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.
“Some of the most successful ads have a simple call to action, such as, ‘We haven’t seen you in awhile. Try this new feature that we’ve added to our app,’ and other mobile-centric messages,” said Fiksu’s chief strategy officer, Craig Palli.
As the mobile app market matures, vendors are taking note and offering tools to help app developers drive more engagement among their existing users.
One such company is mobile app marketing firm Fiksu, which unveiled its retargeting tool on Thursday.
"2013 was a really interesting year in terms of maturation, milestones and new trends," said Craig Palli, chief strategy officer at Fiksu, a mobilemarketing company based in Boston.
Snapchat, Vine, and Candy Crush Saga earned coveted spots on smartphones this year, making them among the most downloaded apps of the year.
This year, the most downloaded apps were new takes on communication, gaming, and entertainment, according to mobile app experts.
The iTunes App Store freeze — when app rankings stop moving for a period of time, traditionally right around Christmas — has long been a cause for both excitement and concern among app marketers. This year, we can confidently say that it’s not just less important than it used to be: It’s downright irrelevant.
For a few years, in 2009 and 2010, the App Store freeze was a glorious opportunity for app marketers. A well-timed advertising blitz could push an app to the top of the charts just before the freeze. As soon as the ranks stopped changing, marketers would cut their ad spend and enjoy a free stay at the top of the charts for days — and watch with glee as downloads piled up. Since the freeze coincided with Christmas, loads of people with new phones would be heading to the app store to load up on games and apps, so those spots at the top of the charts were even more valuable than usual.
"First, this should help with engaging users who are opening new devices on Christmas, to make sure they immediately start using iTunes for all their media needs," said Tom Cummings, manager of client development at Fiksu, Boston, MA.
"Second, for both new and existing users, this promotion seems like an effective way to encourage more cross-category use of iTunes. Active app downloaders who typically get movies through Netflix might try an iTunes movie instead, if it's free, or might download an eBook from Apple instead of Amazon," he said."The upside for Apple is in additional lifetime value per user: driving more iTunes purchases over the life of each device."
Fiksu is able to track iPhones and iPads that use its Software Developers Kit (SDK) on various apps.
What the two graphs below show is the percentage of iPhones or iPads that are using its SDK compared the install base of all iPhones or iPads that have its SDK. One of the key takeaways from the two charts is that there has been a steady increase in the use of its SDK on the iPhone 5c and 5s and the iPad Air and Retina mini (note that the last day on the chart has spiked up but it tends to decrease through the day). I take this to be another indication that the supply of the new models has been consistent and growing.
Although Apple does not make historical information about operating system adoption available, mobile tracking firm Fiksu notes that iOS 6 was only installed on about 70 percent of devices the same number of days after its release, while iOS 5 was only able to make its way onto 65 percent of hardware.
These numbers are even more impressive once you realise that they represent percentages of an ever-growing number of overall hardware devices. Back in September, while announcing that it had sold nine million new iPhones, Apple indicated that some 200 million users – 30 percent of the total – had already updated their existing phones to iOS 7, which means that today’s 74 percent translates to over half a billion devices – and that’s based on an overall figure that doesn’t even consider the devices that Apple has sold in the last three months.