The cost to gain loyal users increased with the number of downloads in July.
The actual cost per loyal user rose by 20 per cent from $1.50 to $1.80, hitting the highest priced month since December 2011, reports Fiksu.
The Fiksu Mobile App Marketing Platform shows that this surge in prices was caused by two main trends.
Firstly the increase in brands using Facebook’s mobile app advertising platform – which has grown ten fold since its launch in 2011 – driving costs and competition, and secondly Apple’s change to the App Store rankings.
The App Store helps push the top-rated apps up the charts, forcing lower to mid-positioning applications to spend more money on regaining their place.
July saw a swell in daily downloads from June’s 5.6 million up to 5.8 million. Although a small rise, year-on-year this is an impressive 33 per cent increase.
Micah Adler, CEO of Fiksu, said: “There’s major sea change everywhere, now that Apple’s ranking algorithm appears to favour highly-rated apps and penalize others. App marketers must now work even harder to generate positive ratings from engaged users, since user acquisition costs for apps without stellar ratings will now be more expensive.”
The market could see further growth as the release date of the new iPhone approaches, and the holiday season draws near.
This creates extra pressure for developers to spend even more to climb further up the rankings – in the hope of gaining those loyal users.