During the month of July, the cost of acquiring a new user for iPhone mobile apps declined slightly, according to an index [1] monitored by mobile app user acquisition platform Fiksu [2] .
That means that for mobile marketers, July was a less expensive month for acquiring loyal users (someone who opens an app three or more times) and getting an app ranked in the app stores. While the aberration isn’t that big deal for one month, it is interesting that app developers can use the Fiksu data to get a snapshot of the overall app economy.
“In general, it’s a good thing for marketers and developers to see the cost of acquiring a new user going down,” said Craig Palli, vice president of business development at Fiksu, in an interview.
Boston-based Fiksu measures the average daily download volume of the top 200 free iPhone apps in the U.S. It reported that there were 4.25 million app downloads per day in July, down slightly from 4.50 million app downloads per day in June. Also, the Fiksu cost per loyal user index decreased 5.5 percent to $1.20 in July from $1.27 a month earlier. The measurement of an average cost per user is a more meaningful return-on-investment metric than click-based ad campaigns. A recent study by eMarketer revealed that 63 percent of mobile marketers were not trying to measure ROI on their ad campaigns or just didn’t know the ROI.
Micah Adler, CEO, Fiksu, speculated that Apple’s banning of incentivized promotions , or pay-per-install promotions, could explain the change. Under incentivized promotions, app developers paid companies such as Tapjoy to incent users to download apps via rewards in the apps the users already had. Apple cracked down on the practice, implying it was not OK to buy your way onto the top-ranked apps list. Many marketers had been using incentivized promotions to buy bulk downloads and boost app ranks. Now they are starting to reallocate budgets into non-incentivized promotions that can deliver more loyal users at a lower net cost, Palli said.
The collective effect of the incentivized promotions was to drive up the cost of user acquisition, since all of the companies had to promote their apps more just to stay competitive with all of the companies that were using the incentivized installs, Palli said.
Fiksu based its index data on 2.7 billion mobile app actions recorded by its platform. Mobile app marketers can use this data to understand the impact of things such as iOS upgrades, sales of mobile devices, advertiser demand and ad network inventory. In April, before Apple turned off the incentivized promotions, the download rate per day was 4.61 million. Then it dropped to 3.78 million in May. Cost per loyal user was 94 cents in March, $1.10 in May, (and as noted above) $1.27 in June and $1.20 in July.
Palli said that Fiksu is collecting data on Android devices but has not yet released any index information.
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Companies: Fiksu
People: Micah Adler
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