The Fiksu Indexes published today by Fiksu, Inc., the data-fueled mobile marketing technology company, showed evidence of the Q2 spring lull, as the cost to acquire a loyal user fell to $2.51, down 22 percent since March and 8 percent year-over-year. As seen in past years, April and May’s results have typically fallen below those of preceding months. Characteristic spring decline, combined with the steady slowdown of the app frenzy that accompanied the early ‘wild west’ days of app marketing, meant marketers who were focused on the right audiences were able to keep costs down.
In tandem, volume fell 7 percent since last year, to 7.5M daily downloads, according to the Fiksu App Store Competitive Index, which tracks the average aggregate daily downloads of the top 200 free iOS apps. Since this decline in downloads would have reduced ad inventories and put upwards pressure on costs, this month’s results are indicative that other dynamics were at play. A key contributor: advertisers getting smarter and shifting to audience-focused targeting.
“An increasing number of ad technology providers are making it easier to get good targeting data, reach the right people and test different creatives – ultimately resulting in advertisers showing ads to the right people and obtaining better user loyalty,” said Micah Adler, CEO of Fiksu. “While this may not be representative across the entire industry yet, it has certainly impacted our index results. We encourage all brands to treat mobile as more than just a side show, as they will see the investment pay back considerable dividends.”
The added focus on mobile as a primary marketing channel is supported by analyst predictions that mobile will capture an expanded share of advertising dollars in the coming years. Mobile ad spending is predicted to more than double from 2016 to 2021, growing from 48 percent to 70 percent of all digital advertising spend, reports the Forrester Data Mobile Advertising Forecast.
This increase in spend raises a question of where the dollars will go. According to Morgan Stanley, 85 percent of every incremental online ad dollar is destined for Facebook or Google in Q1 2016, reported Allison Schiff in AdExchanger. However, Jim Payne, CEO and Founder of MoPub, noted in the same article that a portion of spend is staying away from Facebook, particularly among marketers who really understand what long-term user acquisition is all about.
“This point is spot on,” according to Tom Cummings, VP of new business development at Fiksu. “Marketers have a love/hate relationship with Facebook: they net excellent results, but are increasingly dependent on the platform as a single source for their ad spend and are seeing margins shrink. In response, advertisers are working to expand the process of acquiring and successfully engaging users across multiple channels, and this is a strategy that will ultimately pay off for them.”
Looking ahead, as brands and advertisers get smarter and more analytical about audience targeting, it’s important that they continue diversifying spend and tracking media costs carefully. Separating the cost per loyal user metric from media costs means some marketers will pay more for installs at the outset, but earn loyalty downstream and see better ROI long-term. In addition, if they’re able to apply the same audience targeting across multiple networks, marketers should consider diversifying spending to make sure they’re getting the most efficient results.
For Fiksu’s full April 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.