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Marketing spend continues to climb

The cost of app marketing has reached record heights, and is likely to keep climbing. The critical measurement, the Cost Per Loyal User Index (CPLUI), is higher than it has ever been, with companies spending £1.94 for every loyal user. That’s the verdict of Fiksu, a Boston-based firm that analysed app marketing trends over the past four years. Fiksu classified a loyal user as using the app at least three times.

Last summer, downloads from Apple’s App Store were limited, with 6.1 million in June compared to 6.6 million in May, which was largely attributed to Apple’s temporary ban on apps with incentivised advertising, as well as people forgetting about their phones for a few weeks while the World Cup took centre stage. Since then mobile apps have simply exploded in popularity, and the costs have risen too.

The reason is simple; mobile marketing is so cheap compared to other forms of digital marketing that companies across the board are expected to increase their marketing spend in an increasingly competitive marketplace. Traditional forms of marketing like magazine and billboard advertising are vastly more expensive and are paying the price, while mobile marketing is exploding in popularity.

Apple’s App Store Competitive Index revealed that there were 8.1 million free iOS apps downloaded in March, a 15% increase year-on-year. That means mobile apps have never been more popular. It also means that even big names have to put money behind their app in terms of marketing to make sure it gets the attention they crave. Mobile app development, then, is no longer enough.

Companies like Coca-Cola have embraced mobile marketing and the soft drinks brand was actually named Mobile Marketer of the Year in 2014, thanks to the likes of 70,000 Apple Pay-enabled vending machines in the US and QR codes that use augmented reality.

There will be an explosion in marketing spend by major corporations in the years ahead. Together with the leading games companies ploughing some of the billions they make every year back into new titles, that means it will be increasingly difficult to gain a foothold.

The app once was the marketing, but the next generation of apps will need a healthy marketing effort of their own if they are to gain the market penetration they need. The CPLUI will inevitably, then, continue to climb.