Pricing Privacy
Peeking into privacy-centric decisions of users
From anecdotal evidence, I’m pretty convinced that that world at large is concerned with their privacy. Between periodic outbursts against the latest ad-supported monetization schemes to larger questions about what constitutes private data, it’s fairly apparent that people value privacy. But the question of “at what cost?” is rarely asked and — even more rarely — answered. So I did the obvious: I built an app, called Peekr, to find out.
The Premise
The central question that I wanted to explore was how much a user would be willing to pay for the right to consume content and in what currency. To do that, I built Peekr as a simple game. Here are the rules: solve a puzzle correctly, and you get to see a picture uploaded by another user; solve a puzzle incorrectly, and one pictures selected randomly from your camera roll for upload.
At this point the user is faced with a decision: she can upload the randomly selected picture or she can use a ‘photo bomb’ to keep the picture private. Once all available photo bombs are used up, the user is faced with a new question: does she wish to purchase additional photo bombs to continue consuming content?
Err, You Mean Creepr, Right?
By now, you (and I), are probably assuming that no one would use an app such as this. The risk to my camera roll just isn’t worth it! You (and I) would be wrong.
To date, the average user is viewing 35-40 pictures (i.e., solving a puzzle and then viewing the related picture) and uploading about 10 pictures.
I Bet the Photo Bombs Are Really Expensive
I launched Peekr on April 17th, 2014, with a fairly straight forward price chart. Two photo bombs would cost $0.99, with larger bundles available at a maximum discounted price of $0.12 per photo bomb.
I quickly learned that $0.12 per photo bomb was too expensive for everyone. Over the two weeks that followed, not a single person purchased additional photo bombs. So I did what everyone does: advertising.
I didn’t want to use banner ads, because banners ads are passive. Instead, I signed up with a fantastic company, called Tapjoy, to introduce an offer wall into teh app. By simply completing a subset of offers (e.g., signup for Hulu, download a free app, etc.), users could acquire additional photo bombs. Unfortunatley, I had zero transactions after another week or so in the App Store.
It was time to move to a point-based currency. In the next release, I introduced “coins.” Coins were earned in one of three ways: solving a puzzle correctly, sharing Peekr with friends (e.g., direct message or social media), and completing offers from the Tapjoy Offer Wall. At this point, I finally had users engaging in transactions related to photo bombs.
Interestingly, the majority of the transactions favor paying with ‘privacy’ (i.e., uploading a picture) to gain coins. A few people share with friends to get coins, as well. Almost no one, however, is using photo bombs to keep their pictures private.
In fact, as of today, photo bombs are used around 5% of the time.
Peekr is a work in progress, and I’m going to save a more in-depth analysis for a later date. That being said, I find that Peekr has already raised a few interesting points. First, the price tolerance for protecting one’s privacy is pretty low. Second, the price tolerance is so low that virtual goods act as competition. Finally, the type of content doesn’t seem to matter; users are uploading diverse types of images: text message screenshots, dogs, cats, kids, and more.
How Can I See What People Are Sharing?
