Marketers continue to spend more to connect with users on mobile even as app usage increases, according to the Fiksu Indexes published today by Fiksu, Inc., the data-fueled mobile marketing technology company. June’s cost per loyal user (CPLU) of $3.21 represents an increase of 30 percent since last month, and 44 percent year-over-year. On the volume side, app downloads increased 24 percent over last month according to the Fiksu App Store Competitive Index, which tracks the average aggregate daily downloads of the top 200 free iOS apps, reaching 8.3 million total downloads. The ever-increasing volumes of apps are providing greater inventory for in-app advertising, however the challenge of precisely targeting loyal users remains, and brands are consequently spending more dollars to find loyal users.
In contrast to the rise in CPLU, the increase in download activity has actually driven down the Cost Per Install Index (CPI), which measures the cost per app install directly attributed to advertising. On iOS, CPI fell to $1.15, a decrease of 21 percent since May. On Android, CPI dropped to $2.12, a decrease of 9 percent month over month. Both metrics, while declining month-over-month, represent increases in costs since last June. But despite lower CPIs, the challenges of reaching loyal users won out this month, causing the increase in CPLU.
Several factors are responsible for that increase. The first is that while app usage is soaring, people aren’t spreading that usage across more apps. As reported in eMarketer, Nielsen has found that the average number of apps used per person has not increased in the last two years, despite a 63% increase in time spent using mobile apps. The increase in CPLU reflects the difficulty of breaking into the core set of apps that get consistent usage.
The second factor driving up costs is the rising demand for mobile video ads, which are performing well for marketers. Video advertising accounted for a substantial and increasing amount of ad spend this quarter. According to a recent report from Kinetic Social, video accounted for 27 percent of ad spend on Facebook in Q2. Fiksu meanwhile found that video CPMs on Facebook rose by 15 percent in June, to just shy of $9. Video advertising is also a key source of loyal users for many advertisers, so fluctuations in video ad costs have significant impact on the CPLU.
“June’s results reflect the ongoing evolution of the mobile marketplace, as marketers continue their struggle to gain screen time with users. Increased competition for limited attention is causing a rise in overall costs,” said Micah Adler, CEO of Fiksu. “It is incredibly important for today’s advertisers to recognize and precisely target their audiences, and market to a more focused pool of engaged users.”
For Fiksu’s full June analysis, visit https://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, Groupon, Coca-Cola, Electronic Arts, The New York Times, Dunkin’ Donuts, and Starcom. More atwww.fiksu.com, @Fiksu and on the Fiksu blog.