The Impact of iPhone 6 and iOS 8 on App Marketing Costs
Introduction
The successful launches of the iPhone 6 and iPhone 6 Plus, along with the release of Apple’s new mobile operating system iOS 8, have had a significant impact on the marketing costs associated with gathering downloads for mobile applications. According to a recent report from app marketing technology provider Fiksu, the costs associated with retaining a ‘loyal user’ – someone who opens an app three times or more – are at an all-time high.
Retaining Loyal Users: A Growing Challenge
The cost of retaining loyal users has increased by 21% in September to $2.25 from August’s $1.86, according to Fiksu’s report. This represents a year-over-year increase of 34%. The holiday season is typically the most expensive time of the year for app marketing, with many consumers receiving new devices as gifts and subsequently downloading new applications.
However, the launches of the iPhone 6 and 6 Plus have sent an influx of new users into the App Stores and other app marketing channels ahead of the holidays, driving costs upwards. The adoption rate of the iPhone 6 was 116% higher than that of the iPhone 5 in the first 30 days after launch.
The Impact on Ad Costs
Fiksu’s data also shows a significant increase in ad costs associated with reaching new users and retaining loyal ones. The Cost per Launch Index, which tracks the costs of each repeat app launch over time, increased by 36% month-over-month to $0.29 on iOS. This represents a year-over-year increase of 48%.
The Cost per Install Index, which measures the costs associated with getting an app installed on a user’s device via advertising, increased by 6% to $1.23 in September. This represents a year-over-year increase of 41%. The aggregate volume of downloads per day achieved by the top 200 free iPhone apps in the U.S. increased by 4% from August to 5.5 million.
The Role of iOS 8
Installing iOS 8 required users to free up significant storage space on their devices, leading many users to delete existing applications. This has contributed to a highly competitive app marketing environment, with app makers forced to increase their efforts at finding and retaining new users.
Year-Over-Year Trends
While the current costs associated with retaining loyal users are at an all-time high, Fiksu’s data also shows that year-over-year trends indicate a significant increase in ad costs. The Cost per Launch Index has increased by 48% over the past year, while the Cost per Install Index has increased by 41%.
The Role of Storage Space
Fiksu’s report highlights the impact of iOS 8 on app marketing costs, noting that installing the new operating system required users to free up significant storage space on their devices. This led many users to delete existing applications, contributing to a highly competitive app marketing environment.
App Store Competition
The App Store has become increasingly crowded in recent months, with top apps competing for visibility and downloads. Fiksu’s data shows that the aggregate volume of downloads per day achieved by the top 200 free iPhone apps in the U.S. increased by 4% from August to 5.5 million.
However, this metric is down by 4% year-over-year – a trend that Fiksu attributes to users deleting apps to free up storage space, as well as Apple’s decision to reduce the Top Charts in the App Store from 300 to 150 apps.
Conclusion
The launches of the iPhone 6 and 6 Plus have sent shockwaves through the app marketing industry, driving costs associated with retaining loyal users to an all-time high. The holiday season is shaping up to be a highly competitive period for app marketers, who will need to adapt quickly to changing consumer behavior and preferences.
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About Fiksu
Fiksu is a leading provider of app marketing technology and services, helping brands and publishers reach and engage with their target audiences across mobile devices.