App downloads soared in December, but so did marketing costs

App downloads set a new record for the third consecutive month in December, but the cost of acquiring loyal users also rose 20 percent from a year ago, according to data collected by mobile marketing tech firm Fiksu. The results show that users are increasing their appetite for free iOS apps.
Brand marketers are driving up the costs of acquiring those individuals by spending heavily during the holiday season. But while spending on overall apps was up, the cost of advertising mobile games actually dropped. Fiksu said that its app store competitive index, which tracks the average aggregate daily download volume of the top 200 free iOS apps, rose to 9.2 million in December, growing 14 percent from November and up 44 percent since last year. It was the third month in a row for a new high.
That’s good news for app makers and marketers. The Fiksu cost per loyal user Index (CPLU, which measures the cost of acquiring a user who opens an app three times) increased 33 percent from November to $2.10 in December, however. That was a 20 percent increase in costs year-over-year.
December was a hot month for app marketing in part because of the launch of the iPhone 6 and iPhone 6 Plus by Apple. Advertiser demand outweighed the uptick in ad inventory, and that drove up prices, Fiksu said.