App User Acquisition Price Goes Up in 2015

Research Kit Tools

Every quarter the cost of acquiring mobile app users rises with a new wave. It’s clear that these permanent take-offs for both download activity and user acquisition costs are here to stay, witnessing a far more expensive mobile marketing landscape then we’ve seen in years past. The cost-per-loyal-user index, which measures the price of acquiring a user who opens an app at least three times, is hitting an ultimate high.

Last February measured 6.8 million daily downloads, 51% fewer downloads than this year, and the cost to acquire a loyal user was at $1.59, versus this month’s $2.80. It’s important to note that even though costs are rising, app publishers and brands continue to invest in mobile advertising. eMarketer estimates that 2015 is the year when mobile ad spending will surpass desktop digital spending in the US with almost $29B being spent and $3B of that on mobile app install advertising alone. That kind of spending growth wouldn’t happen if advertisers weren’t seeing value in their returns.

The index analysis also revealed minimal fluctuations in marketing costs across iOS and Android platforms. The Cost per Loyal User Index (CPLU), which measures the cost to acquire a loyal user for brands who actively market their apps, decreased only 3% to $2.80. The Cost Per Install Index (CPI), which measures the cost per app installs directly attributed to advertising, did not change on iOS from January, steadily staying at $1.28. On Android, CPI decreased only 1% from January to $1.51 in February. But CPIs on both platforms are up over the last year with 16% on Android and 17% on iOS.

In the upcoming months, marketers should be prepared to change their budget priorities and spend wisely as they enter a period of renewed app investment for many brands. As user acquisition by means of mobile advertising becomes more expensive and sophisticated, marketers should consider the support of reliable mobile app marketing partners, helping them to tailor their strategies and improve their audience targeting and user experience in order to achieve the massive scale they need for their campaigns despite growing competition.

Oles Dzyub,
Branded Content Manager at ComboApp