App user acquisition costs reach record high

It’s becoming more expensive for brands to acquire loyal users via mobile. The latest Fiksu Cost Per Loyal User Index (CPLU) broke all previous records at $2.80 in February 2015, making for a 76% rise year-over-year with a slight dip of 3% from January to February 2015. The year-on-year increase is the largest recorded to date.
Cost per Loyal User Index: February 2015
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The spike is partially due to increased app usage during the holiday season. Using targeted and precise advertising, marketers are experiencing greater rates of success to reach users who are actively engaging with their products.
But greater engagement doesn’t come cheap. Costs per App Launch (CPL) increased by 18% for Android from 2014 and 21% for iOS.
CPL Index: February 2015
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Micah Adler, CEO of Fiksu, says:

“As we smash yet another milestone with 10.3M daily app downloads in January, it’s obvious that the consumer appetite for apps has never been fiercer. But long term success for apps requires marketers to put data to work so they can target and acquire the most valuable users. While that does mean higher costs per user acquired, long-term results are significantly improved by bringing in users who are more likely to become ROI-positive.”

App downloads in February 2015 were up 43% from 2014 and down 6% from January. The dip can be attributed to decreased post-holiday spending as well as the shorter month.
Cost per Install (CPI) trends were fairly stable with increases of 16%-17% for Android and iOS respectively the year over.
Cost per Install Index: February 2015
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Despite growing costs, marketers are experiencing significant return from their campaigns. A recent report by eMarketer found similar patterns and predicts a 50% growth for mobile ad spending, surpassing desktop digital spending in the US.
Find the full Fiksu report here.

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