App Downloads Down, Marketing Costs Up

Mobile app user acquisition platform Fiksu reports that anticipation for the iPhone 5 impacted the Fiksu Indexes for August 2011, causing a 28.3 per cent jump in mobile app marketing costs.

The Fiksu Indexes help mobile app marketers benchmark their performance against industry averages by measuring monthly fluctuations in competition for rank in the app stores, and the cost to acquire loyal users. 

The Fiksu Cost per Loyal User Index increased by 34 cents from $1.20 in July to $1.54 in August. Fiksu’s research also recorded a 30 per cent decline in organic iPhone app downloads during August, a key factor driving the increase in costs to acquire loyal app users. The Fiksu App Store Competitive Index (which measures the average aggregate daily download volume of the Top 200 free US iPhone apps) decreased by almost 5 per cent, from 4.25m downloads in July, to 4.06m in August.

“The root of the changes in this month’s Indexes can likely be explained by eagerness for the new iPhone 5,” says Fiksu CEO, Micah Adler. “Our data shows that fewer apps were downloaded and subsequently used in August, suggesting that existing iPhone users are sitting tight and waiting for the new device. This caused the overall volume of downloads to decline and disproportionately impacted app marketing costs.”The Fiksu Indexes have now been tracking mobile app marketing for six months, March through August 2011. During this timeframe, the Indexes captured the impact of Apple’s ban on incentivized downloads, especially visible during May, and recorded a steady increase in the cost of marketing to loyal app users.

“The app stores are constantly moving targets, which present mobile app marketers with an ever-changing set of competitive pressures and budgetary decisions,” notes Josh Martin, director of apps research at Strategy Analytics. “The Fiksu Indexes provide marketers with a macro view of this competitive landscape, accounting for major market events such as the banning of incentivized downloads and anticipation of iPhone 5 – valuable insight in an increasingly fractured market.”

Data for the Fiksu Indexes was sourced from 3.7bn mobile app actions – such as app launches, registrations and in-app purchases – recorded by apps marketed via the Fiksu for Mobile Apps user acquisition platform.

You can see the full analysis here.

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