App store competition is on the rise, making it ever harder and more expensive for developers to successfully market their apps. But how much does it really cost? Let’s start with the dream goal of getting your app into a top 25 app chart.
According to Fiksu research, it can rake up $200,000 in ad expenses to push an app into the US top 25 iOS app ranks. Canada is a bit cheaper at $15,000. In Germany, top app ranks can easily cost $65,000 in advertising expensive; $45,000 in the UK, $30,000 in France, $35,000 in Brazil and $10,000 in Thailand.
App store rank costs by country
Tom Cummings, Director, Account Management, Fiksu, explains:
“Visibility in the iOS App Store is a great way to get more organic downloads – but climbing the ranks can be hard. Paid app promotion to generate downloads can help propel you to the top of the charts – but cracking the top 25 overall free apps in the US is an expensive proposition. We’ve calculated what it takes to get to the most visible ranks in App Stores around the globe and complied the results to give you some alternatives to the pricey US market. While the US App Store remains the most lucrative, marketers with the option of promoting in other countries should at least consider app marketing that takes advantage of much lower costs to get top 25 visibility or better.”
Interestingly, Germany spends more on Android app install ads, compared to iOS, whilst UK budgets are higher for iOS.
Germany spends more on Android app installs than iOS
Mobile ad network, InMobi, recommends that publishers estimate their user’s lifetime value in order to determine the budget they are going to spend on acquiring users. Knowing the Cost Per Install (CPI) is an important measure for developers to know how much they’d pay for a download of their app. (You can find a full guide on CPI across our affiliate networks here.) Cost Per Download (CPD) varies depending on the lifetime value of an app user. As an example, travel app developers generally pay more to acquire a user compared to game developers, because their anticipated revenue is higher.
InMobi’s research shows that CPD is lower in markets such as China, Japan and Korea, with India being the cheapest. In comparison, the UK and Australia are expensive markets.
CPD by country
Similarly, a report from BI Intelligence found that retention and user rates of apps remain a core challenge for publishers. Around 52% of apps lost at least half of their users after three months. With app stores already significantly overcrowded, CPI on iOS reached 59% in October 2014, with user retention costs even higher and up 33% the year over.
Stefan Maeascher of stefanmaescher.com set out to test CPI across various platforms over a period of three months and a total budget of $10,000. He found that CPI was lowest on Facebook at $1.43. The social network also performed well for user loyalty. Twitter ranked second best for CPI at $2.53 followed by Adwords at $5.00. iAds performed badly with low traffic volume and weak scalability.
CPI by ad provider
Taking a closer look at increasing budgets for app promotion, a study by marketing company Kenshoo found that app installs from mobile app ads rose 346% in Q2 2015 the year over. Click to Install rates were one in three. Whilst ad spend was up 293%, CPI was down 12%, making it even more attractive for marketers to budget for app ads.
Ad spend for mobile app ads was up 293% in Q2 2015
Chris Costello, Director of marketing research, Kenshoo, says:
“Marketers have jumped into mobile app marketing with both feet, substantially boosting spend. The dramatic increase in total app installs is great to see, and as bidding algorithms focus more on those types of conversions, it will give app marketers plenty of room to improve. Increasing competition is another big part of the story; so marketers should continue refining their targeting strategies, optimizing toward campaign-specific KPIs and utilizing new ad inventories as they emerge.”
With most developers not having a budget of $200,000 to push their apps into the top iOS charts, there are still many best practices that can be applied in order to optimise ROI and get the most out of each ad dollar spent. In addition to the tips pictured below, developers should market apps before the launch of a new mobile device, because competition to advertise is fiercer post-launch of the latest hardware must-have. Once installed, rewarded in-app ads are a powerful way to keep your audience engaged and increase their lifetime value.
Tips for app promotion