App downloads are in decline as user acquisition costs drop 8%, says Fiksu

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The latest March Fiksu Index from mobile marketing firm Fiksu, shows that the app download hype is slowing down as user acquisition costs fell $3.21 – a drop of 8% since February. Fiksu defines loyal users as those opening an app three times or more.

Loyal user acquisitions costs drop 8% month-on-month

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Source: fiksu.com

Another indication of the slump is the App Store Competitive Index which declined 7% between February and March 2016 and 11% year-on-year to 7.6m downloads.

The App Store Competitive Index dropped 11% from 2015

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Source: fiksu.com

Whilst apps may have previously dominated consumer time on mobile, that trend is slowing down and 88% of users spend their time within just five apps. In addition, a comScore study highlights that smartphone users aren’t searching for apps to download on a regular basis anymore.

For marketers this has meant learning to target people who are already associated with a brand or specific app, by incorporating lookalike and persona targeting instead of just employing re-engagement tactics.

Lifetime app users have become more important than the sheer number of app installs. In line with these findings, Fiksu has announced the retirement of its Cost Per Install (CPI) Index. The company writes:

“With today’s mature app market, CPI is no longer a good gauge of an apps’ success: targeting, tactics, and competition in specific categories can dramatically shift CPI for any one app campaign.”

It won’t get rid of the CPI metric altogether since it can still be useful to measure ROI and compare user acquisition costs, but the rewards for finding loyal users have become a greater goal.

Micah Adler, CEO, Fiksu, adds:

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“As the app market has evolved, so has our analysis and measurement of what is influencing it. Today, marketers need to be segmenting their users more precisely and analyzing their results to reflect that user segmentation as well. App users aren’t a single, monolithic group, and that’s why advertisers can’t measure against a single cost per install. Smart marketers should be willing to spend different amounts for users that have different lifetime values.”