App surge challenges marketers

Warc, 3 July 2014

BOSTON: As more people go online using mobile devices and consume media via apps, marketers are finding it increasingly difficult to recruit and retain loyal app users.

Fiksu, the app marketing specialist, reported that aggregate daily downloads of the top 200 ranked apps grew 24% during May 2014 while its Cost per Loyal user Index rose 17% month-on-month and 34% year-on-year.

"It's very clear that the cost of app marketing and the competition for downloads is on a constant upward trajectory: what we're calling app inflation," said Micah Adler, CEO of Fiksu.

"The increased quality and growing popularity of apps continues to fuel ever-increasing demand, meaning marketers must continually hone their new strategies and spending in the quest to cost-efficiently acquire loyal and engaged users," he added.

Data from comScore charts the trend towards greater use of mobile generally and mobile apps in particular. Over the past year mobile's share of US users' digital media time has increased from 50% to 60% (May 2013 to May 2014). Most of that activity took place via apps, whose importance was underlined with the news that in May 2014 they now accounted for 51% of media time, up from 43% a year earlier.

ComScore found that several content categories were now almost exclusively mobile, including radio (96%), photos (96%), maps (90%) and instant messaging (90%). Others were well advanced on the same road, with over three quarters of time being spent on mobile, including games (86%) and telecoms (76%).

These developments, said comScore, would require "innovations … that will help media companies and advertisers improve the delivery and monetisation of mobile ads".

Fiksu noted the difficulties involved for app marketers as a decline in the Cost per Launch had been driven by an increase in "super users" who launched an app dozens of times in a day. But this created more of a challenge for marketers looking to gain mindshare with users and convert them to loyal fans, hence the rise in Cost Per Loyal User.

Data sourced from Fiksu, comScore; additional content by Warc staff