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What is an In-App Purchase?

An in-app purchase is a package of premium content that is sold via an app. IAPs are 100% virtual. That means that the entire buying process, including the order, the payment, and the distribution happens online. Thus, a physical good like a shirt is not an IAP.

Categories of In-App Purchases

The App Store and the Google Play Store distinguish different categories of IAPs:

Consumables

A consumable item gives users a one-time benefit. So after using it once, it disappears.

Especially in freemium games, users can buy premium currencies like “Gems” in Clash of Clans. These currencies allow users to speed up specific game mechanics or purchase special items that give them advantages over other players.

Another example is an in-app purchase called “Superlike”. This item gives users of the dating app Tinder the ability to attract another user’s attention.

Non-Consumables

The opposite of a consumable is a non-consumable. Non-consumable IAPs do not disappear after using it. So after buying it, users can permanently enjoy their benefits.

Typical non-consumables are:

  • bundles of information, for instance, a pack of recipes for a cooking app or a collection of exercise tutorials for a fitness app
  • additional items for a game, such as the “Wave Rider” or the “Sleigh of Awesome” in Jetpack Joyride

Subscriptions

The third kind of in-app purchases are subscriptions. Users who buy a subscription unlock a set of features or content temporarily. They can use these features or consume the content as long as the subscription is valid. After the subscription expires, the content will be locked again.

Subscriptions are typical for news apps. They give users access to restricted content like in-depth articles or opinion pieces.

Another common type of subscription simply removes ads from an app.

The Importance of IAPs for App Store Optimization

IAPs are metadata elements that impact the visibility of apps. Actually, they consist of three different metadata pieces:

  • the IAP title
  • an IAP icon
  • a brief IAP description

For App Store Optimization, especially the IAP title is crucial. The reason for its importance is that both the App Store and the Google Play algorithm index the titles of non-consumable and subscription IAPs. So if they contain keywords, the algorithms will rank the app for these terms. Even more important, the app will also rank for long-tail keywords that are combined from terms in the app title and the IAP title.

To benefit from this mechanism, app owners need to promote their IAPs. This is a technical process that is performed in iTunes Connect.

In addition, in-app purchases can impact the conversion rate on iOS. As they appear on SERPs as well as on the product page, they can help convince users of downloading an app.

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