Over the past several years the number of people making and marketing mobile apps has skyrocketed. It is not surprise since the amount of money people are spending on apps has also been steadily rising and is now a multi-billion dollar per year industry. Whether you’re promoting a ‘freemium’ game, a paid app or one that makes money from ads, you’ll never be a success if people don’t know that it exists.
This is why people have been paying for ads on mobile devices, including within other apps, that will promote their own app. For the past several years this has been a fairly affordable way to get your app the attention it needs. Up until recently, the price of these ads was quite affordable since as the demand for ads went up, so did the supply thanks to the rapidly growing mobile market.
While more and more people continue to start using mobile devices every day, the rate of growth is no longer able to keep up with the demand for app ads. For this reason, among others, the price per loyal user is starting to go up significantly, at least according to a recent report from Fiksu.
The report that they just released found that the cost per loyal user is now $3.21 as of June of this year. That is a 30% jump since just April and already 44% up since the beginning of the year. Looking back just till last November the cost was barely over $1.50 for each loyal user.
Why the Spike
There are a number of reasons why the prices are shooting up so rapidly. First, while people are spending more and more time on their mobile devices, they are not using a higher number of apps. This means their time is focused within a smaller number of apps that they use for longer periods of time.
This is a bad thing for people who want to get their app used, but once someone is using a specific app it is likely that they will spend a higher than expected amount of time on it. For this reason, mobile app ads really make sense. Even if you’re paying a premium for the ads, you can often make an excellent return on investment because of the fact that users are spending so much time (and money) on each app.
Micah Adler, CEO of Fiksu, said of this report, “June’s results reflect the ongoing evolution of the mobile marketplace, as marketers continue their struggle to gain screen time with users. Increased competition for limited attention is causing a rise in overall costs.”
This really is a simple case of supply and demand. For anyone who is marketing apps, whether their own or for someone else, it is important to make sure you are doing all you can to get the most out of every ad dollar spent. If you are able to run a successful ad campaign, the returns can be very significant. If not, however, you can quickly waste a lot of money on the effort.