A few studies have recently been released looking at the mobile app user market, not from a time spent basis (see here for the latest), but from an acquisition and spend standpoint. In this article, we highlight 4 data points from these studies along with some other key findings.
1. It Costs $71 to Acquire an iOS App User Who Makes A Purchase
According to Liftoff’s 2017 Mobile App Engagement Index [download page], the acquisition cost for an iOS app user who makes a first purchase using the app is $71.02, compared to $58.90 for an Android app user who makes a first purchase using an app.
Meanwhile, it costs $85.23 on average to acquire an iOS app user who makes an in-app purchase in a mobile game, compared to $67.57 for an Android user who does so.
Overall, the cost-per-install across regions and operating systems is $4.12 – but of course that figure rises when it comes to acquiring users who complete certain actions, such as registering an account ($8.21) or making a purchase.
These figures differ by region: while the average cost-per-install is highest in North America, the cost to acquire a user who completes a purchase is lower there.
2. iPhone Users in the US Will Spend An Average of $63 on Apps This Year
It’s certainly not an apples-to-apples comparison, but it seems expensive to acquire a user relative to how much they’ll spend – at least in any given year.
Within the US, Sensor Tower Intelligence predicts that US iPhone users will spend an average of $63 this year on premium apps and in-app purchases, up 34% from last year’s $47. Fast forward to 2019, and spending per active device will climb to $88, a 40% increase from this year’s predicted total.
These are per-device estimates – and theoretically a substantial share won’t be spending on in-app purchases. As such, those who do spend will likely fork out higher amounts on premium apps and in-app purchases, making their acquisition cost appear more affordable. There’s also the question of lifetime value…
(Sensor Tower’s data are gross amounts before Apple’s 30% platform fee, which is 15% for in-app subscriptions more than 1 year post-purchase, and do not include taxes. The figures also exclude subscription or other in-app revenue from first-party apps and services such as Apple Music.)
Separately, Sensor Tower estimates that the Games category will account for about 70% of per-device spending. That figure should hold relatively steady through the forecast period, with a projected $60 out of the $88 total in 2019 (68%) going to premium games and game in-app purchases.
Entertainment apps are expected to overtake Music as the second-largest spending category this year, driven by apps such as Netflix and HBO NOW.
3. A Feature in the App Store Could Boost Downloads by More Than 2,000%
Want to drive down those user acquisition costs? Get featured in Apple’s App Store.
Apptopia recently studied 30 days of featured apps and games to see what boost they receive from being touted as Apple’s App Store Game and/or App of the Day.
On average, apps featured in the App Store got an impressive 1,747% boost in downloads over the previous day. This was considerably higher for apps featured on a weekday (+2,172%) than for those featured during the weekend (+580%).
The analysis also found that the lift in downloads was far higher for free apps (+2,033%) than for paid ones (+321%), and that Game apps tended to get less of a spike overall (+792%) than other apps. Established apps – not surprisingly – also experienced less of a boost in downloads when featured, presumably as they already had significant download volume.
4. Most App Development Firms Won’t Look At A Project That Costs Less Than $10k to Develop
Finally, a recent study from Clutch surveyed 102 app development firms from around the world to get a sense of how much it costs to create an app.
The results show that the majority of firms have a required minimum project size. Of those, most (57%) have a minimum of $10k, with about one-third having a minimum project size of at least $20k.
There are various costs involved in app development, ranging from discovery (half charging less than $5k) to design (half charging more than $10k), to features such as web portals (almost half charging more than $10k). These costs are broken out in more detail in the survey results, which are accessible here.
For more on mobile apps, see this article: 5 Charts to Inform Your Mobile App Marketing in 2017.