For the first time, the cost to acquire loyal app users (CPLU) surpassed the $3 mark, according to the Fiksu Indexes published today by Fiksu, Inc., the data-fueled mobile marketing technology company. At $3.09, this represents a 10 percent increase in CPLU since last month and a significant 113 percent rise from last year. This relentless growth is representative of a larger trend, reflecting the expanding power of mobile marketing to reach app users and the rising costs happening in parallel.
Increasing costs and competition observed in the index are on par with worldwide trends, as mobile spend is rising globally. A recent report from eMarketer predicts mobile advertising spend will overtake web advertising by 2016. What’s more, by a 3-1 margin, the majority of the ad spending is happening inside apps—not the mobile Web. The competition for the attention and loyalty of app users has become more challenging, and for marketers, securing an app download from a user is no longer the end-game. In today’s competitive landscape, obtaining a loyal user is much more critical to the success of an app, and even more difficult than ever before—and in-app ads provide better targeting, much more inventory, and more accurate tracking than mobile Web.
The Cost Per Install Index (CPI), which measures the cost per app install directly attributed to advertising, increased to $1.53 on iOS in March, a rise of 20 percent since last month and 46 percent since last year. Similarly, the Cost Per Launch Index (CPL), which tracks the cost to drive mobile app engagement, increased to $0.31 on iOS; up 26 percent month-over-month and 62 percent year-over-year. Comparable increases were seen on Android, with even more drastic year-over-year figures: Android Cost Per Launch increased to $0.24, a 56 percent rise over last month and a 135 percent increase year-over-year.
On the volume side, the Fiksu App Store Competitive Index, which tracks the average aggregate daily download volume of the top 200 free iOS apps, reached 8.1M in March, a 16 percent decrease from last month but an increase of 15 percent since last March, demonstrating its ongoing upward trajectory year-over-year and reflecting the increasing consumer appetite for apps as the primary way to interact with smartphones and tablets.
“As we enter another record-breaking month, brands must face the inevitable rising tide: mobile marketing is maturing and becoming more expensive. To stay ahead of this evolving market, marketers must continually adjust and take advantage of programmatic media buying methods to spend marketing budgets as wisely as possible,” said Micah Adler, CEO of Fiksu. “Sustainable success will be found by brands that use more precise forms of targeting to reach the right mobile users: those who will engage with an app and become loyal over the long term.”
While the increasing popularity of mobile advertising channels such as Facebook intensified competition this month, big-spending brands may have had an impact as they poured their remaining Q1 budget dollars into mobile at the end of the quarter, without necessarily giving careful consideration to effective spending practices. In terms of what is ahead for marketers, April generally means less competition and caution with budgets. That historic trend may fluctuate this month, however, as the Apple Watch has made its highly anticipated debut: the flurry of activity and excitement may drive additional activity for iOS marketers. In either scenario, keeping existing app users engaged today should be a top priority for any brand looking to engage with users on the Apple Watch tomorrow.
For Fiksu’s full March analysis, visit http://www.fiksu.com/resources/fiksu-indexes#analysis.
Fiksu provides data-fueled mobile marketing technology that connects brands, agencies, and app advertisers to targeted mobile audiences. Fiksu delivers up to 3x overall campaign performance improvement through the industry’s only complete mobile marketing infrastructure that combines actionable data, programmatic reach, and ad performance optimization. This integrated system offers all the capabilities a mobile marketer needs: mobile ad tracking and attribution, audience segmentation, media buying, retargeting, optimization, and analytics. Fiksu promotes thousands of mobile apps and websites for clients such as Amazon, Disney, Groupon, Coca-Cola, Activision, The New York Times, Dunkin’ Donuts, and Starcom. Additionally, Fiksu offers FreeMyApps®, the world’s largest app discovery platform. More at fiksu.com and @Fiksu.