Mobile marketing costs for apps are reaching an all-time high

One of the key interests of an app developer is to achieve app downloads. If an app has a loyal user (mostly defined as using the app more than 3 times a week), the user provides high value to the app in terms of providing information as well as being a marketing target. Hence, the money spent on mobile marketing to turn app customers into loyal customers has increased significantly over time. According to Fiksu, an app marketing technology provider, the average money spent per customer to make him a loyal customer was $2.25 in September, an all-time high. The graph below from Fiksu illustrates this cost development and average money spend per customer from beginning of 2012 until today to turn a customer into a "loyal" customer.

 COST PER CUSTOMER TO MAKE HIM "LOYAL"

Source: Fiksu cost per loyal user, graph found in TechCrunch article on 10/27/14

I see three reasons to explain this development:

1. Approaching holiday season: When looking at the previous years, always towards the end of the year, the average money spent per customer increased. I see the rationale for this in the fact that many people get new phones/ gadgets as a present during the holiday season and then they are going to the app stores and fill their phones/gadgets with new apps. Hence, it makes sense for marketers to increase the money spent per customer during that season as there are so many "new targets" out in the app stores.
    
2. Launch of iPhone 6: The launch of the iPhone 6 of Apple was again a big worldwide hit. According to the Forbes' article on iPhone 6 sales, Apple sold 10 million new phones only within the first three days. This has exactly the same effect as the holiday season effect I described above. So many new iPhone users a browsing the app stores after buying a new phone and looking to find "cool" apps to install on their device. For marketers it makes a lot of sense to increase the marketing money spent per customers during such occasions.
   
3. Installing iOS 8 on phones: A third reason I can see is the launch of the iOS 8 for all iPhones. This installation required the users to free up space on the phone to update OS over-the-air. This has an effect that many apps get deleted and app makers had to focus even more on finding new customers, which again can be explained with an increase in marketing money spent per customer. 

The next months will show if these increased investments by mobile marketers will actually monetize and the apps will survive/ become even more popular and make money on it, or if they simply disappear and users will have to delete the apps because they are out-of-service.


Source: http://techcrunch.com/2014/10/27/following-iphone-6-and-6-plus-launches-app-marketing-costs-hit-an-all-time-high/