Mobile app developers and builders face one big decision when taking an app to market: whether it should be a paid app or a free app. Traditionally, free apps have made most of their money through paid advertising. However, there are plenty of ways to make money from an app that don’t involve paid advertising.
Although they don’t involve paid advertising within the app, they do involve using the app itself as a free advertisement for a paid product. Those who are or have been involved in Internet marketing will recognise this strategy, as it has been used often with great success. Here are a few ways to adopt this strategy into free apps without it coming off as “advertising.”
One strategy is to offer an inexpensive game as an add-on to a free app. Popular free Japanese mobile messaging app LINE offered an inexpensive puzzle game, and made $1 million in revenue in two weeks. This strategy of “piggy-backing” a paid app is a great way of using the free app to generate revenue.
Another variation of piggy-backing is called the “Freemium” model. With this app, you make a free version and give the user the option of downloading a paid “premium” version with more features. The advantage here is that the free portion of the app becomes an advertisement for the paid version, without being obtrusive. A great example of how Internet marketers have done this for years is free dating sites, who offer upgrades in service to paying customers.
If you don’t have your own product to piggy-back onto your app, you can piggy-back someone else’s app onto yours, on a commission basis. This is similar to how a lot of affiliate marketers work on the Internet; offer something free that includes an offer for someone else’s product.
Most of us in English-speaking countries think of our own country first, and the rest of the English-speaking world second. We often forget that the rest of the world exists. That could be a mistake, and it could cost you a lot of money. In October 2, 2012, the country that generated the highest amount of app revenue in Google Play was Japan, at 29%. The U.S. was second at 26%, but Korea came in third at 18%.
A partial list of other countries that are growing in a very fast rate: China, Taiwan, Thailand, Russia, Mexico, and Brazil. While we’re not saying that you need to make an app specifically for any of those countries, it could be very lucrative if you did. At the very least, you should try to make your app friendly and attractive to those countries.
If you have a popular app, you can monetise it with licensing and physical merchandise. The obvious example here is Angry Birds. Then again, it is every app developer and app builders dream to build the next Angry Birds. Your app doesn’t have to be as popular as Angry Birds, but if it does become popular, don’t overlook the possibility of potential income through licensing or merchandise.
You can also turn advertising into entertainment. This strategy, while requiring a degree of finesse, is a great way to use the traditional advertising model without actually appearing to use the traditional advertising model.
For example, DreamWorks worked their film Madagascar into an app called Talking Tom Cat, which has been installed more than 600,000,000 times. Instead of a traditional advertisement, they designed nine-second, interactive applets, which were activated by beating Talking Tom Cat five times. This attained a click through rate slightly over 9%.
Before advertising, overt or covert, works, your app has to be downloaded. If we had to choose between improving our monetisation rate and increasing our number of installations, we would definitely increase the number of installations first. That being said, we recommend a combination approach; build your installation base and then tweak your advertising to maximise your ROI.
Many of those who’ve decided to develop or build apps for a living are coming into the app industry from various business and sales backgrounds. While many things that work in the retail, wholesale, and service industries don’t work on the Internet, many of them will.
Just like a couple of the examples we’ve given, a simple tweak or “angle” added to a traditional sales technique can turn into a groundbreaking and creative mobile app sales technique. One of the greatest advantages to marketing through apps and on the Internet, as opposed to traditional methods such as newspapers, television, and radio, is that you have a lot more wiggle room. Don’t be afraid to experiment.
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