Free value-added and insert ads, who is the king?

Absrtact: Mobile analytics company App Annie and IDC reported data from the latest report that last year mobile apps gained 211% of revenue growth through free value-added services. It seems that free is always useful. Top 1 in Google Play and Apple App Store

Data from Mobile Analytics Inc. App Annie and IDC show that mobile apps gained 211% of revenue growth over the past year through free value-added services.

It seems that "free" is always useful.

Of the top 1000 apps in Google Play and Apple app stores, 83% of apps use the free value-added model, and 92% of the 2000 total applications come from free value-added.

In mobile applications, free value-added includes a wide range of application buying activities. For example, upgrade, accelerate, purchase additional features or content, extend application time, pay for advertising and so on. Take the New York Times application as an example, free users can read part of the article, and some articles are only open to subscribers.

In a survey by app Annie about whether to use the free value-added model, 2000 game developers surveyed agreed to this pattern.

For engineers who rely on free value-added to generate revenue, the main goal is to attract as many users as possible. And after the establishment of the user base, to facilitate the purchase of as many free users. Although the data show that less than 5% of engineers claim that more than 30% of users are buying.

The US market remains the largest contributor to mobile application revenue, with sales growth of 1.7 times-fold last year. Although Japan, South Korea and India are up to 2.2, 2.3 and 3 times times respectively, but because of the small base, the absolute value of the revenue is still not comparable to the United States. But India's mobile-app revenues are expected to reach 870% by 2013 in 2017.

Less than half of the developers surveyed said they had inserted ads in their apps. It is not easy to make a profit by inserting ads, and the average application can earn a few 10,000 dollars of monthly revenue.

Only the most popular apps, such as Flappy Bird, are likely to reach 100,000 dollars a month in advertising revenue.

The current research data show that mobile applications will exceed the total advertising revenue in 2017. IDC's data predicts that, as of 2017, advertising revenue in each major mobile market will grow substantially in proportion to its total mobile application revenue, with the US market growing at 60% per cent. In addition to Japan and South Korea, other markets such as Germany, France, Brazil and other countries will exceed the proportion of 50%.