Why micropayments are a great way to monetize an app

For many years, micropayments have been an almost perfect solution for publishers. It was micropayments that made it possible to receive a certain income, and sometimes it was very substantial. Especially actively, this method of monetization began to be used after the appearance of ad blockers. Nevertheless, micropayments are far from the most effective way to profit from digital content.

Over the years, publishers have tried many hundreds of different strategies and methods to make micropayments a popular monetization option for publishers. But almost all of these methods were ineffective. But 15 years ago, Clay Shirky called micropayments ineffective, because, in his opinion, “users hate them.”

One reason is that the user must make a decision before taking advantage of this opportunity. “Users want predictable and simple pricing. At the same time, micropayments complicate the life of the user, as he has to deal with a bunch of small, unpredictable transactions, ”wrote Clay.

In general, the heyday of micropayments has passed, especially if you do not think about retail purchases in Chinese online stores and talk about content publishers. But there is one direction where micropayments not only did not disappear, but even began to develop rapidly. This area is applications for mobile devices, namely, in-app purchases. Most often these are in-game purchases (game currency, additional weapons, abilities, etc.). People want to improve their results in a game, and IAP (in-app purchases) is the perfect way to do this.

According to studies, the IAP market now stands at $ 14 billion., and by 2017 it will increase to $ 36 billion. Plus, most of the applications that use IAP also contain advertising as an additional mechanism for monetization. By the way, Appodeal is successfully operating in this market, and can help the developer to receive additional funds. As for IAP, the transactions here take place almost instantly, and the user immediately receives what he wants. IAP, by the way, is a much more effective way to monetize an application than the “pay and you won’t see ads” method. This is largely due to the fact that the person paying for the in-game product (or some additional function of the application) understands well what he pays for.

At first glance, traditional advertising and IAP are similar. People who click on ads, or those who buy something inside the app, pay for certain content. The application developer is interested in ensuring that users are as loyal as possible and pay for additional features. And here IAP has a number of strengths:

• The user knows what he pays for;
• He does not have to think about buying too long;
• Conducting a transaction is quite simple.

The combination of regular advertising and in-game purchases, provided that both methods are correctly used, can bring (and bring) the developer excellent profit. Judging by expert forecasts, the micropayment model will flourish for a very long time, at least until some new, even more effective way to monetize the application appears.