While warmer weather is on the rise, so are app downloads and marketing costs in May – setting the stage for a competitive summer. App inflation has become the new normal for brands and app marketers, as the cost for acquiring loyal users climbs again.

The App Store Competitive Index for May, which measures the aggregate daily download volume among the top 200 ranked apps, grew by 24 percent to 6.6 million, compared to April’s 5.34 million. Meanwhile Fiksu’s Cost per Loyal User Index rose 17 percent to $1.78 in May and 34 percent year-over-year.

April “showered” marketers whose apps sit outside of the top 200 with a great opportunity to get increased visibility from their marketing spend as the big brands dialed back on spending before gearing up for their summer campaigns.

March was the month of market maturity for our Indexes, as app developers continue to improve the quality of offerings, advertisers adopt more powerful programmatic and optimization techniques, and device usage continues to skyrocket.

The App Store was buzzing during the holidays and Fiksu’s December Index data not only reflected the frenzy of excited users with new devices, but also showed the maturation of mobile app marketers.

The month of October brought saw new users of iPhone 5s and 5c phones flooding into the market and eagerly downloading new apps, keeping volumes up. However, the increase in advertising activity as some marketers rushed to get in front of this new audience, coupled with consumers’ tendency to be particularly loyal to the first wave of apps they download on a new device, helped keep costs stable throughout the month.

The August Index was one for the record books, with the Cost per Loyal User index hitting an all-time high of $1.90 – a six percent, or ten cent, increase from July’s $1.80. Driving this increase were two main factors:

“Come on in, the water’s fine…”

As Facebook continues to rock the news world, our June Index data is also feeling the love from the social networking giant.

Brands are beginning to catch on to the power of Facebook’s mobile app installs ads to drive large volumes of quality users at incredibly low CPIs. The impact of this growing demand was most vividly evident in the 13 percent increase we witnessed in our Cost per Loyal User Index this month, up $.17 to $1.55.

What does this mean moving forward?

Following a steady couple of months, April saw competition – and costs - heating up for mobile app marketers. The Fiksu Cost per Loyal User Index reached $1.50, an increase of 10 percent, or 14 cents over March’s $1.36, while the App Store Competitive Index rose 11 percent, to 5.61 million daily downloads from 5.02 million in March.

After analyzing the data, it was clear to us that three distinct forces contributed to these dynamics in April:

Our latest Fiksu Indexes are out – revealing a sharp drop in iPhone app downloads during the month of March. This dramatic decline returned app store competition to levels similar to those before the iPhone 4S launch last October.

Here’s a snapshot of the latest data: