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Fiksu: iPhone 5 effect was short-lived

Research suggests iOS app marketing will get more expensive
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Developers whose marketing costs were reduced thanks to the frenzy of interest amid the iPhone 5 launch should be warned: The honeymoon is over, according to a new report from mobile marketing platform provider Fiksu.

When Apple (NASDAQ:AAPL) launched its latest handset in September there was a subsequent surge in the volume of organic searches for new apps that were iPhone 5 compatible, said Fiksu. The company uses an algorithm to measure how much it costs, on average, to acquire a "loyal" user who will open an app three times or more.

However, according to data it collected in November, the iPhone 5 effect was short-lived. The cost per loyal user soon rose from $1.06 to $1.38, a 30 percent jump. You can't really blame Apple for the problem, however, the report said.

App Store Competitive Index (November 2012)

App Store Competitive Index November 2012

"Unlike last year, when incentivized networks were still part of the mobile app marketing mix, marketers faced the reality of needing to pay more to get more during the competitive 2012 pre-holiday season," said Fiksu. "In addition, many app marketers target the holiday season to launch or update their apps--and to offset a decline in organic searches in November, marketers had to increase their spending to get in front of highly engaged, loyal users."

Fiksu's data was released shortly before Christmas, and the firm predicted that app marketing costs would continue to climb as developers fought for the attention of consumers who found a smartphone in their stocking. One of its other measurement tools, which looks at app store activity, said daily downloads fell 15.4 percent nearly in parallel with the decline in organic searches for apps.

Cost per Loyal User Index (November 2012)

Cost per Loyal User Index November 2012

Though a 30 percent jump seems high, the investment may be worth it. Last week FierceDeveloper reported research from Flurry that said nearly 330 million apps were downloaded on iOS and Android devices on Christmas Day.

What may be useful is that Fiksu noticed an almost predictable pattern in the data it calculates. The report said there was a nearly equal surge in organic searches in 2011 after the iPhone 4S launch, followed by rising costs towards the holidays. Given that Apple's release schedules are becoming more consistent, and the holiday season is fixed, developers can become more prepared to allocate their marketing spend over the balance of 2013.

For more:
- read the full Fiksu report

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