Make my app free? The push to in app purchasing

We've been working with iOS app design and development for some time, and the question we often get asked by our clients is "should I make my app free or paid?" The natural response might be to make a paid app to profit. However, the way app experience is moving, this might not be the case. There are three popular methods of profitting for an app: premium paid app, in-app advertising, and in-app purchasing. Let's explore all three options.

Premium Paid App

Premium app is pretty straight forward—you pay for the app before you start using it. Alternatively, some developers like to create a free and premium version (which is what we did initially for Animal Hide & Seek Adventure).  This is the more traditional way of monetizing. Though you can make money right away, there are some cons to ding so.

• The reach of your audience can be pretty limited. A lot of users may simply search for free apps and completely ignore premium apps, unless you make it on the top apps list.
• Users tend to be more harsh in reviews about premium apps if they are disatisfied because they invested in it.

An interesting data point, we recently made AHS free to see the impace (previously .99 for iPhone, 1.99 for iPad).  The day of the price change our downloads skyrocketed, 4k downloads in one day, and topping charts in Japan & China.  Right now, we have choosen not to monitize and look at this as a way to gain more exposure.  But the increase in downloads was astounding -- people like free stuff.

In App Advertising

Apple allows developers to use tools such as iAd and AdMob Pro to include in app advertising to monetize. Keep in mind that in app advertising can be detrimental to your user experience and the overall feel of the app. Make sure if this is the right business model for your app. The popular game Hanging With Friends has a premium version which is ad-free, but also a free version that has advertising throughout the app. You see immediately how distracting it can be. Zynga was smart in offering a premium ad free version. If you are developing a free app with no ad free premium version, consider what in app advertising might do to your user experience.

In App Purchasing

Since iOS 3.0, iPhone/iPad apps have been able to have in app purchasing, where users can upgrade or buy additional products within an app. Some examples are points for games, additional photo filters, you name it. Camera Plus and Path are two great app examples that are free but offer premium content using in app purchasing. This method is becoming more and more popular recently.

By making your app free, you are reaching out to more users. Once users have earned the trust of the app and enjoy it, they are more likely to purchase upgrades or in app items. There is also an opportunity to consistently make more money. When you make an app paid, you are banking on the profit of the initial purchase. Say you sell an app for $0.99 or $1.99, that is all you are going to get, unless you tack on in app purchasing as well. However, say you make a free app, and then you charge $0.99 for in app items for the user to select. They might like your app so much that they frequently spend money on it.

When planning your marketing strategy for your app, consider the best way to make money, not necessarily the fastest. Free is a great way to earn trust, then offer great products people like to buy.