Marketing costs for iOS apps reached their highest level since 2011 in July as the cost of acquiring loyal users surged as download volumes only rose slightly.
Apple’s recent incorporation of app ratings into its App Store ranking algorithm meant that highly-rated apps moved up the charts, forcing developers of mid-ranked and lower-rated apps to spend more money to regain their positions.
App engagement company Fiksu’s Cost per Loyal User Index increased 20 per cent July, to $1.80, compared to $1.50 in June. This made July the most expensive month for app marketing since December 2011.
“App marketers must now work even harder to generate positive ratings from engaged users, since user acquisition costs for apps without stellar ratings will now be more expensive,” said Micah Adler, Fiksu CEO.
In addition, the increasing number of brands making use of Facebook’s mobile app install ads drove up costs and competition.
The general increase in app activity during the height of the summer in the northern hemisphere also played a role.
The Fiksu App Store Competitive Index for July showed an average aggregate daily download volume of 5.8 million for the top 200 free iPhone apps in the US. This was up 4 per cent compared to the prior month and 33 per cent year-on-year.
Competition increased as mobile marketers targeted consumers who were using apps more than normal as holidays gave them more free time.
“With a new iPhone just a few weeks away and the holiday season coming up, delivering quality app experiences has never been more critical for app marketers seeking to climb rank and meet monetisation goals,” added Adler.