Has Eyeo put paid to freemium?

Has Eyeo put paid to freemium?

By Softtalkblog

December 5th 2012 at 12:00PM

Intel Developer Blog: A look at the impact ad-blocking software could have on free-to-play

Last week, Eyeo, the company behind popular advert-removing software AdBlock Plus, launched its mobile version. The app, available on devices running Android, will allow users to block all ads from reaching their devices – in their browser and in any apps that they are running. Great for consumers, but how will this impact app developers and publishers?

AdBlock Plus for PC, Eyeo’s flagship product, has seen mixed success since its launch. While the company boasts 50 million downloads, this has varied significantly from country to country. In Germany, its customers represent over 10 per cent of the country’s internet users – but this falls to two or three per cent for the UK and US.

The product and its creators have come under fire from the internet publishing and advertising industries, concerned that the software makes it difficult for websites to generate income, and harms websites attempting to provide content to their users for free. At current usage levels, experts believe that AdBlock Plus doesn’t cause a significant problem to publishers but an increase in usage to five-to-ten percent of internet users worldwide certainly would.

So what will be the impact of the mobile version?

Many developers rely on in-app advertising as their main strategy for generating revenue. In this case, software such as AdBlock would prevent ads being displayed and therefore result in no impressions, no clicks and no revenue for the developer. Other coders use ads as part of a freemium model; however, if their users are downloading a free app funded by advertising and then removing those in-app ads with AdBlock, there is little incentive to upgrade to the ads-free version. Again, no revenue for the developer.

What can developers do to get around this and ensure that they are able to generate revenue from their apps? We have a few suggestions...

1. Keep your fingers crossed

Till Faida, MD of Eyeo and lead developer for the AdBlock project, isn’t trying to put small developers and publishers out of business. According to FT.com, he says: “The main goal is to make sure that the small publishers and bloggers are not harmed by ad-blocking, so they can continue to provide their content for free.” AdBlock Plus contains a ‘whitelist’ of websites that provide relevant, unintrusive adverts that do not harm the user experience. Ensuring that any adverts in your apps are similarly user-friendly may yet grant you a reprieve from ad-blocking software, as Faida and his team will have a case to add your app to their whitelist.

2. Sell your apps

This could be the time to move away from an ad-based revenue strategy, or to change your freemium model to ensure users are paying for additional experiences rather than just to remove ads. Easier said than done, of course. If your brand and product is relatively unknown, it can be difficult to get consumers to buy. And there’s the perennial issue of piracy for any app that is succeeding on the paid model.

3. Think about other ways to monetise

How else can you get your users to part with their cash? Are there extra features users can buy to enhance their experience with your app? With games, this can be fairly simple to implement with extra levels, characters and so on, but can present more of a challenge for other applications. It may be worth your while going back to the drawing board to evaluate what paid extras you can offer your customers that will benefit you both.

4. Brand it up

What if your app were the advert? Negotiating sponsorship from one company for your application could be an attractive way forward for the commercially-minded coder. Although this might extend the development phase a little, securing a brand willing to pay for their company colours, logo and messages to form part of the game could turn out to be lucrative. Perhaps an early stage development fee and then a small additional payment for each app sold?

5. Educate users

Many consumers won’t understand the negative impact of ad blocking software, but if the people behind their favourite apps explain it to them, they might think twice about installing it. The majority of Android users want high-quality free content – perhaps they don’t realise that this could be threatened by automatically removing ads. You could use the channels at your disposal – blog, Twitter, Facebook, journalist contacts – to explain the threat.

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This blog post is written by Softtalkblog, and is sponsored by the Intel Developer Zone, which helps you to develop, market and sell software and apps for prominentplatforms and emerging technologies powered by Intel Architecture.