The Fiksu Indexes published today by Fiksu, Inc., the data-fueled mobile marketing technology company, offered another indicator of the shifting app market as the cost to acquire a loyal user fell to $3.21, down 8 percent since February. At the same time, the volume of apps downloaded in the top 200 free iOS apps, as reported by the Fiksu App Store Competitive Index, declined 7 percent since last month and 11 percent since last year, to 7.6 million daily downloads.
As evidenced by Index trends over the past several months, it’s clear that the ‘app frenzy’ is slowing. While apps dominate consumers’ time on mobile devices, that time is being spent in fewer apps, as the typical smartphone owner now spends more than 88% of their app time on just five apps. And on top of the home screen attention battle, the general consumer isn’t as app friendly: according to comScore , most people don’t download any apps on a monthly basis because they aren’t looking for new ones.
To counter that changing landscape, advertisers have learned that targeting the right people and focusing on users who already have an affinity for their brands is vital to the growth of their apps. This involves not only engaging existing users and motivating them to use their apps, but also incorporating lookalike and persona targeting to hone in on relevant audiences so they can capture new loyal users whenever possible.
As acquiring the right app users becomes more important than amassing a high volume of app installs, measuring the cost of user engagement changes. That’s why we are putting a stake in the ground: the days of focusing cost per install are over, and as a result we are retiring our Cost Per Install (CPI) Index. When app marketing was in its infancy, the CPI Index was a good bellwether, allowing marketers to compare their cost per download with the larger industry. With today’s mature app market, CPI is no longer a good gauge of an apps’ success: targeting, tactics, and competition in specific categories can dramatically shift CPI for any one app campaign.
“As the app market has evolved, so has our analysis and measurement of what is influencing it,” said Micah Adler, CEO of Fiksu. “Today, marketers need to be segmenting their users more precisely and analyzing their results to reflect that user segmentation as well. App users aren’t a single, monolithic group, and that’s why advertisers can’t measure against a single cost per install. Smart marketers should be willing to spend different amounts for users that have different lifetime values.”
We aren’t dismissing CPI completely: the metric is still useful in the first step of an ROI calculation, comparing how much it costs to acquire an app user versus their lifetime value. But the stakes are higher, and marketers seeking to efficiently reach their target audiences through targeting, segmentation and smart measurement will be rewarded for their efforts to find loyal users rather than any users.
Over the coming months, we’ll be keeping our eye on the trend of ‘suites of apps’ – such as Amazon and TurboTax – who separate their services into several apps and by doing so effectively block other players from showing up in top search results. We’ll also be watching to see if Apple rolls out a paid search model in the App Store, similar to Google Play’s model.
For Fiksu’s full March analysis, visit http://www.fiksu.com/resources/fiksu-indexes#analysis.
Fiksu is a data-fueled mobile marketing technology company that connects brands, agencies, and app advertisers to precise audiences throughout the customer journey. Fiksu’s mobile audience platform combines a massive, proprietary dataset with powerful segmentation tools to create, refresh, and reach audiences. Fiksu has led thousands of successful mobile campaigns to drive awareness, user acquisition, and re-engagement for clients such as Amazon, Disney, Activision, Coca-Cola, Electronic Arts, The New York Times, Dunkin’ Donuts, and Starcom. Based in Boston, Mass., Fiksu is venture-backed by Qualcomm Ventures and Charles River Ventures. More at www.fiksu.com, @Fiksu and on the Fiksu blog.