Free or Paid? Mobile App Monetisation Discussion

You have an idea for a Mobile App or Game but you’re not sure how to monetise it? Or if you should even monetise it at all? I’m going to outline my thoughts on what monetisation model you may want to use for your app, and talk about the benefits each model brings along with the disadvantages of each.

“How can you make money from a Free App?” is a great question and there are a few different reasons you would want to make your app or game free.

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Free, promoting a product or advertising something

If your app is promoting another product of yours, or is accompanying an existing product that you own, usually the promotion that you will gain from having your own application will lead to increased views and sales of the other product. This, in many cases, is reason enough to have an app developed and to give the app away for free.

Current Examples:

These are all games with no advertising in them, they exist only to promote the brand they represent. The increased exposure for the product or brand will make developing the app worthwhile!

Free with In-App Purchases

If your app can be split up into multiple chunks, such as having a ‘level pack’, or if you have a form of digital currency in your app, then in-app purchasing might just work out for you! In-app purchasing is a term used to describe when users purchase extra content from within your app. Using a game as an example, if you have easy, medium and hard levels, you could give away the easy levels for free, but when the user comes to play the medium or hard levels they will need to purchase those in order to play them. Also, using the digital currency example, you could have an in-app purchase to buy ‘2000 gold pieces’. The user can use these gold pieces to buy upgrades or access parts of your app.

The ‘level pack’ method has a few benefits over having a paid app up-front, mainly that users get to ‘try before they buy’. The free download acts as a demo for your app and because the demo is free, more users would download it than would usually purchase it. It’s then the difficult part of making the users hand over their hard earned cash, but if the game or app is good enough, people will be willing to do so!

Managing how much of the app should be available for free is quite a tricky thing to do right. A recent example of how in-app purchasing can be done in a bad way is the game Dungeon Keeper on iOS and Android devices. This game constantly asks the user to hand over their money, and unless the user does so, they get very little reward from the game and progress through the game at a snail’s pace. Most successful apps that feature in-app purchase have it to act as a sort of ‘pay to progress quicker’ option rather than a ‘pay to progress at all’. People can still play the game without paying, and find it very rewarding, but if they want to play more of the game they have to give the developers a little bit of cash.

A successful game with in-app purchases funding it’s development is Candy Crush Saga, you’ve probably heard of it! This game gives users 5 attempts to complete a level, if they can’t do a level in 5 attempts, they can wait 30 minutes for an extra attempt or they can pay to get more attempts. This means that the casual gamer can play without really noticing the limits, but someone who plays it more often will be willing to give just a small amount of cash to keep playing, and with in-app purchases they can!

Free with Advertisements

Most apps that have some form of in-app purchase also use the advertisement method for a secondary source of income for their free app. You can embed advertisements into your app, either as a full screen image or video, or a banner along the top of the screen. Each type of advertisement has it’s pros and cons, mainly that full screen means interrupting the users’ journey through the app, whereas a banner along the screen at all times can be put anywhere at anytime. Although full screen interrupts the users’ experience, it yields much greater money per view than banner adverts, as the user is forced to view them and close them down manually. Per view, full screen adverts can make 14x more than banner adverts ( but they are viewed less often than banner adverts. Usually a mixture of both full screen and banner adverts are used.

You can also combine this advertising method with in-app purchase method to allow users to buy the ability to remove adverts in your app or offer it as an incentive to purchase some in-app currency (e.g. “Any purchase of gold pieces will remove adverts from the app forever!”). This means that if adverts are annoying people, and they like your game, that they can opt out of them for a small fee. 69p is the smallest amount you can charge on iOS, and 69p is more than you are likely to get from advertising revenue for that single user.

Paid Application

A paid application is an app which the user has to pay for to download it. Sometimes paid applications can still have in-app purchases to access extra content, but the app or game should be complete and have a long lifespan without the need to buy any content. You should never have any form of advertising monetisation in a paid app, although you could however advertise other apps/games if you have a suite of games, but never interrupting the user flow, or taking up a portion of the screen with a banner.

When to offer your app as a paid app over a free app is a little tricky. I think a lot of the time it depends on the type of app you have. If you have an app which people are likely to search for, such as our Calibre Companion app, then the paid option can work quite well. Also, if the app just doesn’t translate well to other forms of monetisation then this is the only form of monetisation you can go for. If you plan on selling your app for a substantial price (£1.99 or more) then it’s probably beneficial to have a paid app. As long as the price for the app is justified, then you will make more than any form of the free monetisation methods.

The benefits of having a paid app over a free app are that the majority of your users are people that are willing to spend money to try your app, this means they’ve seen something they like on your app store listing and want to see more! This usually means that this type of app is something they like doing or playing, meaning you will usually get a better set of users in the end. Better users will leave you more positive reviews (no reviews such as “I don’t like flowers so 1 star” on an app about flowers), also if they’ve invested in your product they are more likely to help improve the app and leave constructive reviews.

On the other hand, having a paid app means that you WILL get less users, for social games such as ‘Candy Crush’ or ‘Clash of Clans’, they rely on the fact that they will have lots of users, and those users will send Facebook requests to their friends and those will join and send to their friends and so on. If those were paid apps, they would have struggled to get that many people playing the game.

Overall, it really depends on what your app does as to how it would be best to monetise. Here at MultiPie we will offer our advice on which method we think would work best, and work with you to try and make it a success! If you’d like us to take your idea of an app further, please contact us via the contact form.