The Case for the WordPress Plugin Freemium Model
- Updated on: 2023-08-23
- Read original article here
Truth be told, I wanted to title this article “I love Alex Denning, but he’s very wrong.”
Alex Denning is brilliant, and the work he and his team does at Ellipsis is excellent. I wish I worked directly with them way more than I do today.
Alex always has data to back up everything he says. And his data tends to come in massive amounts — not anecdote or micro experiences. Generally speaking, anyone walking into an argument with Alex Denning is often — for lack of a less violent metaphor — bringing a knife to a gun fight.
Nevertheless, here we are.
You can read his piece here, it’s good and makes a strong case.
The reason he comes to this conclusion is pretty straight-forward: New plugins can’t get found or seen via the Plugin Directory anymore because they are drowned out by the other plugins that already have millions or hundreds of thousands of installs.
The majority of his claims are supported by saying: “plugins with a high number of active installs will generally outrank plugins with fewer installs.”
He also states that freemium products only convert roughly 1-3% of their active install count. Why focus on a free plugin when you can convert way better than that with paid ads or content marketing?
I’ll address those two claims from my experience with plugins I’ve built and managed, some others I recently started managing, and conversations I’ve had with other plugin owners.
Short answer: Active install counts matter, but they aren’t everything.
Freemius did an amazing in-depth write-up on the Plugin Repository’s search algorithm after it’s most recent update (which was roughly 2017). As far as I’m aware, the algorithm has not been updated since then. The article points you to the code used for the plugin search, so you can see it for yourself.
The key takeaway is that search results are primarily created by title, excerpt, description, tags, slug, author name, contributor names, last update date, compatibility with the latest core version, number of active installs, % of resolved support tickets, and average star rating.
Meaning, active install counts matter, but it’s one of very many ranking factors.
Here’s a quick way to validate that. GiveWP has 100,000+ active installs. One of our “frenemy” competitors is WP Charitable. On virtually every term I can think of, we out-rank them because we have 10x the active installs they do, and we’re doing essentially just as good at our on-page .org readme optimization as they are.
But there’s a few terms we’re not optimizing for. For example:
Here’s screenshots to get the “today” results
Here’s my quick conclusions based on these short examples:
We’ve optimized our plugin page for “fundraising”, but not “fundraise”. The .org search isn’t “smart” like Google is. It doesn’t prioritize for synonymous terms, only explicit terms. This is why the GiveWP plugin doesn’t show up in those results at all(!).
(p.s. Yes, you’ll see a secondary plugin we built there, we optimized that plugin for that term, but GiveWP itself is not in the list.)
Additionally, the plugin title and tags have a lot of weight. So much so, that “WP Crowdfunding” gets first place over GiveWP despite only having 4,000 active installs. This is because GiveWP isn’t optimized for that term in our title. Plugin titles are very heavily weighted in search results.
You might say, “well just put that term in your title and you win”. Not really, though. Because the search also prioritizes your tags, and limits the tags that it will prioritize to five, you have to focus on those five only. If a term is tangential to what you offer, it’s not important enough for you to optimize for it, and that’s an opportunity for plugins to take advantage of.
So concerning the claim that the Plugin Repository doesn’t surface new plugins because they get out-ranked by larger plugins, I say that’s a factor for sure, but not entirely true.
Yes, for terms like “SEO” or “Forms” there are a lot of plugins now that have tons of active installs and they all show up first.
But here’s a few terms that are highly relevant and their averages are far lower:
While there are some results on those pages that have very large install counts, the first results of each have relatively low active install counts. These are relevant search terms for growing business segments that seem clearly underserved in the WordPress ecosystem. And I literally just typed that list up off the top of my head in 2 minutes — with a tiny bit of market research I’m sure we could find large business segments entirely underserved on .org.
Here’s another interesting example: “Live Video“. If we just do the math on active installs the number is very high. But why? Because plugins like Elementor (5M+) and Duplicator (1M+) show up in those results. Those are obviously not relevant results for that search term, they are the result of a not particularly smart search algorithm. Also note of course that while they are showing up they are not the top results.
If you are a WordPress user in need of a streaming video plugin browsing through “Plugins > Add New” in your admin, you’re not going to install Elementor instead of WP Stream. Users are smart like that, much smarter than we give them credit for sometimes.
I’ll keep this one short and sweet: false.
It’s easy for me to speak from the GiveWP perspective and say that to date we’ve converted roughly 27% of our active installs into annual recurring customers. But Alex believes anything over 100K active installs is “elite” and doesn’t apply to new plugin authors just getting started. Fair enough.
Orderable is a plugin and team I recently started working on. James Kemp is a great innovator doing interesting things in the WooCommerce space.
Orderable is a freemium plugin that launched early summer last year, right around the time of its acquisition by StellarWP.
It recently passed 1,000 active installs and I can tell you that it’s converted roughly 18% of those installs to active paid users to date.
Alex would push back and say that Orderable has had the marketing strength of the StellarWP team behind it to account for that, as well as WP Crafter. That’s true to some extent. Being totally transparent, we’re only just starting to put overdue attention on Orderable, so I’d expect a lot more growth there — make sure to keep your eyes open for that!
All that to say, I don’t believe that the work we put into GiveWP in the early days, or the work put into Orderable required a massive amount of marketing to bring their early successes. In contrast, I do believe that the Plugin Directory contributed to their success as a funnel in a significant way.
I have some counter-claims, but before I get there it’s important to acknowledge a few significant hurdles in today’s free plugin landscape.
I agree that the Plugin Directory used to have a massive impact on new product owners. You could write a plugin, launch it on .org with a catching logo and name and start seeing the install counts grow. It’s less so now than before. But that doesn’t mean it’s not still viable.
I agree that some types of plugins have tons more competition now than previously. Launching a brand new form plugin will be a massive challenge. In contrast, have you seen Rank Math recently? For years and years, All-in-One SEO and Yoast seemed impossible to compete against.
OK, so I’ve shown that lower install count plugins can indeed get found on .org. I’ve also shown that freemium products can convert at a much higher rate than 1-3% of their active install count.
Besides those two claims there’s quite a bit more to take into consideration when considering the strength of having a free plugin on the Plugin Directory.
Alex’s answer to the difficulties of the Plugin Directory is that WordPress product businesses should go premium only, focus on more lucrative marketing tactics like SEO and paid search.
What he’s not acknowledging there is that just as it’s gotten harder to compete on .org, it’s gotten equally hard to compete in Google Ads or social feeds or email marketing.
The WordPress marketplace is getting more mature and more lucrative which naturally means more competition. Four or five years ago, if GiveWP bid on Google ads for “WordPress donation plugin” (a relatively niche term) was very low, roughly $1 to $1.50 cost per click. Today it’s over $6.
Email marketing is also still a very strong marketing tactic, but people’s inboxes have never been fuller. It’s a real challenge to provide your readers with true value so that they open your emails when you send them.
I also agree with Alex in the sense that every plugin that wants to have success today has to do good marketing. In the past, good developers could build functional plugins that were an eyesore and make money on them. No longer. Marketing and good UI/UX is a must. But that reality has nothing to do with whether the Plugin Directory is a good funnel or not.
Your plugin being on WordPress.org often is the best way to get better organic results.
This is one thing that not enough free plugin authors think about. As much as we focus on making the plugin readme work for the .org algorithm, we also have to have an eye towards optimizing that page for the Google search algorithm.
This goes to the question of “discovery”. How are new users discovering your plugin? Is it only through “Plugins > Add New” or is it also search engines? The obvious answer is both.
Because it’s both, you can’t ignore the domain authority of WordPress.org. When it comes to searching for WordPress plugins they are going to outrank your website for your most important interest terms 10 times out of 10 for at least your first few years.
This is also related to the question of “discovery”. Where do your users learn about you? Is it because you built a website and paid for ads? Or is it because they’re already in their WP admin and went to “Plugins > Add New” and installed your plugin months ago?
I’d argue in many, many cases, they installed your plugin and weeks later they need documentation or have questions and just plug your brand name or product name straight into Google.
If you want to know more about how effective your free plugin is, start paying close attention to your branded search terms in Search Console, Ad Manager, or other terms like Semrush or Serpstat.
Finally, Alex’s conclusion is that premium-only products are the only ones that make sense today. I can’t disagree more. For one very simple reason: try before you buy.
Customers today want to be informed and know what they are getting into. Free plugins are a way to get your future customers into your funnel with little effort on their part. It’s actually the LEAST amount of effort for them — they don’t even have to give you their email (which is a whole ‘nuther subject)!
For example, Jason Coleman of Paid Memberships Pro recently did an A/B test of showing their free option on their pricing page or not. Guess which one actually converted better in the end? (hint: it rhymes with FREE)
Alright, that’s my case. I believe in freemium products and I believe there’s a big, wide, lucrative future for them.
If you want to be successful launching a freemium product on WordPress.org here’s a quick list of my tips:
