A report shows the average price of in-app purchase has increased 40% on iOS since last year, and one of the main reasons is Apple’s App Tracking Transparency function that it’s making it more expensive to reach the right users.
For once, inflation is happy to not be at fault for a change. According to the Apptopia report, the in-app purchase price increase on iOS comes much before inflation hit hard in 2022. For the Google Play Store, for example, that’s exactly why the costs increased 9% year over year in July.
The report said that this rise could be “publishers reacting to increased effective cost per install (eCPI) due to Apple’s App Tracking Transparency policies making it more expensive to acquire users.”
The report added:
Prices have risen significantly more on the App Store than Google Play, so we wanted to determine if all IAPs were affected equally. It turns out that single-purchase IAPs (maybe a new skin in Tennis Clash) increased much more than IAPs for monthly or annual purchases (maybe full year access to Headspace). Average pricing of iOS single purchase IAPs rose 36% YoY in July while annual + monthly IAPs increased only 19%. Publishers are trying to present a value and hook customers for longer to cut down on acquisition costs.
It’s interesting to note how Apple’s App Tracking Transparency policies have been taking effect on developers and other companies. A few months ago, Facebook/Meta reported its first-ever quarterly revenue drop. In July, the company highlighted challenges faced by US companies as well as worries of recession, but Wall Street analysts believed TikTok’s competition and Apple’s privacy changes were the real concern for the company in the near term.
In another report, covered by 9to5Mac in April, this was long foreseen, as big tech platforms’ revenue could drop by almost $16 billion due to Apple’s App Tracking Transparency.
ATT requires that applications ask permission from users before tracking them across other apps and websites. For example, when you open the Facebook app, you’ll see a prompt that says the app would like to track you across other apps and services. There will be two options from which to choose: “Ask App Not To Track” or “Allow.”
While it’s not clear if in-app purchase prices will continue to increase on iOS, developers will sure have to try another method to keep growing their business while bringing enticing features for iPhone users.
How do you feel about Apple’s App Tracking Transparency feature? Share your thoughts in the comment section below.
Author: José Adorno