Fiksu: user acquisition costs continue to rise as iOS downloads fall

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By Kathleen De Vere Comment

User acquisition costs on iOS continued to rise in July, even though download volume on the platform dipped to the lowest levels seen since April, reports Fiksu.

According to the Boston-based user acquisition company’s latest figures, the cost to acquire a loyal user — defined as someone will will open an app at least three times — rose by seven percent month-over-month in July to $1.54. By comparison, the cost to acquire a loyal user was $1.20 in July 2011, up 28.3 percent year-over-year.

Fiksu attributed the rising costs to what it called an “industry-wide macro trend” of major brands initiating mobile marketing strategies. It’s also important to note that Japanese mobile-social gaming giants GREE and DeNA have been advertising aggressively in the mobile gaming space. We’ve heard from several sources both companies are willing to pay more than average market rates for installs — note that DeNA reported spending $68.6 million on marketing and promotions in its Q1 earnings report, and GREE announced it was willing to pay up to $3.50 per install through its Chartboost advertising Kiosk program.

While user acquisition costs in July rose for the third month in a row, total download volume fell by 5.6 percent month-over-month. According to Fiksu, the top 200 free iPhone apps in the U.S. generated an average 4.37 million downloads a day in July, down from June’s figure of 4.63 million daily downloads.

Fiksu did not attribute the drop in download volume to any specific cause however, as volumes experienced a similar downturn over the summer months of 2011 as well. While total download volumes are down month-over-month, they are still up 2.8 percent year-over-year from July 2011’s average of 4.25 million downloads a day.

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