Nexus 7's most important feature is the $25 credit

A Google Play store credit will help train its users to pay for digital things, giving the Android ecosystem a boost.

Buying digital goods is weird!

Okay, maybe not to us. But to a lot of people, the concept of clicking a button to deplete your bank account in exchange for adding a new item to a virtual list somewhere is still dubious and alien. This is understandable: we as a society have provided extensive training to make virtual exchange of debt feel real – a sort of bank account proprioception – but are only just beginning to handle the same thing for virtual exchange of goods.

At the I/O 2012 keynote, Google announced one way it plans to solve this: training wheels. Specifically, it intends to provide a $25 credit for the Play Store with the purchase of a Nexus 7 tablet.

When a user who has never before purchased an app heads to the Play store to consider a paid app, they are confronted with the task of deciding whether the app is worth it. This decision is carried out in two steps: first, figure out what the app is worth, then compare it to the stated price to determine if it’s a good deal. This is a reference activity for which first-time users have no precedent, nor a pre-purchase experience in which they are explicitly asked to evaluate the monetary worth of that object.

It’s important to note here how free and Lite app downloads, while often very good indicators of full-version downloads, do little to break this threshold for first-time users. One reason is that use of a free app is rarely done with the task of determining a monetary value as the active one in a user’s mind. Sure, individuals may start the buying decision process that way: I’ll head over to the store, find the lite version, download it… then also get a wave of update notifications, deal with those, start checking out the new app… authorize it, and again… okay, now how does it work? The three lines in the corner… hmm, well, no, that wasn’t… ah, maybe if I click on my own name in the corner? By the end of it, a developer is lucky if the user even remembers that they were evaluating the paid app, much less that they actually complete the task.

Contrast this to a physical store. These berries look great. Oh, $4.99 a box? The task of evaluating the worth of the item is usually the primary task at hand, and there are no intermediate steps to distract you from it.

Because first-time users haven’t been primed to hit the app store with a concrete valuation in mind for the app they’re about to buy, and because they don’t have previous experiences to provide guidance, the purchasing decision is one fraught with uncertainty. The price has little relevance here: the uncertainty trips an evolutionary alarm, and the second part of the purchasing decision suddenly goes negative: Is this a bad deal? Am I getting suckered here?

At this point, in physical transactions, a helpful salesperson will offer reassurances for larger items, or in the rare cases of physical items that are as complex as software but still inexpensive enough to not merit salespeople, the purchaser will at least be able to heft the item, reassure their panicky hindbrain. On a phone or a tablet, they’ll just go check email.

Apple has circumvented this in part by getting to the App Store by way of iTunes, which trained users that purchasing digital goods was a sane thing to do (and, incidentally, set pricing expectations for apps). Amazon did the same thing with the Kindle, and with a decade of earning user trust as a site with good deals on it. Google, on the other hand, has no such relationship with many of its first-time tablet users, and it shows in very low ARPU relative to the other two big app stores.

The $25 in Play money should go a long way toward fixing this problem. By reducing the psychological risk involved in trying that first app purchase (it’s not my money), they’re giving users an opportunity to practice the skill of evaluating an app’s worth. And, since the Nexus 7 is available through the Play store, users will also have an account on the device with valid payment information so that they can smoothly transition to spending their own cash – and not just on the Nexus 7, but over all of Google’s products, and those of its partners.

Obviously, this would be great for Google, but it may be very good for the Internet as a whole, too. Monetization schemes like ads and in-app purchases get around the purchasing problem, but distort incentives by prioritizing the capture of user time and attention over actually delivering value. I’m hopeful that this move will help increase the number of developers who can make a living by directly improving people’s lives, instead of just distracting them from it.


Steven Robertson makes things for people who make things for people. more...