In this five part series of posts we will be investigating the reasons to use the freemium app model, how to earn money from your free apps and the obstacles you might face if you go free.
Part 1 – Monetize Your App: Free
Part 2 – Monetize Your App: Ad Supported
Part 3 – Monetize Your App: Sponsorships
Part 4 – Monetize Your App: Affiliate Sales
Part 5 – Monetize Your App – In-App Purchases
A lot of apps are released for free but make money from ads. An ad-supported lite version of an app can serve to promote a paid version, another service or product. If you have a large user base this could be a good way to go, the more impressions means the more clicks you’ll receive. You should expect around 4% of impressions will deliver a click-thru, so you’ll need a lot of impressions to make money. The most popular ad networks for iOS is iAds (owned by Apple), Google’s Ad Mob or one that I’ve trying out lately named RevMob. RevMob has the largest eCPM of any ad network I’ve looked into. Make sure your ads don’t get too much in the way of the user experience but strategically place them in your app to catch the users eye. There are a lot of factors that determine if your app will benefit from being free, but here are some of the major ones to consider:
App pricing – If your app is legitimately a high-ticket item, you may not be able to recover the loss of sales from ads alone. A combination of ads and/or in-app purchases, may work.
App usage – The more you can get users to come back to your app, the better. More usage = more ad impressions & more ad revenue. If your app is something users would likely only use once, you may be better off getting the money up front.
Real estate for ad placement – Can you sacrifice the screen real estate needed for ads without severely affecting the user experience? Some apps lend themselves better to ads than others. Don’t try to cram ads where they do not belong, it will lead to negative reviews and a serious impact on usage.
If your app meets the criteria for successful ad placement, free can be a very profitable way to go. Not only can it increase your user-base, but your overall revenue as well. Free does not mean the end of paid app sales, and you may very well find yourself bringing in more revenue from your free app than your paid app.
Below are a couple of tips on how to integrate ads into your app:
Create Specific Ad Screen: Placing a banner at the bottom of an app when the user is focused on the middle of the screen, is ineffective. If, however, during a transition of the app, you offer the user a unique screen with the relevant ad, you have increased the chance of generating a click significantly.
Be Transparent to the User: Most apps with integrated ads are offered for free, which is only possible thanks to the ads. Make this clear to the user. Don’t ask them to click, but explaining to the user that the app is free because of the ad they are seeing, and a click will help it continue to be free is a clear and logical argument that most users will understand and implement.
Delay the Skip Option Slightly: While banner advertising has proven itself as an effective method of promoting a product or a service, the fact remains that if you provide a user the ability to skip an ad, most people will take advantage of it. One method of making sure the user sees your ad is by offering the Skip option with a delay of a few seconds. That way, the user has the ability to ignore the ad, but that ability only becomes available after a few seconds, in which the user is exposed to your message.
Animate your Ad: Just like on the Web, animated ads and rich media in general yield better results than text-based ads. If you can integrate more dynamic advertising in your app, that will not only increase clicks, but it will engage your audience in a way that text cannot. This will of course lead to higher user satisfaction, which in turn will also lead to more clicks.