Brands are having to up their spend to find loyal users even though app usage continues to increase, suggests the latest figures in the Fiksu Indexes.
The index measures show that in June the cost per loyal user (CPLU) was $3.21 – a rise of 30% on the previous month and 44% year on year.
This coincided with an increase in app downloads of 24% for the previous month according to the Fiksu App Store Competitive Index, which measures the average aggregate daily downloads of the top 200 free iOS apps.
The results show that whilst the increasing volumes of apps provides greater inventory for in-app advertising it brings with it its own challenges of precisely targeting loyal users.
However whilst the CPLU may have risen the increase in download activity has actually resulted in a reduction in the Cost Per Install Index (CPI). The measure, which tracks the cost per app install directly attributed to advertising, fell 9% to $2.12 month on month on android and down 21% to $1.15 on iOS. Although they fell month on month however the figures represent a year on year rise in costs.
The rise in CPLU is largely the result of that fact that whilst app usage is on the increase such usage isn’t being spread across apps, claimed Fiksu. Secondly the rising demand for mobile video ads, which are performing well for marketers, are also driving up costs, the company said. With video advertising a key source of loyal users for many advertisers’ fluctuations in video ad costs can have a significant impact on the CPLU.
“June’s results reflect the ongoing evolution of the mobile marketplace, as marketers continue their struggle to gain screen time with users. Increased competition for limited attention is causing a rise in overall costs,” said Micah Adler, CEO of Fiksu. “It is incredibly important for today’s advertisers to recognize and precisely target their audiences, and market to a more focused pool of engaged users.”