Mobile App Monetization: Paid vs Free Apps
When it comes to mobile app monetization the ultimate question that comes to any marketing mind is always the same: what will bring in the biggest profit – paid or free app?
While free mobile applications definitely outdo the paid ones in terms of downloads, the paid applications have certain advantages, with extra revenue being the obvious one.
Every business strives to launch a successful app. To do so, you need to have a monetization strategy in place. As well as the clear understanding of which type is right for your mobile application.
Paid Apps vs Free Apps
There are two obvious facts about the paid apps:
- Apparently, they bring in a higher average revenue per download;
- Users are commonly more loyal to the software they pay for.
If your business does already have a solid customers base, then you have higher chances to benefit from the paid app. However, if you have just started building a brand image, this might not be the best idea as users are less likely to buy a mobile application they can’t test out and experience first.
What’s more probable in this case is that they will find a similar app on the App Store, which is free of charge, and won’t ever bother with buying yours.
With free apps, on the other hand, there is basically no obstacles on the download border. In a couple of clicks, people download the application, try it out and see if they like it.
Why offering an app for free?
- An easy way to start earning on in-app purchases
- An opportunity to show a new brand on the market
- The quickest way to reach a big number of downloads
If your app is free users don’t lose anything by downloading it, which generally makes them have lower expectations about app quality, thus provide a better review.
The advantages of free apps are evident, meanwhile, there are some obvious obstacles as well. Clearly, there is no guaranteed revenue in monetizing a free app. Getting a high number of downloads doesn’t actually mean users will make in-app purchases or click the ads inside. Apart from this, when users don’t pay for the (digital) product they are less willing to regularly use it.
There is a variety of mobile app monetization strategies. But to define the one you need, let’s find out which app type, paid or free, will work for your business best.
How to find out whether a free or paid app will work for you best?
- Make a Good Competition Research
Before making a decision on the type of your app, ensure you’ve made good competition research:
- Compare your application with similar ones
- Find out how they earn money
Besides the competition, you need to have a clear understanding of your user needs. If you believe users won’t be willing to buy anything inside, or there might be not enough traffic to bring you money with ads – do not expect to earn a lot with a free app.
- Get to Know Your Market
Examine similar mobile applications to identify the best types and practices of app monetization. Learn competitors’ techniques and figure out if you are on the line with the top apps offered on the market. Pay attention to the issues that need improvement and components that can enhance your application productivity.
While building a new profitable app, getting a good understanding of your target audience is just as important as the competitors’ research.
- Focus on User Growth
It doesn’t actually matter whether your app relies on freemium upsell, in-app advertisement strategy, or the paid basis. When it comes to the free app, only a small fraction of users will help you generate revenue from the app; when the app is paid – you need to market it to get the highest possible number of downloads. This is why it is important to grow a wide and active user base. Research the demographics and tendencies to present relevant advertising of your app.
- Provide Unique Content
Succeed through providing content that isn’t available anywhere else. If you have knowledge in a specific area that your target audience could benefit from, the content that your app offers becomes a real product that users will be ready to pay for.
- Keep It Up to Date
Consider releasing updated versions of your mobile app. Having frequent updates helps to show that the app is current and is being actively supported. Set up pop-up notifications whenever an update is available. Remind your users unobtrusively that your app still exists and its updated version now features ‘something interesting’.
- Build Free and Paid Versions
Offering both will help you maintain a free version without a need to take care of its returns. While having a paid version, that contains exclusive content, will bring you to profit directly from the users. You might have seen companies offering free versions with ads, and paid versions with all ads removed.
The free version will attract users and inform people about your brand. If they find your product useful, there will be a number of customers that will fully upgrade to the paid version or get paid access to the additional “premium” features.
Developing a mobile application is hard work while making money from the app is not much easier.
Though, these days, getting an app created is not as difficult and cost-based as it used to be even a decade ago. With companies like Synergy Way, businesses now have access to high-level developers that know how to develop the application and market the app to the “right” customers.
Feel free to contact our development team to get a professional review and app estimations.
Whether you decide to develop a paid mobile app or to keep the application free, make sure you have received a professional consultation and weighed up all the pros and cons of app monetization models. Using the correct monetization model will ensure your product gets noticed and that the revenue starts rolling in.