Can Virtual Rewards Keep Mobile App Users Engaged?

A recent study found that 26 percent of mobile apps downloaded last year were used only once, a warning to developers that app downloads don’t equal long term engagement. But what if a developer or publisher could incentivize extended engagement through a virtual reward system? That’s what Tapjoy, an app distribution and monetization company, hopes to find out.

The company is launching a new pay-per-action service that allows app makers to offer virtual currency or goods to users who complete actions within an app. A developer or brand could offer a reward for completing a tutorial or getting to the second level of a game or uploading a photo. Essentially you’re getting paid in scrip to play the game. The idea is that incentives laid out inside the app can keep people tuned in and help turn them into more loyal and potentially more lucrative customers.

The pay-per-action service builds off of Tapjoy’s pay-per-install service in which app developers offer virtual currency and goods to users who download an advertised app. That service has proven to be a good alternative payment system for users who want virtual goods and currency but can’t or don’t want to pay with a credit card. Pay-per-action allows developers to use those same goods to keep people marching through an app instead of walking away. Tapjoy is partnering with Apsalar, an analytics company that is providing the in-app behavior tracking portion of the pay-per-action system.

It’s an interesting idea, though its usefulness will be limited to mostly games that make use of virtual goods. The bigger play would be if the system can tie into more real world incentives. But it makes sense to try and use rewards to keep people engaged. We’re seeing that badges and titles can have an effect on some users in apps, motivating them to keep using the software. But being able to offer a wider variety of rewards is one way to keep users moving deeper into a game or program. Churn is a major issue for developers, who are finding that app users are quick to move on to another app if one doesn’t keep their interest. It’s not enough to get installs if users just abandon the app. That’s the reality of apps; their simplicity is part of their appeal but it also makes them disposable especially as entertainment. Developers still have to work on design and the user experience but having another tool in their belt can be helpful if employed well.

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