Non-advertising-based mobile apps face several critical challenges when trying to monetize their free services—among them, the choice of pricing strategies (hard landing vs. soft landing; i.e., a “pay or churn” paywall vs. continuing to offer limited free services to existing users after monetization) and aspects of product design (whether to provide exclusive secondary offerings to paying users). The authors implemented a large-scale randomized field experiment with an app firm to test the causal effects of such pricing and product design strategies. Results show that both soft landing and exclusive secondary offerings decrease existing app users’ willingness to subscribe, but there is a positive interaction between these two strategies on subscriptions. The authors propose a theoretical framework, discuss potential mechanisms that might be at play, and conduct robustness checks to rule out several alternative explanations. A customer survey by the firm and an experiment on Prolific provide further support for the theoretical mechanism. To assess generalizability, the authors conducted a second field experiment and obtained consistent results. They also report the results from the actual implementation of the best-performing strategy by the firm. This research provides guidance on possible theoretical underpinnings of users’ responses and important managerial implications for app monetization.
- Ph.D., Indiana University
- M.A., Indiana University
- B.S., Xiamen University
- Visiting PhD, The University of Chicago, Booth School of Business
- Visiting Student, National Tsing Hua University
Jingcun Cao joined the University of Hong Kong in 2020. He gained his bachelor degree in Computational Mathematics, master degrees in Economics and Business, and PhD degree in Marketing.
His research mainly focuses on substantively important and managerially relevant problems, and tries to solve the problems with the most adequate methods, including econometrics, field experiment, and machine learning and statistics. His expertise lies in mobile marketing, applied machine learning, entertainment industry, and policy intervention.
Dr. Cao has a series of research in mobile app ecosystem, including users’ mobile apps usage behavior, mobile app monetization strategies, in-app targeted promotion, mobile app stores’ regulation policy on fake apps and fake reviews. In the meantime, his research utilizes multidisciplinary methods, including deep learning, field experiment and lab experiment, to better understand consumers’ searching and shopping behavior.
Dr. Cao also works closely with hi-tech and internet firms to gain deep understandings in the most innovated business models in the industry, and also helps firms to get empowered with cutting-edged marketing research, especially on Business Intelligence and Data Driven.
- Big Data Marketing (MKTG 3530)
- Introduction to Marketing (MKTG 2501)
- Digital Marketing
- Applied Machine Learning
- Entertainment Industry (Movie Market & Game Market)
- Mobile App Ecosystem
- Policy Intervention
- Mobile App Market
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“From Free to Paid: Monetizing a Non-advertising-based App” with Pradeep Chintagunta, and Shibo Li, Journal of Marketing Research, forthcoming.
“Driving towards Purchase: Investigating the Impact of Product Scarcity on Consumers’ Search Behavior”with Pradeep Chintagunta, and Shibo Li