User Acquisition Costs on iOS Rise as Consumers Hold Off on Downloads For Next iPhone, Fiksu Says

The amount that mobile developers had to spend on marketing to get a loyal user rose in August as consumers downloaded fewer iOS apps, according to Fiksu.

The Boston-based company, which mediates between different ad networks to find the cheapest way for mobile developers to get new users, analyzed downloads on the iOS platform last month. It found that the cost of getting a loyal user — or a customer who opens an app at least three times — rose to $1.54 from $1.20 the previous month.

Downloads in the iOS app store fell to 4.06 million in August from 4.25 million the previous month. While it’s hard to ascertain exactly what caused the drop, Fiksu’s theory is that consumers are holding off on app downloads in anticipation of the iPhone 5. Consumers have also probably slowed down their purchases of the iPhone 4 as they wait for the next model, so that means fewer brand-new users are coming on-board.

“That data is definitely subject to interpretation,” said Fiksu chief executive Micah Adler. “We certainly don’t know of anything else in the ecosystem that would have this kind of effect on people’s behavior within the app store.” Adler said the company saw a 30 percent drop in organic downloads, or the kind where consumers seek out apps themselves in the store instead of installing them through ads or cross-promotion.

Adler also said that the company is still seeing the effects of Apple’s crackdown on incentivized downloads, where users can get virtual rewards in exchange for installing other games. Conventional display ad networks are still continuing to benefit as developers move away from doing offer wall-type promotions on iOS.

Publish date: September 28, 2011 © 2020 Adweek, LLC. - All Rights Reserved and NOT FOR REPRINT