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Posted by: Jeremy SaccoFebruary 13, 2014
Last week, we released our December Indexes, which reflected the anticipated spike in downloads over the holiday season but also surprised us, with only a slight dip in app marketing costs. What has traditionally been one of the most expensive periods for user acquisition, it appears, has actually become less costly for savvier marketers. Longer campaigns and strategic media spending using technologies like programmatic media buying meant that the peaks and troughs we’ve been used to seeing during the holidays have evened out.
They say that hindsight is 20:20. With that in mind, we decided to review our past Indexes, quarter-by-quarter and compare 2012 to 2013. And we have some interesting takeaways to share:
The volume of aggregate daily downloads increased by 17 percent year-over-year, but remains steady in recent quarters.
It wasn’t surprising to see that mobile app downloads had jumped in the last year; more devices meant more users yielding more app downloads by the day. However, the quarter over quarter comparison is quite interesting, as 2013 outpaced 2012 every quarter except Q1. That's a bit decieving, though: download volume in Q1 2012 was greater than Q1 2013 only because many of those downloads were automated downloads by "bots." Apple banned bots during that quarter, which cut a significant percentage of the total downloads. Overall, 2013 was the year downloads really took off, breaking industry records, though the download growth has started to plateau. This is an indication that some more mature markets are nearing their saturation point. While the percentage growth may be slower this year, it’s based on an ever-increasing raw number of total downloads.
Average mobile app marketing costs in 2013 were 22 percent higher than 2012.
As the market becomes increasingly saturated with new apps flooding into the App Store, smartphones are also becoming an everyday necessity for today’s consumers, making it increasingly costly for developers and app marketers to acquire new, loyal users. In 2012, the cost to acquire loyal users was 18 percent lower than in 2013.
There was a stark contrast between the loyal user acquisition costs when comparing Q3 2012 to Q3 2013.
Each year, Q3 is the season of device launches with Apple introducing the latest innovations to its line of much envied gadgets. But what’s interesting is the year-over-year comparison of the Q2 to Q3 transition. In 2013, user acquisition costs saw a 24 percent spike from Q2 to Q3, where 2012’s costs slightly decreased. This was due at least in part to October 2012 being the lowest month on record for UA costs, which was in turn driven by a glut in ad inventory thanks to the launch of the iPhone 5.
If we had to make a prediction for where we see the market for 2014, we expect two trends to continue:
- Download volumes will to continue to rise. With recent sales figures and the dominance of apps as the mobile user interface, there’s no sign of users putting down their devices any time soon.
- Costs will continue to fluctuate as marketers latch on to different technologies and tactics. As one route becomes popular because of its effectiveness, increased demand will drag it back down to earth. Then another channel surfaces as the most effective route and so on, swinging prices back and forth. Marketers should keep spends flexible to stay on top of what's most effective month to month and quarter to quarter.
Posted by: Jeremy SaccoJanuary 30, 2014
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 December Fiksu App Store Competitive Index jumped by 12 percent to 6.4 million daily downloads over November’s 5.7 million – a 20 percent increase year-over-year, compared to December 2012. In December, new iPhone owners flooded the App Store around the holiday season downloading the essential apps for their new gadgets (as seen on our device usage tracker).
The Fiksu Cost per Loyal User Index saw a slight dip in December, down four cents to $1.75 from November’s $1.79 – this represents a five percent increase in costs year-over-year. Contrary to previous years when mobile app marketing costs peaked in December, two factors caused the current decline.
First, holiday-enthused app users on new devices are more likely to become loyal users, as the first wave of apps they download are most often the apps they care about most. (The early bird catches the worm, perhaps?).
Second, this decline shows us that app marketers are getting smarter and spending their marketing budgets more wisely. Rather than trying to go “all in” during what has previously been the most expensive time of the year, they spread their marketing budgets across the entire season, engaging with users from Cyber Monday all the way through Christmas Day and on into the New Year. Also, smart marketers are increasingly focusing their ad spend on traffic sources that return the best long term value for their money. Furthermore, taking advantage of new technologies like programmatic real-time media buying further helped them drive down costs and benefit from the increase in App Store traffic.
These numbers are an indication that the mobile market and today’s app marketing strategies are starting to evolve in a more linear fashion, evening out the peaks and troughs we’ve been used to seeing around the holidays.
“We’re reaching a maturation point in the app market as marketers get ever-smarter about how they use their marketing budgets,” said Micah Adler, CEO and founder, Fiksu. “Acquiring users is not the be-all-end-all for today’s savvy marketer. Reengaging with users over time and solidifying user loyalty is the ultimate goal, and this month’s indexes indicate the early adoption of this strategy.”
More analysis of the indexes can be found here.
To date, Fiksu has accumulated more than 207 billion app actions including launches, registrations, and in-app purchases, as well as massive amounts of data from real-time bidding requests and mobile advertising networks. Additionally, our team has also driven more than 2 billion app downloads for its customers.
Posted by: Jeremy SaccoJanuary 3, 2014
Our November Fiksu Indexes marked the start of the 2013 holiday season rush, with app marketing costs and daily downloads beginning their upward climb. And, when combined with our device usage tracker, they hinted at what’s in store for a record-shattering December!
The Cost per Loyal User Index jumped 10 percent, or 16 cents, to $1.79 from October’s $1.63 – a 25 percent increase in costs year-over-year. This month's increase follows suit with the increase seen in November 2012 following the iPhone 5 launch, although the swing isn't nearly as drastic since costs in October 2013 didn't drop to October 2012's historic lows. The App Store Competitive Index also saw a slight increase of two percent to 5.7 million daily downloads from October’s 5.6 million – a 30 percent increase year-over-year.
This month’s Index data shows the vast opportunity that December will bring for app marketers and developers. Based on early Fiksu Labs data, we expect app store competition to soar through years’ end, reaching between 6.6 and 7.4 million daily downloads in December, as many consumers unwrap new devices and immediately begin loading them up with apps. Advertisers will be spending heavily to drive up app store rankings in preparation for the rush of user activity following the holidays, and will have to be willing to pay a premium to reach this surge of valuable users – we predict app marketing costs will reach the $1.80 mark.
Check back soon for our December numbers. And Happy New Year from the Fiksu team!
Posted by: Jeremy SaccoNovember 26, 2013
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.
In October, we watched the Cost per Loyal User Index decrease by three percent to $1.63 – representing a 54 percent increase in costs year-over-year. That increase may seem inflated due to October 2012 seeing a historic low in cost per loyal user. That month, on the heels of the iPhone 5’s availability, organic searches spiked as users took to the App Store searching for new apps to download on their new devices. This heighted period of natural discovery caused the cost to acquire and engage loyal users to plummet. In contrast, costs remained relatively steady post-iPhone 5s and 5c launch in 2013, likely in part due to advertisers' increasing understanding of the value of these new users -- and their resulting willingness to spend more to acquire them.
The App Store Competitive Index dipped two percent to 5.6 million daily downloads in October. Due to a massive spike in download volume occurring during this time period last year around the iPhone 5 launch, this is the first time in five months that Fiksu observed less than 20 percent year-over-year growth in download volumes. If you haven’t seen it, be sure to check out Fiksu’s “Analyzing 21 Months of Mobile App Discovery” study that gives a comprehensive look-back at app store competition and growth over the past two years.
We also observed some marketers holding back in October, limiting their spending while they planned for larger splash campaigns timed around the fast-approaching holiday season. We expect activity to ramp up considerably in the coming months as many large brands and games pour money into the ecosystem around the holiday peak -- and judging by the frantic activity in our client management team, it's already underway.
Posted by: Jeremy SaccoOctober 29, 2013
The relentless growth of mobile has been an incredible story for a long time, and here at Fiksu, we've been tracking it. Our monthly Fiksu Indexes have been tracking the volume of downloads and the cost per loyal user every month for two and a half years, and they reflect this growth.
But the monthly indexes tend to focus on the short-term trends. So we've compiled the indexes since the beginning of 2012 to give you a 21 month snapshot as we head into what's sure to be another whirlwind holiday season.
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<div><a href="http://www.fiksu.com/infographic-charting-21-months-app-marketing"><img src="http://www.fiksu.com/images/fiksu-mobile-app-discovery-400" alt="Charting 21 months of app marketing"></a></div>
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<div><a href="http://www.fiksu.com/infographic-charting-21-months-app-marketing"><img src="http://www.fiksu.com/images/fiksu-mobile-app-discovery-650.jpg" alt="Charting 21 months of app marketing"></a></div>
Posted by: Jeremy SaccoOctober 2, 2013
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:
First, we continue to see the effects of big brands saturating the market to cost-effectively acquire loyal users. Bigger brands are ready and willing to pay more for the valuable users, like those on Facebook, ultimately driving up this competitive cost. They also may be starting to realize that mobile is an undervalued media channel and increasing their willingness to invest in it.
Second, marketers are looking ahead and starting to make headway with holiday planning. Many are applying their Q3 budgets to test different mobile marketing strategies before the big rush in Q4 when costs will likely rise further, as seen in previous years. Now, more than ever, is the time for mobile marketers to hone their campaign strategies before the real competition starts.
While a two percent bump to 5.9 million daily downloads is a small change month over month, it does represent a 46 percent year-over-year increase from August 2012, underscoring the explosion of app usage.
Check back next month to see how the much the iOS7 and iPhone 5s/5c launches affect the Index for September! But in the mean-time, tune in to our device and OS adoption tracker to see how they’re taking off.
Posted by: Jeremy SaccoSeptember 12, 2013
August has been a pretty slow month for mobile app marketing in recent years, but this year went a different direction. Not only did our July indexes reach impressive heights, but Apple also introduced a new wrinkle to its ranking algorithm all while gearing up for its annual launch of new eye-catching gadgets. So much excitement, that we almost missed the coveted Index post!
The Fiksu Cost per Loyal User index reached a high of $1.80 in July – up from June’s $1.50. This is the highest the CPL has ever been since December 2011, when marketers spent heavily to drive up app store rankings before the traditional App Store freeze. Fiksu’s App Store Competitive Index also saw an uptick of four percent to 5.8 million daily downloads in July.
These fluctuations reflect several factors: Apple's recent incorporation of app ratings into its App Store Top Charts ranking algorithm, the growing number of brands leveraging Facebook's mobile app install ads, and increased mobile app activity during the dog days of summer.
With Apple’s ranking algorithm change, which appears to favor highly-rated apps and penalizing others, app marketers must now work even harder to generate positive ratings from engaged users, since user acquisition costs for apps without stellar ratings will now be more expensive. We also saw competition creeping up in July as advertisers began ramping up campaigns in the months leading up to the new iPhone launches. This was particularly evident with games publishers, as they vied for the attention of countless students who turned to playing games to fill their free time during the hot summer days.
Thanks to all who covered this month’s indexes, including: AdExchanger, App Developer Magazine, FierceMobileContent, Inc. Magazine, MediaPost, Mobile Entertainment, Mobile Marketing Magazine, Mobile Marketing Watch, Mobile World Live, PocketGamer, TechCrunch, The Next Web, and VentureBeat!
Posted by: Jeremy SaccoJuly 31, 2013
“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?
The reality is that as brands, large and small, ramp up their spending on Facebook, app marketing costs and competition will continue to heat up. This means the best time to participate in Facebook mobile install ads is now.
But if we take a step back and examine this month’s Indexes against June 2012, the year-over-year cost to acquire loyal users has increased by only four percent, indicating maturation in app marketing compared to a year ago as marketers’ abilities to leverage timing, targeting and optimization are in full effect. This also shows the consistent seasonality of app marketing costs, as the increase from May to June last year was just over 14 percent, almost exactly consistent with this year.
As for the App Store Competitive Index, the five percent drop signals the "summer doldrums" have set in as people tend to consume fewer new apps than during other times of the year.
Posted by: Jeremy SaccoJuly 1, 2013
Mobile marketers have quickly realized the reach of Facebook’s mobile app install ad units and their ability to cost-efficiently drive volumes of users — and the latest Fiksu Indexes certainly reflect this trend.
Our May App Store Competitive Index numbers came in as the second highest month in 2013 to-date at 5.9 million downloads, trailing January with the highest volume at 6.1 million (the result of the holiday effect). In fact, compared to May 2012, we can see that downloads have increased 31 percent year-over-year – a result of the Facebook effect as well as the continued movement of big brands into the mobile app space.
As for our Cost per Loyal User Index, the May Index decreased by 11 percent, or 17 cents, to $1.33, from April’s $1.50.
As predicted last month, the increase in traffic in May can also be attributed in-part to the end of UDID tracking capabilities by the Apple App store on May 1 as well as Apple's new IDFA. This change caused many marketers to wait for the dust to settle on the new, standardized solution to resume regular marketing activities. Now that the IDFA is the clear standard for iOS marketing attribution, app marketers have returned and are spending again.
Posted by: Viki ZabalaJune 3, 2013
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:
- First, the relentless industry investment in mobile by brands large and small that kept competition high throughout the month.
- Second, the industry’s smooth transition from Apple’s UDID to its new Advertising Identifier (IDFA) actually kept traffic stable when it could have caused some disruption.
- And third, the increasing traction of Facebook mobile app install ads, which may have provided developers with a greater pool of efficient inventory and likely buffered the industry against even greater rises in costs.
Interestingly, the end of UDID and the transition to Apple's new IDFA prompted many high-visibility, valuable app publishers, such as Pandora, to enter the marketplace, bumping up available premium inventory for advertisers. These kinds of publishers previously didn’t offer attributable ad inventory due to concerns about earlier identifiers, but the advertising-friendly IDFA has changed their minds. We’ll continue to watch this trend and report back in our May Indexes.