User acquisition costs for titles in Apple’s App Store reached a record high in June, as a change of approach from Apple around video advertising and the World Cup had an impact, according to app marketing company Fiksu.
For the first time in the four years that Fiksu has been analysing mobile app marketing, the cost per loyal user index passed the $2 mark to hit $2.23. This represented a 49 per cent year-on-year increase and a 25 per cent jump from the previous month.
Despite the high user acquisition costs, cost per install actually fell 23 per cent compared to the prior quarter to $0.98. For games, it fell to $0.85 compared with $1.11 in May.
“Over the past 12 months, Facebook has enjoyed a leadership position with respect to performance in the app marketing space,” Craig Palli, chief strategy officer at Fiksu.
While Facebook’s mobile advertising business keeps growing – mobile represented a whopping 62 percent of ad revenue during the second quarter - the social network could become a victim of its own success, particularly on the application marketing front, as a growing number of competitors come out with their own, often compelling offerings.
The 62 percent of ad revenue delivered by mobile in the second quarter is up from 41 percent during the same period a year ago and from 59 percent in the first quarter of 2014. Facebook’s new mobile ad network and app install ads drive much of the mobile ad revenue but the company continues to look at ways to broaden its mobile ad business.
“The June Fiksu Indexes reflected what we would consider a perfect storm of summer activity including the distraction of the World Cup, and untimely changes to video-based installs,” said Micah Adler, CEO of Fiksu.
App marketing costs have reached an all-time high, according to user acquisition and marketing company Fiksu. Results from its newest indexes show the cost per loyal user hitting more than $2 in June 2014, at $2.23. That’s an increase of 25 percent since May, and a 49 percent increase year-over-year. Fiksu defines a loyal user as one who opens an app at least three times.
While the Cost Per Loyal User index broke records, the company’s Cost Per Install figures dropped to $0.98 for iOS apps, a 23 percent decrease from May. Meanwhiile, June’s App Store Competitive Index, which tracks the average daily downloads for the top 200 free iPhone apps in the US, dropped from 6.6 million downloads in May to 6.1 million in June.
According to mobile marketing firm Fiksu, which tracks the use of iOS on active Apple devices, the iPad 2 was still the most popular iPad in use as of April 2014, even though it had already been out for three years. For comparison, the iPhone 5, released in September 2012, is the most-used Apple smartphone.
Apple’s flagship product, the iPhone, is humming along nicely, according to the company’s latest quarterly earnings report, but its newest disruptive device has seen better days.
The iPad, which turned four years old in April, is suffering slowing sales on both a sequential and year-over-year basis. The product line sold 13.3 million units between April and June, down 9 percent from the same period last year. That’s bad news for a relatively new device that was supposed to be “better than a laptop” and eventually devour the PC market.
"To date, Yahoo has failed to make a successful mobile transition to the extent that companies like Facebook have," says Craig Palli, chief strategy officer of Fiksu, a mobile app marketing tech company.
In an effort to expand its mobile ad business and attempt to compete with Facebook and Google in the mobile space, Yahoo has agreed to purchase mobile analytics and advertising platform start-up Flurry.
Founded in 2005, Flurry aims to deliver "the optimal mobile experience through better apps and more personal ads." The company gathers audience data from more than 540,000 mobile apps and uses the data to create audience segments to help advertisers target with in-app ads.
The cost of acquiring a loyal user among brands actively seeking out these consumers rose to $1.78 in May, according to Fiksu's Cost Per Loyal User Index. Fiksu defines a loyal user as someone who has opened and used an app more than three times.
With app store competition on the rise, generating app installs and acquiring loyal users is getting more expensive, according to new data from app analytics company Fiksu, compiled in the chart below from BI Intelligence.
In May, the cost of generating an app install on iOS and Android grew 56% and 30%, respectively, from one year earlier, according to Fiksu's Cost Per Install (CPI) Index, which measures the total advertising cost app developers incur per app install.
“We’re thrilled to expand the strength of our executive team by bringing Ken on board,” said Fiksu CEO Micah Adler in a statement. “His proven track record of driving growth for companies in rapidly changing industries is impressive. We’re looking forward to leveraging his experience and expertise to help Fiksu evolve to the next level and realize its full potential.”
Mobile marketing tech company Fiksu is gaining ground. On Friday, Fiksu announced it has hired its first-ever chief financial officer, Ken Goldman. Goldman is the former CFO of Black Duck Software, and will be the newest executive to join the Downtown Boston firm.
“I knew that Fiksu was an opportunity I couldn’t pass on, and I feel so lucky to be here,” Goldman said in a statement. “I think this is just one of those companies you’re going to look back on and say Fiksu defined the industry in the same way you might talk about a Facebook, Twitter or Amazon. I fully believe Fiksu is going to have one of those places in history when the story is written.”
Boston-based mobile app marketing software firm Fiksu has appointed its first chief financial officer, Ken Goldman, who was previously CFO at Burlington-based Black Duck Software.
"It's very clear that the cost of app marketing and the competition for downloads is on a constant upward trajectory: what we're calling app inflation," said Micah Adler, CEO of Fiksu.
As more people go online using mobile devices and consume media via apps, marketers are finding it increasingly difficult to recruit and retain loyal app users.
Fiksu, the app marketing specialist, reported that aggregate daily downloads of the top 200 ranked apps grew 24% during May 2014 while its Cost per Loyal user Index rose 17% month-on-month and 34% year-on-year.
“Our integration with Twitter means our mutual clients can take advantage of our deep experience in mobile app install ads combined with Twitter’s immediacy, massive mobile reach and audience targeting possibilities,” said Micah Adler, CEO of Fiksu.
App marketers are being hit by ‘app inflation’ as the cost of acquiring users and download volumes on Apple’s App Store soars.
According to app marketing company Fiksu, the App Store competitive index, which measures the aggregate daily download volume among the top 200 ranked apps, grew 24 per cent in May to reach 6.6 million. The figure was 5.34 million in April but more than seven million in March.