Costs For Marketing Mobile Apps Spiked Last Month Even As Downloads Temporarily Dropped


As app developers geared up for the super-competitive Christmas season, marketing costs rose by 30 percent in November from the month before, according to Fiksu, a Boston-based company that helps publishers find the most efficient marketing channels.

The company said that the cost of getting a “loyal” user, or one that opens an app more than three times, rose to $1.38 from $1.06 in October. That reversed a four-month trend that saw marketing costs decline going into October’s launch of the iPhone 5.

Fiksu said the average number of downloads for the top 200 free iPhone apps in the U.S. declined to 4.57 million per day in November, down from 5.4 million in October. This is a temporary decline following the annual bump that comes with the launch of a new iPhone. When consumers get new phones around the annual iPhone launch or Christmas, downloads spike temporarily as people try out new apps or download old favorites.

“We can expect costs and download volumes to climb through December, much like last year, as marketers spend heavily in preparation for the flood of new devices and rush of user activity and app discovery around Christmas,” said Fiksu’s CEO Micah Adler in a statement.

Indeed, mobile analytics startup Flurry reported yesterday that app downloads spiked at 328 million on Christmas Day, a record high for a single day since Flurry started measuring app downloads. Downloads per hour peaked early at around 11 a.m. on the 25th, and remained high throughout the day until around 8:30 or 9 p.m. While Christmas represents a single-day peak, Flurry is projecting that app downloads will remain high throughout the next week and into New Year’s Day, ending the holiday period with over 1.5 billion downloads, and possibly reaching as high as 2 billion total.

Meanwhile, Fiksu is backed by Charles River Ventures. They’ve accumulated more than 63 billion app actions, including launches, registrations and in-app purchases, as well as real-time bidding requests in helping developers find the most optimized ways of getting new users.