User acquisition costs for titles in Apple’s App Store reached a record high in June, as a change of approach from Apple around video advertising and the World Cup had an impact, according to app marketing company Fiksu.
For the first time in the four years that Fiksu has been analysing mobile app marketing, the cost per loyal user index passed the $2 mark to hit $2.23. This represented a 49 per cent year-on-year increase and a 25 per cent jump from the previous month.
Despite the high user acquisition costs, cost per install actually fell 23 per cent compared to the prior quarter to $0.98. For games, it fell to $0.85 compared with $1.11 in May.
The App Store Competitive Index, which measures the aggregate daily download volume among the top 200 ranked apps, dropped to 6.1 million from 6.6 million the month before.
While cost of advertising fell during June, it is clear that consumers were spending their time away from their mobile devices, something which Fiksu partly attributed to the impact of the World Cup.
Consumers were spending less time looking for and using new apps during the period, driving up the cost of acquiring loyal users.
Another likely factor was Apple’s re-evaluation of its policy of rewarding consumers for watching video ads, prompting advertisers to reduce their spending in the area. Without this route to acquire loyal users disrupted, acquisition costs rose.
Fiksu recently warned that app marketers are being hit by ‘app inflation’ as the cost of acquiring users and download volumes on Apple’s App Store soars.
The company said that with increasing download volume, app marketers will need to find more creative ways to find and retain users.