App Marketing Costs Rise in April

App marketing costs rose in April after a two-month decline as mobile app developers paid up to acquire new users, according to the latest monthly report by mobile marketing firm Fiksu.

The company said that a surge of spending by big brands in March dropped off last month, underscoring the higher costs paid by smaller apps and games to attract “high-value” users in campaigns. “This is in contrast to many bigger brand spenders who are often more focused on overall volumes and lower costs per acquisition,” the company stated in an analysis posted Friday.

Marketing expense for developers to gain loyal customers — those who open an app three or more times after downloads — increased 5% to $1.52 in April, while the cost per launch increased 30% to 13 cents for Android and 20% to 21 cents for iOS. The rise to $1.52, though, is still well below the $1.80 level reached in January.

The cost per install index (CPI), which track the cost of getting an app download, also rose 21% for Android to $1.31, and 28% for iOS to $1.24.

The company’s App Store Competitive Index, which tracks download volume among the top 200 ranked iPhone apps, dropped 25%, to 5.34M from March's 7.1M peak. Fiksu, however cautioned the trend doesn’t mirror the broader app landscape. “Download volumes are simply being spread out across a wider set of apps than measured by the Index,” it stated.

As a result, the report suggested April was a good time for apps outside the top 200 to try to gain more visibility from increased marketing spend while big brands held back on spending before gearing up for summer campaigns.

Separately, Fiksu on Thursday released a new study indicating Facebook is a more efficient way to promote apps than more traditional online methods. It found the social network delivers nearly 50% more users who make in-app purchases compared to banner ad networks, and 12% more than video networks. At the same time, the cost is 20% less than banner networks and 8% lower than video networks.

The app-install ads run by game and other developers on Facebook are a big reason why the company’s mobile ad business has exploded, going from almost nothing a few years ago to nearly 60% of its ad revenue in the first quarter.

The findings were based on a sample of user acquisition campaigns for 294 iOS and Android apps from a variety of categories across Fiksu’s app network. The campaigns that ran from the second quarter of 2013 through the first quarter of 2014 were compared with those on 25 banner, game-focused and video ad networks.

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