A new Fiksu report has revealed that marketing costs, which have been on the rise all year, finally fell in May, although app install volumes were also on the slide.
The cost per loyal user (CPLU) in May for mobile marketers was $2.47, a 10 per cent decrease from the month before.
“While advertisers are seeing value at the current prices, costs can’t continue rising indefinitely and May represents a slight market correction,” the report noted.
“As brands explore new tactics, particularly on the audience buying side, a shift towards smarter targeting has impacted both volume and cost as marketers buy more of what’s working and less of what’s not,” it added.
App install volume also declined as the Fiksu App Store Competitive Index, which tracks the average aggregate daily downloads of the top 200 free iOS apps, decreased 17 percent to 6.7 million in May.
The Cost Per Install Index (CPI) fell to $1.46 on iOS, a decrease of 31 per cent since April and 3 per cent since last year, while on Android it continued upward to $2.33, increasing 12 percent month-on-month and 93 percent year-on-year.
According to the report, while the difference appears drastic, “some of it can be attributed to the fact that the metric includes incentivised spending, which is far more popular and effective on iOS than Android and carries a much lower cost per install”.
The Cost Per Launch Index (CPL), which tracks the cost to drive mobile app engagement, decreased 31 per cent on iOS to $0.28 this month, although this was up 13 per cent year-over-year. On Android, CPL decreased 14 per cent to $0.30, although this marked a 188 increase percent year-over-year.
May also saw a drop in download volume, for which the report says multiple factors were responsible, one of them being Apple’s adjustments to the games section of the App Store in May.
“Shifting from algorithmically generated lists, based on download volume, to curated lists based on editorial content, Apple’s moves addressed the discoverability problem and spread downloads across a larger pool of apps,” the report said.
However, those downloads may be distributed outside of the top 200 apps, falling outside the scope of the indexes.
“While we have seen seasonal slowdowns of app marketing during the summer months in prior years, May’s results also reflect brands implementing more precise audience segmentation,” said Micah Adler, CEO of Fiksu.
“While Facebook has been a preferred tool to reach mobile audiences, rising CPIs in 2015 has caused some marketers to look for ways to reduce costs and focus their spend on the right groups of users. As we predicted last month, smarter spending across the ecosystem will, in due course, cause loyalty rates of app users to improve,” he added.