Free App Strategies

A couple weeks ago I thoroughly bummed out a lot of iPhone developers with real, hard numbers from the app store.  Selling apps is a ridiculous gamble, but free is still on the table.  Today I’ll talk about some free app strategies, for those who haven’t abandoned the app store just yet.

So you’ve got an app, and I’ve convinced you that selling it for a dollar a day isn’t worth your while.  Now you want to release it for free, and generate some revenue from ads.

I’m not going to go over the different ad networks here.  As far as I can tell, they are all roughly the same — and tragically, that means they’ve all decided to go the entirely uncreative route of taking the web advertising model note for note.  In other words, CPC/CPM and very little chance of ever making a significant amount of money off the average app.  Once again, your app needs to be one of the breakout successes to make any significant cash.

So lets look at how to make that happen.

To Free or Not to Free?

First, you need to ask yourself if you should even bother with this route.  Again, iPhone app ads mirror web ads exactly, which means you are only going to make money if you are showing a metric shitload of ads.  If your app is a throwaway novelty — the kind of app people open once, grin, and never look at again — this is not for you.  Even if your app was downloaded a million times (it won’t be), that would mean 1, maybe 2 million ad impressions over the life of your app.  Figure a $.20 CPM (pulled from one of the networks I currently use) and you just made $200.  Not that impressive.

What you are going to need is 1-2 million impressions a day.  That means you better have the kind of app that people open constantly.  My Zen Jar app is a networked communication app, and users have found it fairly addictive. Consequently, it serves up a lot of impressions relative to the number of times it has been downloaded.  As of this writing, there are a little over 10,000 people using Zen Jar, and the ad revenue it generates is equal to the sales revenue of the full version.

I am taking a wild guess here, but I would have to say if any of the free, ad supported apps were doing really, really well, it would have to be TwitterFon.  It smartly latches on to a service that is used regularly and frequently, and as such is opened multiple times daily by its users.  On the flip side, I wouldn’t recommend your Koi Pond simulator go the ad supported route.

Needs More Downloads!

There has been a lot of talk about how many of the app store’s 1 billion downloads were free apps versus paid.  I’ve heard all sorts of numbers but I can use some of mine to make an educated, although totally unscientific, guess.  Zen Jar is #39 right now in paid social networking apps.  Zen Jar Lite is #60 in free social networking apps.  The difference in downloads, adjusting for rank, is about 200 to 1.  Based on that, when people ask me how many of those billion downloads were paid, I say, to err on the safe side, 10 million.  But probably much less.  Again, this is totally unscientific, but it didn’t surprise me in the least that the 1 billionth download was a free app.

This is sad news for paid apps, but pretty great news for free apps.  My best paid apps do around 20-40 downloads a day at maximum.  My best free apps see 1000+ downloads a day at maximum. That means the chances that a user will stumble upon your ad, and possibly become a regular user, are about 200 times what they would be if your app were paid.

The Big Catch(es)

Yes, there is a catch. Two of them.

First, many people download free apps and never open them.  Many people download free apps, open them, and then never opent them again.  Free means no risk, and people download stuff they don’t want, don’t need, and never will.  This inflates the download numbers and makes it really hard for you to know how many people actually are actively interested in your app.

Second… well, let me put this in a way I put it to a collegue last week: on the Apple App Store, the difference between an intelligent, thoughtful customer and a hairy-knuckled, mouth-breathing idiot is one dollar. Expect to see a positively absurd number of reviews for your app so stupid it physically hurts to read them.  And consequently, expect to see an average app rating hovering around 1 star, regardless of how good your app actually is.  Anyone with an app in the store can tell you how blisteringly stupid a sad majority of app store customer reviews are — a Google search will turn up a fair amount of evidence as well.  I have no idea why this is, but it is something you have to deal with.

Zen Jar is a 3.5 star app.  Not bad, considering how many people have downloaded it.  Zen Jar Lite is a 3 star app.  Also not bad for a free app.  But I had a plan, and the plan was to beg users to leave reviews to compensate for the painfully stupid ones.  Do not hesitate to ask your users to take the time to review your app, otherwise you will be stuck with those who have nothing better to do.  Trust me on this one, and plan ahead.  There are really great, thoughtful people who use free apps, but many of them never think to leave reviews.  Bored 12 year olds with the reading comprehension of a farm animal have nothing better to do than review your app.

Think Ahead

The key to all of this is to think of how you are going to monetize your app as step one.  That means, before you even come up with your app idea.  Don’t assume you can just take your awesome idea and profit from it as a free app.  Make sure it is compelling, will be regularly used, and will reach a wide audience.  Exactly the same as if you were building an ad supported web app.  Well, worse actually, because you can’t make up for a lack of traffic with niche — there is no keyword targeting in iPhone app advertising.  It’s all bulk, so come up with an app that will be used in bulk.

I will cover app marketing in a later post.  But there is very little difference in how you attract users to an iPhone app and how you attract users to a website.  Same principles apply, and same ridiculously difficult slog. Good luck!  Or just hire me (or someone like me) as a consultant, as I’ve done it several times now.

Other Options

Of course advertising isn’t the only way to make money on a free app.  If your app plugs into a website you own, advertises an actual product, or generates leads for a product you can collect a percentage of, then go for it.  I just downloaded a really great app called Threads which displays t-shirt designs from Threadless, then links users to the site to buy them.  I believe the threadless affiliate program only gives you credit towards your own purchases, but the guy who made that app could find himself neck deep in free t-shirts.

Whichever route you go, just stay realistic.  It is my opinion you have a better chance, all things being equal, of making money with a free app than a paid app.  But you still have your work cut out for you.

Good luck!