Why apps must be free
Over the last five years, few things in the world have grown as fast as mobile applications.
Mobile apps have grown faster than the desktop Internet ever did. Even the number of Lady Gaga’s Twitter followers has struggled to keep pace.
More than 7 billion apps were downloaded in 2009, a number that is expected to grow to 50 billion by 2012.
An article in The Wall Street Journal estimated that global revenue from mobile apps could increase to $17.5 billion by 2012, up from $4.1 billion last year.
Apps are growing fast – and every indicator points to the fact that they will grow even faster.
However, this rate of growth can only be maintained if app developers are able to keep their apps free. This is because consumers like free apps. Or, to state it more accurately, they really, really like free apps.
In a 2011 Harris Interactive study, 95 percent of U.S. adults said that they prefer free apps to paid apps.
Even more affluent consumers said that they prefer free apps. More than 96 percent of U.S. adults with a household income of $75,000 stated that they prefer free apps.
The implications are clear: app developers and publishers have to depend on ad revenue for monetization, so that they can keep apps free.
As has been demonstrated by search advertising, consumers do not mind advertising – as long as it is served in a way that is relevant and useful to them.
Both app developers and advertisers can derive significant advantages by providing a relevant and respectful advertising experience.
Developers will make more money if more people interact with advertising in their apps and this extra revenue can keep their apps free.
This, in turn, will increase the number of app downloads, enabling advertisers to get more reach from their mobile campaigns.
However, many mobile advertising solutions fall short when it comes to providing users with an optimal experience. This is because many mobile advertising solutions in the market are click-based.
Typically, mobile advertising banners appear while the app is in active usage. Upon clicking on the banner, the user is kicked out of the app to a clunky browser, making for a poor user experience.
To compound matters, most people click on mobile ads by mistake.
The 2010 Harris Interactive study also found that 47 percent of U.S. adults say they click on mobile ads more often by mistake than they do on purpose.
You know what I am talking about: One moment you are reading about a revolt in the Middle East, the next you are looking at a spindle tracking the slow passage of time as the Web site for a belly-fat-reducing product loads ever so slowly on your mobile browser.
The ideal mobile app advertising solution will, at the very least, accomplish two criteria.
First, a user-focused mobile app advertising solution will allow users to interact with advertising without leaving the app.
Apple CEO Steve Jobs focused on the importance of providing an in-app advertising experience during the iAds launch.
Speaking at the iOS conference, he said, “Most mobile advertising does not work because it yanks the user out of the app.”
The Apple iAds model allows users to engage with the advertising without leaving the app.
Over the last year, there have been other mobile advertising solutions that keep users within the app.
Signup ads that enable users to opt-in to their favorite brands recently crossed 115 million app installs on the Apple and Android platforms.
The New York Times app recently deployed a very effective advertising solution on its mobile app that enables users to hit a prominent “Skip” link and go directly back to reading the article.
In addition to providing an in-app advertising experience, both app developers and advertisers should pay attention to when their ads are being served to users.
Given the relatively small form factor of most smart phones, ads that are displayed during active app usage are prime candidates for accidental clicks.
Game for ads
Nowadays, there are several app developers and advertisers who are serving ads at non-intrusive points in app usage.
The popular TuneMe Android app allows users to record their voice so that they sound like popular artists.
The app developer serves signup ads when the song is being processed – a period of “downtime” when the user is not actively interacting with the app.
Also fast disappearing are the annoying banner ads that occupy prime real estate during game apps.
Game developers such as Brisk Mobile serve ads between game levels when the user has taken a breather from defeating a powerful medieval enemy or solving a complex puzzle.
The growth of mobile apps will likely continue unabated.
However, both advertisers and developers need to focus on giving users what they want: a respectful, relevant and non-intrusive user experience for free.
Mobile app advertising solutions that work for the user are what will work for the developer and the advertiser. The rest of them will be consigned to the dustbins of a very rapidly written history.