Benchmarking app store competitiveness & the cost of mobile app marketing
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. The volume of downloads per day increased by 29 percent from 3.8 million in September to a record high of 4.91 million in October, following the availability of the new iPhone 4S model. Usually the Index captures mostly new app downloads but, given a new device launch, this month the Index also recorded many existing apps being added by people upgrading from their previous iPhone model (note that downloads of existing apps do not impact an app’s rank). Factoring this in, the likely net new volume is 4.5 million downloads per day, which is still higher than the Index’s seven-month average of 4.21 million. By comparison, the lowest month on record was May, when app download volumes bottomed out at 3.78 million downloads per day.
The Cost per Loyal User Index measures the cost of acquiring a loyal user for brands who proactively market their apps. Loyal users are defined as people who open an app three times or more. The cost per loyal app user dropped 12 percent – 17 cents – to $1.47 in October from September’s all-time high of $1.64 due to the large increase in app downloads both paid and organically driven.
After months of speculation and anticipation, which forced app download volumes down and mobile marketing costs up, the new iPhone arrived. Mobile marketers and developers collectively breathed a sigh of relief: the waiting game was over and the availability of the new device spelled opportunity.
As we predicted, Fiksu’s data showed that October was a roller-coaster of a month for mobile marketers. The first two weeks were relatively flat while users excitedly awaited the new iPhone. This stagnation was followed by the dramatic weekend of October 14-16, during which four million new iPhones were sold and app downloads reached a peak. The weekend also saw resurgent organic downloads and high mobile marketing costs as throngs of mobile advertisers tried their hardest to get their apps in front of hoards of eager new iPhone owners.
By the end of the month, the mobile marketing seas were calmer and opportunity bountiful. The last two weeks of October presented a marketing sweet spot for those who had resisted the urge to dive into the weekend advertising frenzy. Costs came down by 12 percent from September and volume remained plentiful. As they say, good things come to those who wait.