App Marketing Costs Hit New High In September

App marketing costs hit an all-time high in September, driven in part by Apple’s launch of the iPhone 6 and iPhone 6 Plus last month. The cost for acquiring a loyal user—iOS users who open an app three times or more after downloading—rose 34% from a year ago to $2.25, according to new monthly data from mobile app marketing platform Fiksu. That figure is also up 21% from $1.86 in August.

Fiksu pointed to the release of the much-anticipated new iPhone models on Sept. 19 as a factor driving up costs as app developers competed for the attention of these new users. “New device owners are active and enthusiastic about apps, and are prime audiences for adding multiple new apps to build out their devices,” stated the company’s analysis released today.

Apple sold 10 million of the larger devices in the first weekend alone, and last week reported selling 39.3 million iPhones across all models for the quarter ending September 27, up from 33.8 million in the year-earlier period.

Apple CEO Tim Cook said supply for the iPhone 6 “was not on the same planet” as demand.

Data from other Fiksu indices showed the cost-per-install of apps on iOS was up 41% to $1.23 from a year ago, while the cost-per-launch—which tracks the cost of acquiring a users plus subsequent engagement (divided by the initial cost)—increased 48% from a year ago, and 36% from August, to 29 cents.

Besides factors like increasing competition and user activity, people deleting apps to free up space for the latest version of Apple’s mobile operating system—iOS 8—also helped drive up costs.

Fiksu’s Completive Index—which measures average daily downloads of the top 200 iOS apps, increased 4% to 5.5 million from 5.3 million in August, but was down by 4% from a year ago. The company suggested the space limitations that required users to free up storage room for iOS 8 also limited the number of app downloads in September compared to a year ago. Another possible factor was Apple’s step to cut the number of apps shown in its top charts to 150 from 300, reducing visibility for some titles.

For app developers on Google’s Android platform, marketing costs overall were lower than on iOS. The cost-per-launch on Android dropped 10% to eight cents, down 10 percent from August and 9% from a year ago. The cost-per-install, however, increased to a dollar, up 14% monthly and 33% yearly.

“The launch of a new iPhone and iOS in September only sets the stage for app marketers as they head into the busy holiday season. We expect to see even more activity as a result of the new iPads and Android devices from Samsung and Google’s Nexus family in the coming months,” stated Fiksu CEO Micah Adler. 

The company says its findings are based on tracking of 3.3 app installs and 4.7 billion app actions across 1.7 billion devices.
3 comments about "App Marketing Costs Hit New High In September".
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  1. Brooke Molineaux from ASU, October 27, 2014 at 7:40 p.m.

    “New device owners are active and enthusiastic about apps, and are prime audiences for adding multiple new apps to build out their devices,” when an iPhone user purchases the latest device, they are looking for the latest apps to go along with their phone. I know that the most talked about apps is the Apple Pay and the GoPro app. They are new innovative apps that allow the iPhone user to experience more with their latest device.
    Just about anything a user does with an app will drive up the cost these days such as deleting an app to free up space due to the ost recent update, iOS 8, and retaining a loyal user (opening the app three or more times), etc. These findings are based on 3.3 billion app installs and 4.7 billion app actions across 1.7 billion devices. With Androids new devices being released in the coming months and Apple’s iPad release date set, I only foresee the cost and activity being driven even higher than it is now. The average daily app download of the top 200 increased 4% from 5.3 million in August to 5.5 million. App developers need to start preparing as we get closer and closer to holiday season as this is when everybody is purchasing smart phones and devices as gifts- this is when app marketing hits an all time high for the year. This all time high of costs is heating up the game for app marketers and I presume that we will be seeing an increase of marketing as the holidays approach.

  2. Isaac Pedroza from Arizona State University, October 28, 2014 at 1:26 a.m.

    Application on devices have quickly been something that has been one of the main things we need on our devices. For many things that we are interested in or even do as a task, there is an app which can sometimes make things a lot easier for us. Why do you think the term, "There is an app for that," came from. Also with some apps being less than five dollars or even less than one dollar many users would spend that for an app that will help with their daily lives. So of course app purchases will be increasing over a period of time especially with technology advancing.
    Well let's talk about the new IPhone which personally I am not too fond of. The Iphone yes, was and still is one of the pieces of technology most talked about and well most wanted by anyone. With the release of its newest model it grabbed the interest and attention of many people. I believe with the release of the IPhone 6 many non apple users decided to take their chances and try out the device to see if it was worth all the hype. With many interested in it come the purchase of many applications, also considering the lower amount of apps that are located on ITunes which are free. I can easily see the increase of their apps being purchased because of such current events. So I believe the reason for the increase in applications being purchase was due to the fact of how well the new IPhone 6 was advertised or even how many people were interested on the new device.

  3. Nicole Baron Dietrich from Arizona State, October 28, 2014 at 2:36 a.m.

    It makes sense that the price of app marketing costs would go up in accordance with the anticipation of many downloads. With the release of the new iPhone 6 it can be assumed that people will download apps like crazy. I think it was a brilliant idea to have the price of app marketing costs raised during this time because it will only bring in more profit. The demand for iPhone 6’s has been very high and I think it will probably remain that way for a while. App marketing costs should continue to stay up, at least until demand for iPhone 6’s decreases significantly. Apple’s new iOS8 update has significantly impacted the app downloads and I wonder if that will affect the advertising that takes place in apps? Also, Google’s Android Platform is not performing as well as Apple’s iOS8, in regards to app downloads, so this could affect app marketing costs as well. Just like the article states, I predict that app marketing costs will remain up with the upcoming holiday season. I’m sure many new phones and mobile devices will be purchased for the holidays, which impacts marketing and ad space in apps indirectly because new apps will be downloaded on these devices. As much as I dislike advertising within my own apps, it does serve a purpose for the company that is advertising, and I can respect that as person who enjoys marketing and advertising. I will be interested to see how the app marketing costs play out over the next few months.

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