The new app economy: a fast-track to Freemium Town

Train freemiumFirst things first: we’re wishing you a happy, successful and (let’s make it) fun year ahead!

A couple of days ago we announced that we were going to increase the online presence of AppLift in 2013. Beyond regular company and industry news, we’d like to use our position as the first CPA network dedicated to mobile games to bring you informative and insightful content to help you acquire and efficiently monetize your users. Let’s grow the mobile space together!

In the last couple of years, we have witnessed a split between acquisition and monetization for mobile games, brought about by the rise of the freemium (or free-to-play) model. Although somewhat counter-intuitive, it has proven to be the major revenue-driver for mobile games in 2012 and it is likely to stay that way in the future.

The purpose of this post is to help developers and publishers with paid apps make a smooth transition to the proven freemium model, with some handy tips and tricks along the way. This includes making the most out of the AppStore’s capacity to support price-drops to zero (that’s where it gets most interesting).

It can also be a challenge to achieve successful monetization strategies with free mobile apps and there have certainly been failures along the way. But with paid apps, today it’s nearly impossible to successfully monetize. While there are a few notable exceptions that immediately come to mind, they tend to prove the rule; namely, that free apps monetize the best. Take a look at the iOS top grossing charts, and count the number of paid games. Very few make it there.

Overall top 40 in the US AppStore on 1.8.2013 (click to enlarge):

appstore grab

So although it may conceivably be nice to get the cash upfront, especially when you’ve put so much effort in developing and marketing a great game, evidence shows it’s hard to succeed with a pure premium approach.

First, you’re likely to drive a lot of people away by offering them an unmovable price. Second, you’ve laid all your cards on the table before the game has even started. Upfront payment (as low as 99c) can work for very well branded and well marketed products with great appeal and notoriety, or for luxury products which convey a feeling of exclusivity. However it’s not suited for apps that are targeting a mass market audience without that brand recognition.

And yet going freemium is not easy and the challenge of making a great free-2-play title that monetizes well shouldn’t be underestimated. But, if it’s done properly, it can turn out to be very profitable and very successful. In the current app economy, you need to give before you get, and free-2-play is the way forward.

Here’s our list of steps to make the most out of the transition:

1. Before departure, pack well: strive to make the best game ever, and think ahead.

Initially, if your app is still paid, you don’t need to have monetization items in your game. Building a solid, loyal user base and offering them good value is an important stepping stone to making a successful transition. However, it’s important to have an idea of how you’re going to implement these items in the future, because you’ll need to engineer as smooth a transition to freemium as possible in support of your existing user base.

2. First stop: Releaseville

When you first release your game paid, the price should be a sensible assessment of your overall product. Your release strategy also needs to offer an opportunity for serendipity and luck, as there is always a slight chance your game might take off on its own, or, better still, get featured by Apple. Launching midweek, when there is less competition and journalists are most receptive to emails, is one way of increasing your chances.

To ensure that your product is most prepared for the market, pay attention to all aspects of AppStore marketing right from the start: from the iTunes landing page to the icon, screenshots and description. It’s especially important since the launch of iOS6 where visual real estate on the AppStore is at a premium.

Update on 1.10.2013: Apple announced that from now on screenshots will be locked once the app is approved, and require an update to be modified. This stresses the need to have all your AppStore assets ready from the beginning.

You could even try a first price drop, albeit not to zero (eg. from PT2 to PT1), to test your game’s appeal and get familiar with the price-drop mechanics. Make sure you watch your KPI’s closely during the drop, and see how they respond.

3. It’s not (only) the destination…

At the same time you test your paid game on the market, you should already begin to prepare its metamorphosis and decide on your monetization strategy: should you go for in-app purchase items (IAP), ad offers, or both? Which part of the game should make the core of the user experience? How abrasive should your IAP be? How should you manage ad placement? It’s important to have these elements figured out from the start.

We’ll have more on app store marketing and monetization strategies down the road, so stay tuned!

4. The final stretch: drop to PT0

When you drop the price of your app expect some mixed fortunes to start with. The good news first: you’ll get traffic, hopefully a lot of it, to your app. The bad news: you won’t monetize it; at least not just yet.

The higher the price-drop, the better the value for users. However, be aware that some price-change scraping algorithms are programed to factor in and detect this kind of strategy, so remember to leave some time between the paid release and the price change.

5. Last stop before arrival: why content is king

By dropping your game’s price to free, it will probably be picked up by the bots and algorithms screening and scraping the AppStore for paid-for-free apps – the generic name for discovering previously-paid apps made free. This in turn will increase your chance to be featured by influent blogs, app discovery services as well as promo apps; for them, content is paramount because good game content helps the retention of their own audiences, which they themselves need to monetize:

(courtesy of AppTicker)

It might seem obvious, but in order to increase your chances of benefiting from such a godsend, you need to have top-notch content and user experience in your game in the first place. Content really is king.

Once you have received some good traction and started building a solid and engaged user base, it’s time for the next and final step.

6. Final stop: Freemium Town, all change!

When you submit your update don’t make Apple review time a variable, as it could take up to a couple of weeks: plan your update, submit it and have it approved as soon as possible; a technical detail: you don’t have to release it immediately as you can leave it on “hold for developer release” for as long as you need – so get approval early and launch when you’re ready. Also, add some awesome new free features you can communicate on in the update notes.

Ready, Steady, Go!

You’ve arrived at the destination: the time has come to release your updated freemium app into the wild –  good luck and don’t forget to keep a close eye on those KPI’s!

Summing up:

1. Don’t compromise on the quality of your game experience – paid or free – strive to provide value.
2. Release your app paid, and optimize your AppStore marketing right from the start.
3. Think about your in-app monetization mechanisms early in the process.
4. Get the update approved as soon as possible.
5. Drop your app’s price to free and watch your KPI’s.

Questions? Ask us! @applift

About Thomas Sommer

Thomas heads up content marketing at app marketing platform AppLift. As such he’s in charge of sourcing, curating, creating and distributing insightful content to increase the company’s visibility and thought leadership. Thomas loves to scrutinize the relentless and thrilling developments of the mobile industry. Connect with him on LinkedIn or Twitter to continue this conversation.
This entry was posted in Android, freemium, Games Marketing, iOS, Mobile Marketing, Smartphone, Tablet and tagged , , , , , , , , , , . Bookmark the permalink.

1 Response to The new app economy: a fast-track to Freemium Town

  1. I have read so many articles or reviews about the blogger lovers however this post is in fact a nice article,
    keep it up.

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