Today’s app store landscape is being totally dominated by the famous duopoly – the Google’s Play Store marketplace and Apple’s App Store. With the total number of mobile apps recently passing 5.5 million and, at the same time, mobile users using only a handful of apps regularly, competition among apps continues to grow rapidly and with no signs of slowing down. In this environment, no wonder that app marketing costs constitute a bulk of a brand’s marketing expenses and many indie app developers struggle to get their apps discovered on the app stores, let alone get them connected with loyal mobile users. On the big brands side of the app marketing equation the challenges are both to reach and retain app users on scale.
So how much does it cost to market an app? Today mobile app marketing costs consist of many important components that cover the entire lifespan of an app and can be divided between three stages – Pre-Launch, Launch and Post-Launch. Further on we are covering app marketing campaign constituents that represent these three stages.
Table of Contents
- App Pre-Launch Costs
- App Market Research Costs
- App Beta Testing Costs
- App Store Optimization Costs
- App PR Outreach Costs
- Influencer Marketing Costs
- Viral Marketing Costs
- App Promotion Assets Costs
- App Launch & Post Launch Costs
- App User Actions Cost
- Push Notifications Platforms Cost
If you need a quick glimpse into what app marketing cost components look like use the following key data points list for the reference.
Key Data Points
- App market research – $5k…$15k
- App beta testing – up to $5k
- ASO tool – $25..$1,500 / month
- App marketing agency pricing – up to $25k / app
- App PR outreach – $100…$300 / hour
- Influencer Marketing – $10…$18k / month
- Average Cost Per Install (CPI) – $2.89 / install
- Cost Per Action (CPA): Register – $4.58 / install
- CPA: Register: In-app purchase – $102 / insall
- CPA: Purchase – $40 / install
- CPA: Subscribe – $87 / install
Let’s look at the trajectory of app marketers spend in recent years. According to the 2016 research conducted by the leading digital advertising technology company Kenshoo, in Q2 of that year mobile app marketers spent 54% more than the previous year.
Chris Costello, Director of marketing research, Kenshoo, says:
“Mobile apps are now ubiquitous, with an emerging delineation between ‘task’ and ‘diversion’ apps that require a different set of rules for marketers,” said Chris Costello, director of marketing research for Kenshoo. “‘Task’ apps must be marketed as essential to day-to-day existence and prove valuable on that front, whereas ‘diversion’ apps, like big gaming, roll out like Hollywood blockbusters with marketers focusing on getting noticed in an increasingly crowded space.”
Ad spend for mobile app ads in Q2, 2016, indexed volume
Next up is the general picture of what kind of app marketing activities marketers need to allocate and spend their budget on. On the following graph you can see a broader picture of what constitute to an app marketing plan. Not all components cost of this plan can be calculated but at least we can provide a ballpark.
Mobile app marketing plan
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App Pre-Launch Costs
The Pre-Launch components are a market research that needs to be conducted before any steps are taken, beta testing, to make sure a mobile app is ready for launch and possible bugs won’t create a blowback once it’s launched on an app store. As well as App Store Optimization to make sure an app will be found by its potential users and appeal to them enough to be downloaded and actually used afterwards.
Media coverage with various publications, being covered by influential bloggers and vloggers and various actions to tap into viral marketing are also important at this pre-market stage. It’s important to create an anticipation, an awareness of the app before it hits the market so people know when to go to app stores to download an app right after it was released.
In addition, all marketing assets such as a website, Social Media accounts and any graphics associated with it need to be ready to create a cohesive look for an app across all marketing channels app users will be discovering the app.
Because mobile app is a product like any other that needs to meet certain people’s needs, any app marketing starts with a market research to define the market and if there are needs that the app will meet. Such research on average may cost between $5,000 and $15,000.
App Beta Testing Costs
To ensure that an app is ready to be release on a market and serve its users well, it needs to be tested. According to one research such beta testing may caused up to $5,000.
App Store Optimization Costs
ASO or App Store Optimization is a process of tuning a mobile app’s marketing copy – keywords, title, description, screenshots, icon to improve its chances to be found on an app store by its potential users. To do ASO for an app brands and indie developers may either perform it in-house if a proper expertise is in place, use online tools or hire an app marketing agency to take care of it. An average price for ASO tool ranges from $25..$,1,500 / month, depending on keywords volume analyzed and specific features. To hire an app marketing agency to carry on an App Store Optimization, brands or app developers would need to pay for ASO service as a part of an app marketing package that may costs north of $1,000 and up to $25,000 per app.
App PR Outreach Costs
One of the app marketing techniques that is well established is PR outreach and pitching an app to online publications via a press release or direct communication. This technique is time consuming and require having established relationships with media to increases chances of an app to be actually covered on specific publications. On average a PR agency would charge an app developer or a brand $100 – 300 / hour for media outreach.
Influencer Marketing Costs
Tapping into the power of Influencer Marketing is one of the recent trends for many industries and app industry is one of them. Essentially influencers are capable to deliver for brands and app developers what previously was available only with celebrities – an endorsement. An Influencer Marketing platform may cost to a brand $10,000 and up for a campaign to connect an app with its audience. An Influencer Marketing agency management fees may reach $10k – $18k a month and so, obviously, both options aren’t on the table for an indie developer and only big brands can allocate certain amount of an app marketing budget for such kind of marketing.
Viral Marketing Costs
Ironically Viral Marketing shouldn’t involve any costs by definition but still – some app brands may try to ignite it by launching Facebook / Instagram / YouTube paid ad campaigns to spread the message about an app and finally get it viral with no extra expenses down the road. In this case marketing a budget for such viral popularity inducing paid ad campaign may vary significantly.
App Promotion Assets Costs
Any mobile app, regardless of app category and complexity, requires creating an online presence in a form of a website and social media channels on all of some of the top platforms such as Facebook, Twitter, Instagram, YouTube, Pinterest. App developers and brands have two choices – either hire web design studio to create a website and in this case it would cost around $5,000 – $25,000 or use online website builder from such company as Squarespace that charge $18 / month for a business website. Even though social media accounts creation itself is free but the graphics for each should be developed professionally to ensure visual consistency for an app’s brand online.
App Launch & Post Launch Costs
Once a mobile app is ready to be launched, the most important kind of an app marketing cost will be CPI, aka Cost-Per-Install, and CPA, aka Cost-Per-Action. Both brands and indie app developers will need to spend big portion of their app marketing budget to acquire users for their app and even more to get them perform a specific action(s) that is expected – register an account, make in-app purchase, subscribe to a service or make a reservation.
The following graph brings up a cost for getting an app install using Facebook Ads in various countries in the four quarter of 2017. Because Facebook is the two biggest digital advertising platforms of today, we can use these figures as a proxy for how much does it cost to get an app install in various locations in general. It’s interesting to see Panama being the country where an app install via Facebook costs the most – $10.39 / install and on the other side of the spectrum is UK with $3.7 / install.
Cost Per Facebook App Install by Country (Q4, 2017), in USD
It’s well established fact that there is a significant difference between how much does it cost to acquire a mobile app user on the iOS platform and Android. The reason for such difference exists is that, number one, there are much more smartphones running Android OS in the world and number two – people who buy Apple products are different from Android OS user base in terms of where their geographical location. In Europe, Latin America and India the majority of smartphone users use Android phones, in US Apple leads and Asia is a mix bag. The following graph covers the period of 2017 and presents the quarter by quarter breakdown for CPI of iOS and Android apps on iPad, iPhone, Android smartphone, Android tablet and desktop. The prices for Q4, 2017 range from almost $6 per iOS app install on iPad to about $1 per iOS app install an iPod Touch.
Cost Per Facebook App Install by Platform (Q4, 2017), in USD
App User Actions Cost
The other crucial app marketing cost, that is essential to measure for running an effect app marketing campaign , actually trumps Cost-Per-Install in its significance because it covers the most important aspect of an app marketing – specific action that app marketers expect mobile users to take. Getting mobile users to install is only the first step in a mobile app life cycle, for a mobile app to be profitable app marketers need to get their app users to take an action that the app suggests, such as registration, placing a reservation, making in-app purchase, buying a physical product or service, subscribing to a service on a recurrent fashion. Apart from an app install, the cheapest action achieve is registration that costs $4.4 for iOS and $2.9 for Android, the most popular monetization mechanism – in-app purchase costs marketers to achieve $132 on iOS and $145 on Android. The most expensive mobile app user action brands and indie developers pay is subscription that costs $129 for iOS app and staggering $187 for Android apps. This is why it’s so important for brands and app developers to retain mobile users that eventually subscribe to recuperate the costs of acquiring them.
App Acquisition Costs by Action & Platform, in USD
Push Notifications Platforms Cost
One of the most effective and widely adopted mobile app marketing tools are Push Notifications platforms that allow app marketers to communicate with their apps user base to keep their loyalty and avoid them churning away, which is the epidemic problem they need to deal with. Depending on a number of subscribers that specific plan supports, as well as extra features and API access, the pricing for Push Notification services may lay within $30 – $250 / month.
Summing up all kind of app marketing expenses mentioning above, we may come up with a figure of at least $10k that is necessary to plan an app go-to marketing strategy. Because app industry is extremely crowded, talking about doing app marketing for free does not make any sense anymore, regardless of industry and app’s purpose. Because the ultimate competition that app marketers are in is about people’s time and attention it’s become paramount to allocate app marketing budget on marketing channels that are capable to deliver the message to potential app users when it’s appropriate and when they are receptive to this message. Doing otherwise would be simply wasting an app marketing budget.