American Marketer


Cost to acquire new app users reaches all-time high

February 2, 2012


The cost for brands to acquire loyal application users reached an all-time high in December as companies bid up the price on mobile marketing during a period when consumers were actively engaged with mobile, according to new data from Fiksu.

The Fiksu Cost per Loyal User Index reached a record high of $1.81 in December, up 26.5 percent from November. While the price to proactively market an app increased in December, mobile still provides value compared to other digital channels.

“Despite some upward pressure on cost going into the holiday period, mobile marketing is still a tremendous value,” said Craig Palli, vice president of business development at Fiksu Inc., Boston.

“Also, there is a tremendous opportunity to grow very quickly,” he said. “We are seeing more and more mobile users every month doing more mobile downloads.

“On the one hand, you can grow quickly and, on the other, you get value. Mobile really is a tremendous opportunity right now.”

Marketing vigor

Fiksu’s data for December also shows that the average aggregate daily download volume of the top 200 free U.S. iPhone apps peaked at 6.04 million daily downloads, up from 5.65 million in November. This highlights that more consumers were downloading more apps in December.

The high cost of acquiring new users in December was the result of two factors: Apple releasing a new device during the fourth quarter plus the holiday period, when a lot of consumers received new devices and were excited to explore what they could do with them. In the past, Apple has typically released new devices in the summer.

Advertisers also spent heavily in December to drive up their app store rankings and lock in their rankings before Apple froze rankings between Dec. 28 and 28 something it has done before.

“Marketers were mapping to this swell of marketing opportunity and investing heavily in anticipation of new devices getting opened on Christmas,” Mr. Palli said. “If they were highly ranked before the freeze period, they could lock in their high ranking and get the benefit of incremental organic results.”

The last half of December was the most competitive for mobile marketers, with traffic and dollars spent in the final week of the month increasing 100 percent over prior weeks.

Advertisers with sufficient budgets had a significant opportunity to acquire new users during this period.

“Marketers really geared up and spent heavily and marketed apps with a tremendous amount of vigor during the week between Christmas and January,” Mr. Palli said. “In early January we are seeing an anticipated decline in efforts as marketers go back and look at their results and decide what to do in 2012.

Event marketing

The results were not a surprise but reinforce the belief that opportunities exist for marketers to reach consumers via mobile during key events such as Christmas and grow their user bases significantly.

“Peak periods represent massive growth opportunities,” Mr. Palli said. “We saw that in October with the release of iOS 5 and the new iPhone and we see it at Christmas.

“These are big times for app discovery and, therefore, times of maximum growth,” he said.

Data for the Fiksu Indexes was sourced from more than 11 billion mobile app actions and more than 200 million downloads recorded by apps marketed via the Fiksu for Mobile Apps user acquisition platform.

The key learning for marketers is that they need to have a calendar of events when there is expected to be a spike in marketing opportunity, such as big holidays and major new device launches.

“If your objective is to grow as fast as possible, you should plan heavy marketing plans for the week leading up to and following an event,” Mr. Palli said.

“For the marketer that wants more value, allow these events to take place and take advantage of the post-event period to get great value,” he said.

Final Take

Chantal Tode is associate editor on Mobile Marketer, New York