Acquiring a new customer for a mobile application is not cheap and in the month of October that cost rose by nearly 30 percent. According to a study by Boston-based firm Fisku, the cost of obtaining a new “loyal” customer rose from $1.06 to $1.38.
As the ultra competitive holiday shopping season began a larger number of mobile company’s began heavily advertising their mobile products, which in turn raised the cost of advertising. However, the top 200 free iPhone apps actually saw a decline in downloads, averaging 4.57 million per day by November.
In comparison, October had witnessed an average mobile app download rate of 5.4 million apps.
The trend towards higher pricing followed four months of declining advertising costs for mobile app customer acquisition.
Mobile app download declines are a typical trend that often occur as customers wait for the next iPhone to release and it is likely that December will have witnessed an increase in mobile app download. App downloads are also often helped along as smartphone users receive new devices on Christmas Day.
In a statement regarding the current state of app advertising Fiksu CEO Micah Adler notes:
“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.”
The company’s expectations for mobile app downloads may have already become true, according to analytics firm Flurry, 328 million mobile apps were downloaded on Christmas day alone. App downloads through the end of December are expected to end between 1.5 billion to 2 billion.
Using the chart shown above be can compare the monthly rate of downloads for mobile devices to compare advertising costs versus the value of that advertising:
More information to follow after December advertising costs and download rates are released in terms of mobile app marketing costs.