Charging for an App
Every time a new application or its update is uploaded to the Android Market, the developer must choose whether to provide it for free or charge for it. Following are the main options:
- Provide the app for free. Everyone who can access the Android market can see and install the app.
- Provide a free app, but include advertisements. In some cases, the developer negotiates sponsorship for an app. More often, the developer works with a third-party aggregator. Payouts are provided for clicked ads and less often for impressions (ad views). Figure 1.1 shows an example banner ad from AdMob. Such ads require the application have permission to access the Internet and the location of the device. Consider using coarse location instead of fine location to avoid deterring some potential customers from installing the app.
- Provide the app for a charge. Google handles its charges, but takes 30 percent of the proceeds. Countries that are not set up for charges through Google Checkout cannot see or cannot install an app for charge. For these reasons, some developers turn to third-party app stores for distribution.
- Post a free, limited version, but charge for a full version.This gives users the opportunity to try the app and if they like it, they will have less resistance to purchasing the full version. For some apps, this is a natural model (such as a game with ten free levels), but not all apps can be partitioned this way.
- Sell virtual goods inside the app.This is an important way Facebook apps work, and it is catching on in the mobile world.
Free applications tend to get a lot of views. Even the most obscure and odd applications seem to be downloaded and viewed by at least 1,000 people in the first month the application is on the Market.There are some developers who explicitly say,“This app is absolutely useless,” and yet, they get over 10,000 downloads and a four-star rating. Somewhat relevant free applications can get as many as 50,000 downloads, and extremely useful free applications have over 100,000 downloads. For most developers, such exposure is quite impressive.
Mobile advertisement is still in its infancy and usually does not entice enough users to click the ad. For now, monetizing apps is best done by charging on the Market.As long as the app is useful for some people, has a clear description, and has a good selection of positive reviews, users purchase it. If an app is successful, it might make sense to raise the price of the app.
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