Monday, March 5, 2012

Free or Paid Apps - Which Option is Best?

by Amy Vale

Discussions have been going on for the last few years, not only within the publisher community, but across the U.S about whether apps should be paid or free of charge. There is the question of what is the best business model and also the way this affects the consumer’s experience. This question has also come a long way since the discussion first started precisely because of mobile advertising. You now have many options available to you - paid, free, and somewhere in the middle. While a paid app can provide a larger up-front profit, providing an app for free and monetizing it with mobile advertising can produce a continuing revenue stream. 

The main difference between a paid app and one released for free is the amount of potential users that will see it and then download it. Most users who are app browsing naturally prefer free ones and as a result, these receive more views and downloads. These are some strong reasons to develop a free app.

So, does this mean you should always release your apps for free? Some developers believe that if you can design and create an app which gives the user something valuable which they can’t find in a free app, then making it paid can be a great revenue maker. Even if it is available in some form for free, if your app is higher quality and comes with added value making it paid may be a good idea.

The in-between option is the possibility of releasing a “lite” version of your paid app for free. The idea is that you release a fully-featured paid version and a free version with limited functions. This enables the user to test out the app, realize its potential, and then want to purchase the full version for all the benefits.

However, the strongest option, one where users benefit and you, the publisher does too, is where you keep the app free and monetize it with mobile ads through in-app advertising via banner ads, interstitials and rich media ads. This means you can make money through your app while still releasing it to the public for free, so you get the benefit of more views and downloads for being listed under the “free” section in the app store, and you also have the in-app advertising revenue stream.

There are several alternatives for releasing a mobile app, and it is up to you and your development team to figure out which method will work best for you - not only for generating revenue but also with your strategic campaign. Monetizing a free app through mobile advertising is a very powerful, and proven, revenue generator.


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