The average cost to acquire a loyal player in May dropped to just $1.33. That’s down 11 percent from $1.50 in April, according to a report marketing-platform company Fiksu.
This drop coincides with an increase in downloads across the top applications in the Apple App Store from 5.61 million to 5.9 million daily downloads. This information comes from Fiksu’s App Store index, with tracks the average aggregate download volume for the top 200 free U.S. iPhone apps and games.
For the second month in a row, Fiksu credits Facebook’s mobile apps for decreasing the costs.
“Mobile app marketers have quickly realized the disruptive power of Facebook mobile app install ads, which have poured a new stream of effective and cost-efficient inventory into the market,” Fiksu chief executive Micah Adler said. “Savvy marketers have already taken advantage of Facebook’s extensive capabilities for focusing on specific audiences, and as more brands follow suit, we can expect volume to continue to climb – along with costs, as competition heats up in the coming months.”
For now, Facebook is increasing the supply of advertising targets, which is deflating demand.
Fiksu also noted the vast divide in marketing costs between mobile and desktop or television.
To emphasize the difference, the company introduced a new metric that measures the cost to engage a user on mobile. Fiksu defines mobile engagement as an app launch, an in-app purchase, or an in-app registration. The marketing firm thinks this better reflects the return on investment than cost-per-thousand impression (CPM) or cost-per-click (CPC).
“Brands are waking up to the fact that mobile apps provide an incredible and very cost-effective canvas for marketing,” Fiksu vice president Craig Palli said. “But using CPM and CPC as sole measures of ROI eclipses the powerful engagement that mobile apps bring and which brand marketers seek. Fiksu’s new CPE for mobile metric is a far more meaningful tool for brands to use for planning and decision-making.”
Fiksu found that the CPE for mobile was only 9 cents compared to 70 cents for engagement through desktop keyword search ads, like you’d find on Google. The CPE for mobile is also only a fraction of the 92 cents to engage customers via desktop display ads that appear alongside websites.
Fiksu released the full report, and it is available to download here.