In a surprise, the cost of acquiring loyal mobile app and game users fell in the busy month of December, according to an index tracked by mobile app marketing firm Fiksu.
The cost of acquiring new users has been a curse for mobile app developers, particularly small indie companies that can’t afford to spend a lot on app marketing. The cost has been relentlessly going up. But December offered a rare respite even though the number of daily app downloads rose 12 percent to 6.4 million on the Apple iTunes App Store, compared to 5.7 million in November. From a year ago, the number of daily app downloads was up 20 percent.
New iPhone owners flooded the App Store during the holidays, downloading the essential apps for their new gadgets. But the Fiksu cost per loyal user index (a measure of users who opened an app at least three times) fell 4 cents to $1.75 per user from November’s $1.79. That’s just a 5 percent increase in costs year-over-year.
Another reason for the drop is that holiday users are enthusiastically using their new devices, and they’re more likely to become loyal users. The apps that they download the most are often the ones they care about the most.
Micah Adler, the chief executive of Fiksu, said that the decline in cost may reflect more maturity among mobile app marketers who refrained from spending or spent their money in a smarter way. Rather than trying to go “all in” during an expensive season for buying ads, they spread their marketing budgets across the entire season from Cyber Monday through the New Year.
Smart marketers are increasingly focusing their ad spend on traffic sources that return the best long-term value for their money. And there are new technologies like programmatic, real-time media buying that helps them drive down costs and benefit from the App Store traffic.
“Acquiring users is not the be-all-end-all for today’s savvy marketer,” Adler said. “Reengaging with users over time and solidifying user loyalty is the ultimate goal, and this month’s indexes indicate the early adoption of this strategy.”
As for the third-party companies that help developers spend their money, Adler said, “If the middlemen are doing their jobs right, this is an expected result: Bids get smarter and buying patterns get more targeted, so companies don’t have to spend as much to bring in the users they want. Frankly, this result is in part because of the middlemen: Technologies and smarter tactics are bringing costs down even as scale increases, driving ever higher value users. As programmatic buying continues to increase its share of the market, we expect that to continue to moderate prices even in the face of increased demand.”
Fiksu has accumulated more than 194 billion app actions to date. Those include user actions such as launches, registrations, and in-app purchases. The company says it has driven more than 2 billion app downloads for its customers.