Smartphones and tablets come preloaded with a basic set of apps that are installed by the manufacturer or device provider. When we take ownership of the device, we customise the phone or tablet by installing apps that we use most often. This could be anything from a sound analyser to a jogging app, social media app to a photo-editing package.
Whether you have an iPhone or an Android phone, there are virtually millions of free apps available to enhance your user experience. If we look at apps from an outside perspective, there are three distinct categories, namely free apps with non in-app purchases, paid apps and free apps that include in-app purchases.
Free apps are by far the most popular, as they cost nothing to install and do not offer any form of mobile commerce. There are both positives and negatives to these types of apps. The mobile app developer who built the app has to get money from somewhere. Unless the app is open source or freeware, advertising is going to be playing a role. In most cases, the app developer will insert an advertising banner inside the app, which comes up whenever you use certain functions. Most of us can deal with slight nuisance and happily use the apps without any further thought.
The second type of apps available for download at the app stores are paid apps. These are premium apps that offer significant functions and have taken a lot of time and effort to develop. The cost of the app varies depending on how much work went into the app development, and of course, the popularity of the app.
If you have an account with the app provider like iTunes or Google Play, you can simply download and install the app and have your account/credit card debited. Once you have paid for the app, you have access to all the functions, including any updates that might come through. These apps don’t need to rely on advertising, so they have a cleaner look with less popups.
WHY SHOULD ANYONE PAY FOR IN-APP PURCHASES?
The third type of app, and the one we are going to look at is the free app with in-app purchases. Nowadays, most of the gaming and high-end apps developed by leading mobile developers like Synergo have in-app purchases. When you download the app, you should be informed of the permissions and features of the app, one of them being in-app purchasing. For those who are unsure of what this means, it basically says that at some point you can buy certain features within the app. What you can buy depends on the app itself.
We have all heard the horror stories of children getting hold of their parent’s phone and racking up hundreds of dollars’ worth of in-app purchases. So why do we say that in-app spending is the answer? Technology in any form can be abused and used incorrectly. This is especially true for mobile commerce. People tend to forget that in-app purchases are designed to make it easier to spend money on the thing you really want. All that is needed is a tighter rein on app access and securing your credit card information so that it cannot be used.
So what are the benefits of in-app purchasing? If we take a look at the stats, just 5% of users pay for in-app purchases. However, these purchases make up more than 70% of the revenue for the app itself and associated running costs. What this means is that the people who buy content within the app are making it possible for developers to create these amazing applications. If you have ever paid for an upgraded version of an app or wanted to play a game without the advertising banner, you are making it possible for the industry to exist.
ADDING VALUE TO YOUR EXPERIENCE
In-app spending is all about adding value to the specific app in whatever way best suits the user. Most of the time, in-app purchases are made on gaming apps. We have all had the desire to buy our way to the next game level or get an instant boost when we needed it most. While gaming purchases certainly make up a large portion of the industry, there are many other apps where spending is a good idea. For music or magazine subscription apps, spending within the app gives you access to content you want without you having to searching for it yourself.
CONSUMABLE IN-APP PURCHASES
App purchases can be broken down into three main categories, namely consumables, non-consumables and subscriptions. If you are smart, you will be spending your money on non-consumables and subscriptions.
But first, let’s take a look at consumable app purchases. These are purchases that can be on going. They mostly occur with gaming apps where you can buy game currency, extra health, game hints, etc. On other apps, consumables could mean buying a package export for a new file format.
There are pros and cons to consumable purchases. When used correctly, they can enhance your gaming/user experience, which is the whole point of the app in the first place. What you need to keep an eye on is how much you are spending in the heat of the moment.
Continually buying your way out of a situation can be quite costly. It is also good to remember that consumable in-app purchases are not always “hard-linked” to the app. What this means is that if the user removes the app and reinstalls it or put it on a different device, your purchases or game points will not carry through.
NON-CONSUMABLE IN-APP PURCHASES
The second type of in-app purchase is for non-consumables. These are once-off purchases that are associated with your Google account or Apple ID. If you uninstall the app or want to move it to a different device, your non-consumable purchase is available for download and recorded in your app history. Examples of non-consumable purchases include upgrading to the pro edition of an app, unlocking a full game, guide maps for certain cities, extra game characters, bonus levels and best of all, removing ads from the app.
The advantages of non-consumable in-app purchases are easy to see. Unlocking the full potential of an app gives you the ability to use all the functions which it was originally designed for. Having used the free version, you will already know just how useful the app can be and how much more you would use it if you had the full version. Paying for advertising removal is also a good idea. A lot of people tend to get frustrated with an app when the advertising banner pops up at the wrong time. By removing the ads, you enjoy the app more and get the most out of it.
When it comes to games, purchasing a non-consumable is the best way to go. Instead of buying one-off health or next level bonuses, have everything you need upfront to enjoy the game. The third type of in-app purchase is the subscription renewal, which is either automatic or regulated. Here you are paying for things like your subscription to Netflix, Hulu Plus or magazine subscriptions. Subscriptions can be set for a specific period of time, which can be anything from a week to 12 months. Subscriptions unlock content for the amount of time paid for in advance.
Overall, it is easy to see why in-app spending has made such an impact, and how mobile app developers can use it to their and the client’s advantage. This option allows for more users to utilise the app, and for monetisation to occur across the board.
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