Nov 15 AT 4:20 PM Clark Wimberly 25 Comments

Topic Tuesday: How should developers make money from apps?


It’s Tuesday so that means we’re back with another hot issue, ready for user-only discussion. Today we think we’ve picked what should be a heated topic, because the question revolves around money. Not just money, but how best to go about getting some without pissing off all the users.

How should developers make money from apps?

I know that’s sort of a general question, but hear me out. One of the complaints I see in the Market (and here in the comments) most often is app price, banner adds, free vs paid feature set, etc. It’s clear that the way developers monetize apps is a hot button issue.

What’s also clear is that developers need (and deserve) to make money. So we figured a Topic Tuesday was in order, where you guys could sound off and really decide your preferred way to support your favorite developers. Personally, I don’t mind the occasional banner ad, but I’d much rather pay a couple of bucks to purchase the ad-free version in the Market. Rarely do I find myself using in-app purchases, but that’s probably because I don’t play games very often. If I did, I could see myself buying some incremental upgrades. I can say with confidence that my least favorite way to monetize is the interstitial ad, aka those full-screen, hold-you-captive ads that seem to be popular in turn-based games. Or maybe ads in my notification bar, but I’ve never actually used an app that had them.

We asked some of the And Me Staffers what they thought, and Nick Gray likes in-app purchases that unlock new features, saying:

This is a quoteNick GrayAndroid and Me

Edgar mentions buying paid apps even if he doesn’t need the extra features, something I’ve done a couple of times just to say thanks to the developers:

It is important for developers to earn money for their hard work, but it is also important for us to know we are getting a good product. I have always preferred when developers have two versions of the app available; one free and one paid. I like to be able to get a free app (with ads), that allows me to test many of the features available to see how good it is. Then I can simply pay for the full application to get the best that the developers have to offer. If the premium features are not needed, then the developer can still earn money from the free app (through advertising). Personally, even if I do not need the paid features, I tend to purchase the full app if I believe it is making a good difference in daily life.Edgar CervantesAndroid and Me

So what do you prefer?

With so many modals (paid vs free, advertising, in-app upgrades, freemium, paymium, just to name a few) for monetization in the Market, we have to ask: which do you prefer? If an app has intrusive ads, will you completely skip it? If an app has a “donate” version, or paid version with very few new features, would you buy it anyway to support a developer you believed in? Sound off below! And remember, vote on other’s comments! This is Topic Tuesday, and all points for upvotes are multiplied.

Clark is a developer living in Austin, Texas. He runs ClarkLab, a small web firm with his wife, Angie. He's a big fan of usability, standards, and clean design.

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  • dcormier

    I prefer ads to most other methods. However, use some reason when putting them in. For example, in a game it could be put on a load screen that you might encounter if you fail or when loading a new area. Most apps have some settings, so stick them in there. If you must put them in the main UI, then at least place them so that they don’t make it inconvenient to use the app.

  • DroidSamurai

    The problem of the advertisement model is that the only party that is sure to benefit from it is the ad network. Beyond that, neither the consumers, the advertisers, nor the developers benefit from it. As a consumer, either an ad format annoys you, or you pay absolutely no attention to it. As an advertiser, either you buy an ad format that will anger your target audience, or you pay for something that no one notices. As a developer, you either choose an ad format that angers your users, or one that no one would notice and/react to, which means paying you nothing.

    As you can tell, the whole dilemma is, there’s a need for free app (not everyone wants to pay for an app), but there’s no effective way to present an ad that doesn’t anger the viewers and still guarantee certain degrees of attention from the viewers that the advertisers can get what it pay for, and the developers get its fair pay.

    • bruce080

      I think I agree with this comment. I guess my opinion would be to have a free and a paid (premium) version. The advertising model is just terrible though.

    • espiandev

      I’ve found in my app that ad revenue is absolutely piffle. I put ads in the free version of my app (there’s a paid too), and the ad revenue has netted me about £30 in around 10 months. They’re being removed in the next version because I don’t enough out of it to warrant placing it on my customers. However, I am intrigued by in-app purchases.

  • uknowme

    I love free as much as everyone else. I just think it would be great if developers would put a free and a premium version of an app on the market. I’d rather pay for a full version vs getting nickeled and dimed for add-ons.

  • Jeff

    I can tell from sales of my app that iOS users are far more comfortable buying apps than Android users. Developers do need to get paid, and I personally hate apps with ads.

    • Sean Riley

      I think for the most part it is still just a matter of most users not having ever needed to add their payment info into a Google product. The movie service likely didn’t change that, but I’m really hopeful that the music store will be the gateway drug that gets people used to making purchases through the Market.

    • DroidSamurai

      I have no doubt about that. I think in general, the Android users are the think-twice kind (obviously, this is heavily stereotyped observation), while the iOS users are pay-at-1st-sight kind.

  • Justin Shapcott

    The problem with ads is that it takes a pretty massive user base to make much money off of them. I’ve released apps both for a fee and with ads. Even with small sales numbers I made way more money with the fee app than I have with the ad supported one. It can be hard to keep a mobile user’s attention long enough to make ads worthwhile. Though content heavy apps do well with ads, I’d guess.

  • charliethesuperturtle

    I would rather have angry birds free
    I payed for Tom manager though

  • Stella

    I agree with Edgar Cervantes. I prefer if developers have a free with ads or trial version and a paid app. I often buy the paid version to support the developer even when I don’t use the extra features. Overall, I like to pay for an app to avoid ads and support the development of the app.

  • Nathan

    As long as adds don’t get in the way then I’m fine like the app shazam, when I tag music or at the bottom is when the adds pop up but it does so quietly which I like

  • Lemon

    I think with in-app purchases the whole “two versions of the app” thing should die a horrible death.

    A note here, though, is that the in-app purchase should be EASILY discoverable. Caustic is an AMAZING app that takes this approach, but when I wanted to ‘upgrade’ to pro it was a pain in the ass to find. ALWAYS make it easy for me to give you money! :)

    I also think that this is a very “horse for courses” question. Plume, for example, is a fully functioning app in it’s free iteration. So the dev monetises the stream. There is a paid version (via an unlock app) that unlocks the pro features.

    Other apps though, like a keyboard app, are better off having a limited trial period, or nag messages to upgrade, since the free and pro version are effectively exactly the same.

    More than devs should make an effort to understand where their value is, and leverage that for reasonable payment.

    Now, Tim Bray is unconvinced that the “pay once for an app” paradigm is a good long term business plan. I mean, it is right now with millions of new Android users per day, but that will eventually slow. I’d be very interested in hearing monetisation strategies beyond “pay-once for a lifetime of updates”…

    • Justin Shapcott

      Yeah, Caustic has a pretty good in-app purchase flow… Trying to use a paid for feature prompts the user to purchase the unlock and makes it easy to do right then. Interestingly when I bought Caustic, I went looking for a purchase option and couldn’t find it until I happened to try to use a paid for feature.

      I think it’ll be interesting if/when developers make a transition to charging for new versions. I think it’s warranted in many cases, but I can see people getting pretty irate over it.

      • Lemon

        Yeah I think that needs to happen. Normal desktop software does it, why not phone software. Like a “genuine” jump in versions…

        • Justin Shapcott

          Wow just reread the Caustic part of your comment and it’s pretty clear from mine that I misread it. Whoops. Caustic (once you find it) makes the process easy… but finding it was a pain.

          • CausticRej

            Greetings to you both. First thanks for buying my app. Now, how can I make it easier to nudge people to the purchase button?

            There should be a nag-screen/popup that comes up every time you start the app reminding you it’s in demo mode and inviting you to purchase. Is that not enough?

            I don’t want to annoy users who are evaluating it with randomly timed popups like some of my competitors. I’m fine with people taking as long as they like evaluating it, it’s a complex app.

          • Justin Shapcott

            @CausticRej (I’d reply to you but it seems we’ve hit the nesting depth limit. It was a looong time ago that I bought it. I don’t recall any nag screen to be honest. If there is one now, then I think that is sufficient.

  • funkyblue

    I much prefer paid apps. I hate ads in apps and in-app purchases. Creating two versions is OK.
    I’ve personally purchased over 400 dollars worth of apps on my Android phone.

    Apple do have a better App Store layout and a focus on paid apps. Google do not have the focus of an iTunes account vs Google Account, like Apple. Where are the prepaid Google Cards like Apple?

    Hopefully a Music Store will fix this.

  • thenefield

    I have used hundreds of Android apps and bought well over a hundred. For ad models, and the only one that annoys is the notification bar ads. I have not had any problems with the other ad based models. I don’t mind supporting the developer. If the app is good enough for me to install and feel the need to keep it, I certainly don’t mind ads in the app. If it’s that much of an annoyance, I will buy it.

    I have not been so keen to in-app purchases. At least the ones I have seen for games make me want to uninstall. To require purchase for weapon upgrades looses my interest.

    I would also like to see Google incorporate the ability to password/PIN protect Market purchases and in-app purchases, especially on Google TV. I found my little daughter buying books from the meego app. Wish I had a way to authorize purchases especially for shared devices.

    That’s my 2 cents.

  • jonbze

    First, I love the blog.Been reading it since I first got into Android. One day, I told my wife that I wanted to start creating Android applications (my ploy for her to let me get my first smartphone). With little to no coding experience, I heard it was easy and cheap to get your developer’s license. So, stuck with my awful choice of the T-Mobile Cliq I began to learn the coding and within 6 months I posted my first application. I thought it sucked (so did a few others) but I took some criticism and made many updates, plus a few other apps.

    After a year, I struggled to make profit from something that I was doing the second I got home from work until late at night after the wifey was asleep. I put in 25 for the license and 150 for the Cliq, which also tacked on 25 a month for the data plan. Six months in I caved and spent 75 on a programming book. Swore the spending would stop, but after a year I used my wife’s upgrade for a Nexus. Another 200, plus 8 a month for insurance (which I canceled right before breaking my phone a couple months ago). Two years in and I have spent a lot more money than I convinced my wife I would.

    I tried desperately to not use ads in any of my applications. Even going as far as posting on my website that I would never put ads on any of them or make people pay for them… that didn’t last long and quickly took down the post so that I could throw Admob onto my top downloaded app. Since it is a call log, it seems highly inappropriate to have an ad pop-up when someone is simply trying to call their mama. It also seems inappropriate to make someone pay for something their phone already has. I felt screwed and limited since my programming knowledge is so limited. I first threw the ads in the settings of my apps, believe me, no one clicks on those. Moved it to the main screen and I have began to pull in decent revenue for having a pretty small user base.

    I was selling very few paid apps until I came across Tapjoy. They had some issues with their first practices but have since turned it around. They have a nice pay for download service that has really bumped up my paid app sales. They also have a great offerwall concept. The user plays a free game like Gun Bros (how I found out about Tapjoy) and when they need to upgrade their weaponry, instead of paying for the upgrade you can download another free or paid app to get gold or points toward the weapon. So for the user, the game is free, the gold or points can be free, and they are enticed to do this as benefit for gameplay. I incorporated this into my game, Colors by Numbers. The user can use the Tapjoy offerwall to get bonuses in my game, I make money off that, the ads can be minimal, and the user can get by without having to pay a dime.

    Sorry about the long read, but I usually don’t leave comments and this post really intrigued me and hit close to home being an extremely part time developer. Also, congrats to the success of photobooth!

  • KatSelezneva

    I think a paid app has an important advantage besides its price. It retains users’ attention long enough, as they have already paid for it. Moreover, if the user liked the content, there is a great probability he’ll buy new applications of the same developer. Free applications receive more downloads, but the user has no reason to go back to them if he didn’t like the apps. So, I would choose a compromise and create a free not full-functional version (or trial version) for paid application to make users to familiarize themselves with the app and to want the full version. It’s also a good stimulus for developers to create a really qualitative applications to make users pay for them. I collected some useful ideas for developing advantageous applications in a blog post How to create a successful mobile application

  • Luke Haviland

    I believe in in app advertising.
    along with the paid ad free version.
    as long as the ads don’t get in the way of the app

  • pritams

    I don’t think people would mind paying few dimes for a good app..