Mobile App Advertising Costs and ASO

January 22nd, 2015

Mobile App Advertising Costs and ASO
David Quinn

by David Quinn

VP of Strategy & Partnerships at Gummicube, Inc.

Chartboost, a leading Mobile Advertising Network, reports Cost Per Install (CPI) has increased from $1.66 to $2.69 over the last 12 months - a rise of 62%. The cost per install is often lower than competing traffic channels, and advertisers often wonder how much they should expect to pay per mobile app install. There are six primary factors that influence an advertiser's CPI.

As mobile app advertising costs rise - demand increases for quality ASO tools and data.

We know download volume and velocity is highly correlated to rankings for top keywords. So publishers with high user LTVs can and do buy their way to the top of the charts.

Blockbuster studios have optimized lifetime value (LTV) for their gameplays, and are happy to compete with each other for relevant downloads.

Consider - 4 publishers account for 70% of app installs.

Top Mobile App Publishers

Now we add brands to the mix - who have started to invest in mobile app advertising in earnest. Moving advertising budget allocations away from TV and Print to Digital, increasingly Mobile. Mobile app advertising spend accounted for 7% of global ad spend in 2014. By 2018, several sources predict 22%.

The competition for mobile app advertising space is increasing and expected to continue to push both mobile app advertising costs, and specifically costs per install, even higher.

This is great for the monetization of ad-supported apps. For these apps - the LTV of a mobile app user increases, because of the increased app advertising revenues. But apps need users while broad mobile app discovery has become “pay-to-play”.

For the 99% of apps that don't monetize installs (aka: User LTV) at $2.50+, app discovery takes on increased significance.

Optimizing your App Name and Keywords fields for a wide variety of relevant phrases is an essential exercise. Getting your description nailed is key.

Most top publishers have apps that don't have an LTV of $2.50+, and for those apps - ASO is an extremely attractive, if not primary, marketing investment.

Does this describe your current mobile app advertising effort for each of your apps?:

  • you are buying downloads as part of a launch hoping for organic traffic due to increased visibility from the "paid download" push, or
  • your user average LTV is greater than $2.50

If not - then having access to the best tools and app store data, and allocating time each month or each app update to a formal ASO process can be your least expensive CPI campaign.

We'll talk more about "ASO CPI" in this blog. But - let’s start here:

Rising CPI costs means a strong understanding of ASO, and access to accurate app store data is critical to a mobile app’s success.

Let's say $1k is allocated to ASO per month, per app. That’s assuming a cost for the tools, data and your time.

To match the performance of paid acquisition - a $1k/month App Store Optimization effort would need to generate only 13 new downloads per day.

Mobile App Publishers need a strong grasp of how ASO works, access to accurate data and tools, and a routine focus on keyword (or target phrase) optimization.

At Gummicube

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