App Marketing Costs on the Rise Again

Tim Maytom

Apps stock imageMarketers are spending more to connect with users on mobile devices, even as app usage increases, with the cost per loyal user (CPLU) up 44 per cent year-on-year in June to $3.21 (£2.06).

The figures come from the Fiksu Indexes, which show CPLU is up 30 per cent month-on-month, even as app downloads increase 24 per cent in the same period, with the top 200 free iOS apps seeing 8.3m total downloads.

The increasing number of app downloads has driven down cost per install, which fell 21 per cent month-on-month to just $1.15 on iOS and was down nine per cent on Android, to $2.12.

The large number of app downloads also means there has been increase in inventory for in-app advertising, but means the challenge for marketers has shifted from finding users to finding loyal ones who will continue to use an app, rather than simply download and forget about it.

According to a report by Nielsen, the average number of apps used per person hasn't increased in the last two years, despite a 63 per cent increase in time spent using apps, and the high CPLU reflects the difficulty in breaking into that core set of apps.

"June's results reflect the ongoing evolution of the mobile marketplace, as marketers continue their struggle to gain screen time with users," said Micah Adler, CEO of Fiksu. "Increased competition for limited attention is causing a rise in overall costs. It is incredibly important for today's advertisers to recognise and precisely target their audiences, and market to a more focused pool of engaged users."