In the freemium model, users are able to download an app for free. Businesses can then earn revenue by offering in-app purchases or by offering additional features through paid upgrades. As users grow accustomed to downloading apps for free, the freemium model has created new consumer expectations, as app users grow used to testing an app before committing to payment.
For example, popular apps such as Spotify allow users to listen to randomly shuffled tracks in the free version, while the paid upgrade allows them to enjoy a full selection of music that is available offline. Similarly, Dropbox entices users with a free trial and requires payment once the initial storage space has been filled with documents or photos.
The survey also found that although they may have been popular strategies in the past, app developers are now relatively unlikely to recommend in-app advertising and sponsored apps as successful monetization strategies. In particular, users are likely to find in-app advertisements spammy if they are overused.
The survey also underscores the importance of marketing new mobile apps. Randall Cross, one of six mobile app development experts interviewed for the survey report, is the founder of Ethervision, a development firm based in Chicago.
“If you don’t have a marketing budget at least equal to your development budget, you need to rethink that,” advises Cross. In his experience, attracting enough users to drive significant revenue can take months or years.
Social media emerged as the leading strategy, with 37% of app developers recommending that companies prioritize it. Companies planning to invest in a mobile app should also budget for paid advertisements that can drive consumer awareness, the survey revealed.
Mobile app development firms typically offer some guidance for how companies should describe their mobile apps to consumers, but the success of mobile app marketing ultimately depends on the ability of internal marketing teams or agencies to incorporate messages about a new mobile app into a company’s existing overall marketing strategy.
As more small businesses invest in mobile apps, monetization and marketing decisions are among the most important choices they will face. Although mobile apps can drive revenue, companies should set generous timelines for attaining a critical number of users and plan for a substantial marketing budget to get there.