Cost of mobile app user engagement for the first-time events

Cost of mobile app user engagement for the first-time events

Today, the mobile media channel accounts for more than 50% of time spent with all digital media. The mobile space is growing, moving and transforming incredibly fast adding more sophisticated tasks and challenges in everyday jobs of marketers, product managers and engineers. Being so young and quickly growing, the mobile space is also lacking best practices to guide our efforts. Unfortunately, building a great mobile app isn’t the cure for a successful mobile app business, ensuring you striking growth and a stable revenue stream. App owners are still striving to decipher the mobile business success code using all tools available today. The company Liftoff has recently published the Mobile App Engagement Index Report, Q1 2015 covering this issue.

In this article, we aim to clear up the benchmark for the cost of mobile app user engagement for first-time events and focus on key milestones covered in the report. Answer key questions about the impact of paid media on app engagement and setting cost-per-engagement benchmarks for the most common “post-install” events that users complete on mobile.

We will examine the first time events completed by users on their mobile devices such as registering, sharing content, making a reservation (hotel, taxi, etc), making a purchase and subscribing to a paid service offered inside the app.

To establish mobile cost-per-action (CPA) benchmarks, we calculated the cost to acquire a new user from app install campaigns who engage in a post-install event for the first time. We found out that companies in Q1 2015 spent an average of $9.54 to acquire a user for mobile app install ads. The cost for all events are listed below:

  • Registration – $9.54
  • Social sharing – $23.14
  • Reservation (taxi, hotel, etc.) – $42.19
  • IAP – $86.57
  • Subscription to paid services – $202.33

In Q1 2015 we saw significant differences in mobile CPAs between iOS and Android. The CPA for a registered user on Android was 42% less than iOS and the CPA for sharing content on Android was 24% less than iOS. Additionally, iOS was more cost effective than Android during Q1 2015 for such transactional events including reservations (7% less), IAP (20% less) and subscriptions (22% less).

As for genders, the CPAs showed us differences for the cost per share (30% less) and cost per purchase (40% less), which were significantly lower for women, suggesting women have a stronger interest in sharing and shopping. The cost per registration was nearly identical between men and women. Men, however, demonstrate a slightly stronger interest in paid subscription services. The cost per subscription amongst men was 3.6% less than women. The cost per reservation was also lower amongst men by 4.0%.

Mobile CPA benchmarks and conversion rates continue to shift, impacted by gender, seasonality, OS platform, ad inventory and increasing competition. While Android succeeds in offering the lowest cost per non-transaction event, iOS continues to be the platform where businesses can generate the most revenue. Bigger advertisers will continue to invest more on mobile, improving their apps and spending more on paid user acquisition. This will put additional impact on both CPIs and CPAs.

Oles Dzyub,
Branded Content Manager at ComboApp