeks behind the pretty little icon on their screen. What they value is reliability and productivity. Does the app do what it claims? Does it eat up memory? Does it entertain or educate? Advertisers only care about the projected virality of an app; your success is their success.

    The Simple Solution

    Onwards to advertising, where ad-supported apps reign and get gobbled up by the hungry dozens every second. This is a realm which is rapidly growing. $1.6B can’t be wrong, right? Free apps, by this news, would be the only way to go for a hungry developer ready to unleash their creation on the world. However, there is a small subset of app users, who search out premium apps without the ad-hassle. This may fly an ugly flag in the face of advertisers, but testing at such institutions as the Guardian UK, are trying the pronged approach: free and paid and getting great results. 

    You know that axiom, K.I.S.S.? I mean really, why cater to just one audience in this world of options? Developers take note: a customised paid app for your paying audience vs. a free app is a false dichotomy. Why? Consider these facts:

    • 73% of apps in the Android marketplace were free
    • 80% relied on advertising as their main business model
    • 20% of free apps get 10,000 or more downloads
    • 0.2% of paid apps are downloaded more than 10,000 times. 

    Free apps get many more downloads than their paid version or a paid competitor app. Yes, paid apps are a goldmine if you can innovate on an existing product and blow away the competition. Take the “low hanging fruit” approach and alternate an ad-supported free app version to your paid app ideas. Then make both and do yourself a huge favor.

    Oh, and one last thing: please don’t partner with advertisers that don’t have your best interests in mind. A good advertiser is thinking of future agreements down the line and wants to integrate with your users experience to leave a lasting positive impression.  This can create brand loyalty and even brand virality, instead of the dreaded “axe of annoyance” many users employ with apps who have tinkered with app monetisation.

    Developers, have you tried the dual approach and had any success? If not, why not give it a shot and let us know how it goes so we can feature your results! 

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    Comments

    • MasterMuffin

      I prefer free ad supported and if you want, you can pay 1$ to get ads away

    • http://www.androidradar.de/ Leif

      Freemium.
      Free part to help that the app can get viral and spread much. And in-app purchase for good extra functions (sync between devices, web ui, tablet layout, remove ads, extra filters in foto apps or such things)

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