Selling Paid Apps vs. Giving Apps Away Free with Ads on Them
Now that my first app is live and available on both the iPhone app market and the Android market, it is time to find out the best way to monetize my apps. My iTimeOut app is pretty basic and I don??t expect it to skyrocket up to the top of the bestselling apps list. This was an entry level app that I created to simply learn how the process works and see if creating other apps is something that I want to pursue. Like I said before, I??d be happy to simply make my money back and create $50 a month in residual income from iTimeOut ?? anything more is gravy. In any case, creating an app and getting it live for only $125 is a real bargain.
If iTimeOut gets just two downloads a day on the iPhone app market, I would make $42 a month. This would be at a price of .99 cents and my cut would be .70 cents. (.70 cents x 2 downloads a day = $1.40/day x 30 days = $42.00) Right now iTimeOut is on both the Apple and Android markets at a listed price of .99 cents. Both apps went live on April 13th, 2010 and I plan on leaving them both for sale for a period of one month. After one month I will calculate and post my sales figures below.
In the meantime, my app developer is creating two free versions of the iTimeOut app for both Apple and Android. I hope to have the free versions up on both markets by mid-May 2010. These free versions will feature advertisements from the ad network AdMob and I will get paid whenever someone views these ads. I think this is the case?do any of my readers know whether AdMobs requires and actual ??click? on an ad to get paid or if you simply get paid when the user views the ads when they open the ap? I think the latter is the case. Also, I am unsure how much AdMobs typically pays per view or per click ?? if someone has an idea of this figure, please comment below!
Once the free versions have been live for one month, I will also come back to this post and enter my earnings figures from AdMob below. I don??t plan on doing any special advertising of this app during this test period so I won??t skew the results. I think this will be a very interesting experiment and to be honest, I think I already know what the results will be. Below is my sales chart for both the paid and free versions of iTimeOut?
iTimeOut Sales ?? 1 Month Period (April 13 to May 12)
iTimeOut for iPhone @ .99 cents: $_______ ___ Downloads
iTimeOut for Android @ .99 cents: $________ ____Downloads
iTimeOut Advertising Earnings ?? 1 Month Period (May 13 to June 12)
iTimeOut for Iphone FREE: $________ _____Downloads
iTimeOut for Android FREE: $________ _____Downloads
So let the experiment begin!
Michael-John Wolfe
Tags: make money online, residual income, royalties
6 Comments to “Selling Paid Apps vs. Giving Apps Away Free with Ads on Them”
Leave a Reply
To be honest Michael, I think you’ll mostly do well with the free app version. It won’t hurt to have both available.
Keep us posted, love these experiments!
Hey MJ, Eric again.
My room mate programs video games for iPhone. It seems that whenever he offers a version for free and a version you have to pay for – even if its 99 cents – people ONLY download the free one.
So, if you release a free version of your app while your 99 cent version is still making some sales, don’t expect it stay that way. It sounds like you have the right idea, though. It seems like it’s best to wait a month, see how many sales you make, and then evaluate if you should release the free one.
I’d say that as long as you continue to make sales, maybe you should wait on releasing the free ones.
Then again, I really don’t know anything. I’m just an outside observer of this who iPhone app store phenomenon.
Hi Eric — yes, I plan on leaving the paid app listed by itself on the iPhone store for a period of one month. Then I will add the free app and see the results. I already know the free app will get way more downloads – I just don’t know how much money the ads on the free app will generate. I guess we’ll find out!
MJ
Hi,
Thanks for the information on apps guys. It is all very interesting. I have an idea for an App but really dont know where to start as I dont have any programming experience. Could you recommend a third party that specialises in App development? How much does this service generally cost?
Thanks.
CoyleApp
Hi Coyle! Thanks for visiting my blog! My app developer’s name is Russ and you can hire him through elance. He is great to work with and reasonably priced. Visit his elance profile here: Quality Coding The price would really depend on the complexity of your app. If you have an app made — come back and let us know about it. Good luck!
MJ
It is interesting to see that you have gone for the advertising option. I know of many apps which have both – some have a basic free one and a paid app with a few extra bells and whistles. I think even after the month you will have to make the earning comparison carefully. For example if you sell 50 apps at $0.99 each this will appear to have higher earnings than a free app which gets 100 downloads and earnings of $.10 per month (and in the first month it will be even less since the downloads later in the month will have less time for the ads to be shown).
However, the advert option may turn out to be the better one, since there are ongoing earnings from adverts and not just a one off income.