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Industry chatter about AR’s world-changing status sometimes outweighs evidence that it’s captivating consumers today. Though we see some signals, such as engagement figures from mobile AR players, we’re often flying blind when it comes to consumer AR sentiment.
Looking to fill that gap, AR Insider’s research arm ARtillery Intelligence asks consumers directly how they feel. Working with consumer survey specialist Thrive Analytics, it wrote questions to be fielded to 50,000+ U.S. adults, and produced a report – now in Wave 9 – based on the results.
Among the topics: How is mobile AR resonating with everyday consumers? How often are they using it? How satisfied are they? What types of experiences do they like most? How much are they willing to pay for it? And for those who aren’t interested in mobile AR….why not?
After the last installment of this series examined consumer satisfaction with mobile AR, we now move on to another area of the survey: price sensitivity. How much are consumers willing to pay for mobile AR apps and experiences? And how does that differ between user segments?
Demand Signals
An important question in mobile AR is who pays for it? Because it’s early and unproven, consumers largely aren’t buying AR experiences. Instead, as we often say in our reports & analysis, most mobile AR is brand-sponsored (e.g., sponsored lenses) versus user-purchased.
But we still wanted to see how much consumers are willing to spend on mobile AR apps and experiences. The answer differs between existing users and non-users. Starting with users, 57 percent say they’ll pay $1.00 or more for AR apps. And 19 percent will pay $5.00 or more.
These results represent strong demand signals, considering price elasticity in the broader mobile app universe. We attribute this to the same factors explored in the last installment regarding AR satisfaction. High satisfaction with AR logically correlates to more willingness to spend.
Going deeper, the most popular price point (22 percent) is $1.00 to $3.00, followed by $5.00+ and in-app purchases (IAP). The latter involves free-to-play apps that offer optional purchases throughout the experience – the most popular example historically being Pokémon Go.
Though Pokémon Go has waned in popularity, IAP’s popularity is due to its low barriers to adoption. Given AR’s early and unproven state, free apps with optional in-app purchases provide a softer landing for AR. And they follow an established model from mobile gaming.
Big Difference
Moving on to non-users, how much are they willing to spend on AR? 19 percent would pay $1.00 or more, while 8 percent would pay $5.00 or more. This is a big difference from the AR user sentiments above, where (again) 57 percent will pay $1.00+ and 19 percent will pay $5.00+.
More worrisome is that the greatest share of non-user respondents (53 percent) is unwilling to pay any amount for mobile AR experiences. But this stands to reason, given that – as we’ll examine in a future installment of this series – most non-users are uninterested in trying mobile AR.
Furthermore, those willing to pay for in-app purchases after downloading a free app declined 8 points from the previous wave. This is noteworthy because in-app purchases had consistently performed well among AR non-users in previous survey waves, but declined sharply this year.
So why did this figure decline? It could be due to the waning popularity of the AR market’s leading venue for in-app purchases, Pokémon Go, as noted above. We will watch closely to see if this pricing tier remains at depressed levels in next year’s survey, or if it rebounds.
We’ll pause there and pick things up in the next installment with more consumer survey results and insights. Meanwhile, check out the full report here.
Header image credit: Yura Fresh on Unsplash