App Monetization AH 01

Free, Freemium or Paid? What’s Best for Your App?

July 22, 2015 - Written By Tom Dawson

Developing that latest Android app or game was not free, and even if you only employ a small team of developers – or have done it all on your lonesome – there are costs associated, and let’s not forget that time is money. When you’ve completed your latest project and are happy with how it’s come out, you can start to release it into the wilds of the app stores. Just how do you release your app? Do you charge up front? Ask for in-app purchases or just rely on ad revenue to get some of your development costs back? Here, we’ll go over which method would suit your app or game the best, and hopefully point you in the right direction.

Free (with Ads)

Offering up an app or game for free is perhaps the easiest way to get people to pull the trigger. After all, if something is free, there’s less risk attached and people will be keen to download your app. The problem with free however is that you need to advertize quite heavily in order to make money from a free app, and you also need to drive a lot of users to your app as well, which could come with marketing costs.

You should try the free with ads option if yours is an app that is perhaps a casual game or an app that offers the same sort of functionality as others out there. An app or game that commands regular usage, daily or once every few days, will work well with this method. Apps that are a little more focus, like utilities and productivity apps don’t do so well with an outright ad model. After all, you’re asking people to get work done with these apps, not throw ads in their faces.

Another option, which app monetization companies often recommend, is to use this model as a sort of stepping-stone to your premium app. Offering a cutdown app with ads and missing features for free is a better way of getting a users to cough up the full price right out of the gate.

Paid Apps

We’re sure many of you have seen the pricey apps and games in the Play Store and wondered whether or not they make any money. Well, the answer to that question is, it depends. Supply and demand plays a big part here; if your app is something niche and in high-demand, but short supply, then you can charge for it. The problem is that there’s so much competition out there it’s hard to know when to charge. If your app or game truly stands out, and offers something that the others don’t, then you might be successful offering just a paid version of your app. Having said that, you need to know your competition, and if you’re going to charge for the app you’ll also need to have a fairly robust marketing campaign to back things up, otherwise you won’t be driving enough customers to your app in the first place.

The paid app model often works best with a free trial version or a free app with ads (as noted above) because it’s easier for users to trust you with any kind of money once they’ve experienced the app for themselves. For premium and high-end games, gamers are more likely to pay for an app as long as there are no further in-app purchases. Gamers are happy to pay for their games so long as there are no nasty surprises down the line, so keep this in mind.

Freemium

Freemium refers to the model of offering the app for free, and then coaxing users into spending cash – often multiple times – on new features, in-game items and more. It’s the most popular way to monetize an app and while we’ve all heard stories of Candy Crush’s success, it’s not quite as simple as that. This model is best applied to smaller apps to remove ads, add features and casual games that add in power-ups, in-game cash and that sort of thing. Much like the free with ads model, going freemium relies on a constant and steady flow of users, only this time they need to be willing to spend money. Which means you’ll need to keep on offering updates and new in-game items, which of course comes with associated development costs.

Going the freemium route is good if you have some marketing backing up your app to help drive new users and a steady interest in the app. This sort of model won’t suit niche and in-demand apps, as a paid model is more likely to succeed there. Overall, the freemium model is one that can be lucrative, but it needs to be approached in a balanced and prepared manner.