The Cost per Loyal User Index measures the cost of acquiring a loyal user for brands who actively market their apps. For the purposes of the Index, loyal users are defined as people who open an app three times or more. The CPLU Index increased to $3.09 in March, a 10 percent increase month-over-month and a drastic 113 percent rise year-over-year.
The App Store Competitive Index tracks the aggregate volume of downloads per day achieved by the top 200 ranked free iPhone apps in the U.S. For the second month in a row, the Index dropped slightly in March, to 8.1 million daily downloads. This volume represents a decrease of 16 percent since last month, but signifies an increase of 15 percent since last year.
The Cost per Install (CPI) Index measures the cost per app install directly attributed to advertising. In March, CPI for iOS rose to $1.53 – a 20 percent increase since last month and 46 percent rise year-over-year. Android’s CPI also increased from $1.51 to $1.74, a 15 percent rise month-over-month, and 63 percent over last year.
The Cost per App Launch Index, which tracks the cost of each repeat app launch over time, focuses on engagement and lifetime value of mobile users. In March, the Android CPL Index increased significantly to $0.24, rising 56 percent from February and 135 percent year-over-year. The iOS CPL Index rose 26 percent since February to $0.31, rising 62 percent year-over-year.
Fiksu's Analysis: March 2015
Increasing costs and competition were observed in the indexes in March, as the cost to acquire loyal app users (CPLU) surged to over $3 for the first time. At $3.09, this represents a 10 percent increase in CPLU since last month and a 113 percent rise from last year. This relentless growth is representative of a larger trend, reflecting the expanding power of mobile marketing to reach app users and the rising costs happening in parallel.
Entering another record-breaking month, marketers and brands must face the inevitable rising tide: mobile marketing is maturing and becoming more expensive. The Cost Per Install Index (CPI), which measures the cost per app install directly attributed to advertising, increased to $1.53 on iOS in March, a rise of 20 percent since last month and 46 percent since last year. Similarly, the Cost Per Launch Index (CPL), which tracks the cost to drive mobile app engagement, increased to $0.31 on iOS; up 26 percent month-over-month and 62 percent year-over-year. Comparable increases were seen on Android, with even more drastic year-over-year figures: Android Cost Per Launch increased to $0.24, a 56 percent rise over last month and a 135 percent increase year-over-year, while Android CPI rose 15 percent since February to $1.74, a 63 percent increase over last year.
The Fiksu App Store Competitive Index, which tracks the average aggregate daily download volume of the top 200 free iOS apps, steadily increased between October 2014 and January 2015. Last month, we witnessed a slight decline which has continued into March. Reaching 8.1M downloads, this represents a 16 percent decrease from last month but an increase of 15 percent since last March, reflecting the increasing consumer appetite for apps as the primary way to interact with smartphones and tablets.
The trend of rising costs this month is not surprising given observations in the worldwide market. A recent report from eMarketer predicts mobile advertising spend will overtake web advertising by 2016. What’s more, by a 3-1 margin, the majority of the ad spending is happening inside apps—not the mobile Web. The competition for the attention and loyalty of app users has become more challenging, and for marketers, securing an app download from a user is no longer the end-game. Today, successful brands are the ones who reach the right mobile users: those who will engage with an app and become loyal over the long term.
In the coming months, a top priority for marketers should be continual adjustment and employment of programmatic media buying methods to spend marketing budgets as wisely as possible. April generally means less competition and caution with budgets. That said, this historic trend may fluctuate in April as the Apple Watch has made its highly anticipated debut and the flurry of activity and excitement may drive additional activity for iOS marketers. In either scenario, keeping existing app users engaged today should be a top priority for any brand looking to engage with users on the Apple Watch tomorrow.
For our full analysis of this month’s Index data, visit http://www.fiksu.com/resources/fiksu-indexes#analysis. For the breakdown on what happened last month, check out the February Index.