With the app market ever-widening and more inventory coming into the picture, brands are spending big on targeting loyal mobile users.
According to mobile marketing company Fiksu, June’s cost per loyal user (CPLU) of $3.21 represents a 30% lift on April, and 44% year on year.
June’s spend goes hand-in-hand with a 24% surge in app downloads over the month compared with May.
The increase in spend becomes even more evident when going back a bit further. June 2013 saw a CPLU of $1.50, this figure rising to $2.23 in the same month over 2014.
What’s driving it?
While app use is soaring, people aren’t spreading their usage across apps, Fiksu states, with Nielsen finding that the average number of titles used per person has stalled in the last two years.
But a 63% increase in time spent on them means that marketers are wrestling for the in-app inventory of a core set of consistently used programs.
Rising demand for mobile video ads is also contributing to a higher CPLU, accounting for a substantial chunk of ad spend this quarter.
Video advertising made up over a quarter of Facebook’s total ad takings in Q2, as CPMs for video on the social network rose 15% in June compared to the month before.
“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”, commented Fiksu CEO, Micah Adler.
Cost per install
Interestingly, the increase in download activity has driven down the cost per install index (CPI), which measures the cost per install attributed to advertising.
While still an increase on last year, CPI on iOS dipped 21% month over month to $1.15, while Android - the more popular operating system - decreased 9% to $2.12 throughout June.
Despite lower CPIs, the challenges of reaching loyal users ‘won out’ this month, says Fiksu.