Dive Brief:
- Gartner’s mobile app survey found that consumers spend 24% more on in-app payments than on paying for app downloads.
- The report states this is an indication that in-app purchases and the flexibility they offer delivers a better user experience than paid-for downloads.
- The survey also found that younger groups are more confident with in-app transactions than older demographics, with 18-24-year-olds spending more than the 25-34-year-old cohort. Interestingly, among 35-44 age group, in-app and upfront spending was about equal.
Dive Insight:
"Overall, the survey results showed that mobile app users are spending $7.40 on paid-for apps every three months and $9.20 on in-app transactions, resulting in a quarter more spending on in-app transactions," Stephanie Baghdassarian, research director at Gartner, said in a statement. "This confirms that once users are confident that an app delivers the expected value without having to pay upfront, they then find it easier to spend on in-app transactions."
A takeaway for app marketers is not only is it better to focus on driving in-app revenue rather than asking for an upfront fee to download, there are demographic differences to keep in mind depending on the target audience for the app. Baghdassarian suggested app providers consider recurring in-app transactions, or premium versions of the app through one-time upgrade options. By adding features throughout the app that call for in-app transactions, it allows users to pick and choose what to purchase.
The good news for mobile app marketers is that younger users, as the report notes, are unlikely to have their expectations lowered over in-app transactions.
Baghdassarian added, "There is appetite for in-app transactions, as they allow users to 'try before they buy' and validate the offering before committing further. A great customer experience leads to users advocating a product or service; it also keeps the user a loyal and returning consumer of the service."