“Today’s savvy app marketer is looking to achieve two things: 1) to cost-efficiently acquire new users and, 2) to drive engagement and repeat app usage,” Micah Adler, CEO of Fiksu, said in a statement.
Fiksu is launching a couple of new mobile app marketing indices today that show how the costs of acquiring new users are rising.
These costs matter to developers and publishers because they show that, on average, the cost of getting new users often exceeds the revenue that comes from those users. That’s a recipe for disaster, and it means a lot of mobile app and game companies will go out of business, while only some will survive as hit makers.
We'll hear from: Micah Adler, CEO of Fiksu, and Jon Auerbach, general partner with Charles River Ventures, about the story of Fiksu, one of the fastest-rising startups in the mobile landscape.
We are coming down the home stretch in preparation for Mobile Madness 2014: The Next Disruptors.
It’s all happening in two weeks—Wednesday, March 19—at Microsoft NERD in Cambridge, MA. We are getting pumped.
Acquiring a loyal user (defined as someone who opens an app at least three times) increased from an average of $1.30 in 2012 to $1.62 in 2013, according to mobile app analytics firm Fiksu.
What is the cost of acquiring a loyal app user? Based on the testimonial of various industry insiders, the price is rising so quickly ad revenue can’t keep up. As such, app developers are looking for new ways to profit, often by developing ad tech.
“The ecosystem is really new, and a lot of companies are still finding their way,” said Glenn Kiladis, vice president and chief games evangelist at mobile marketing firm Fiksu. “You have to be careful on privacy regulations and a lot of other things.”
Developers love stability. If you give them enough time and a platform that works, they’ll eventually come up with something brilliant like Naughty Dog’s The Last of Us, which was published in the seventh year after the launch of Sony’s PlayStation 3. It was a masterpiece, winning 10 awards including Game of the Year at the recent Dice Awards (the Oscars of gaming). And that was because the developers just had to worry about making their game, not the technology around it.
And this is just the beginning – if Twitter is to continue to follow in the footsteps of its Zuckerberg-led rival concerning mobile ads then the revenue potential could be huge - Fiksu reckons Twitter is set to dominate mobile advertising this year.
Twitter has reported that 184 million active users come from mobile, up 37 per cent compared to a year ago and accounting for 76 per cent of overall users.
Its mobile ad segment also made up for 75 per cent of all ad sales, working out at $165 million of the overall $200 million ad revenue.
“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,” said Micah Adler, CEO/founder of Fiksu, Boston.
According to Fiksu’s December indexes, the average cost per loyal application user saw a slight decrease of 4 cents as opposed to the usual jump around the holidays, suggesting marketers are getting smarter about how they spend their acquisition dollars.
In a surprise, the cost of acquiring loyal mobile app and game users fell in the busy month of December, according to an index tracked by mobile app marketing firm Fiksu.
Micah Adler, the chief executive of Fiksu, said that the decline in cost may reflect more maturity among mobile app marketers who refrained from spending or spent their money in a smarter way. Rather than trying to go “all in” during an expensive season for buying ads, they spread their marketing budgets across the entire season from Cyber Monday through the New Year.
“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 of Fiksu.
User acquisition and marketing company Fiksu has released its December App Store Competitive Index and Cost per Loyal User Index, measuring app downloads and user acquisition costs for December 2013. The reports show app downloads spiked in December, thanks to so many new devices being given as holiday presents, while user acquisition costs decreased month-over-month.
iOS users are also more likely to not only download a new app, but continue to use it, said Chris Shuptrine, senior director of client development at app marketing firm Fiksu. Because of iOS users’ relative willingness to download and use new apps, they are actually 10 percent cheaper on a cost per acquisition basis, he added.
Samsung famously advertised its Galaxy S II and Galaxy S III smartphones in 2011 and 2012, respectively, by mocking Apple fanboys and making iPhones seem passe.
That clever piece of advertising was fairly effective: Android is the leading operating system for smartphones in the U.S. with 47.5 percent of the market, according to eMarketer. IOS is second with 39.5 percent.
“In the beginning for any client, marketing at first will be largely user-acquisition oriented, in that you need to build up a critical mass of a user base prior to then embarking on how you build on the trust and confidence with your customers,” said Craig Palli, chief strategy officer at Fiksu, Boston.
The PGA Tour Caddie mobile application has evolved its strategy beyond acquiring users to retargeting them and triggering repeat visits.
Tracking and retargeting have long been a challenge on mobile due to a lack of cookies or an alternative form of tracing users. The PGA Tour Caddie app, which was created by Shotzoom Software, overcomes this obstacle with Fiksu’s technology for retargeting.