Q3 Mobile User Acquisition Trends to Watch

Q3 sustained a marketing-friendly trend in mobile user acquisition. Based on our latest research, the cost to acquire a new registered user in a mobile app reached a low of $8.72, the lowest it’s been in 2015. But don’t wait too long to act on the trend of lower CPAs, these costs are expected to rise headed into the holiday season as marketers bid up advertising costs vying for a larger share of the Q4 seasonal app rush.

Liftoff also benchmarks average CPAs for other relevant user actions, such as sharing, purchasing, making a reservation, or subscribing to a service. eCommerce marketers have enjoyed a steady decline across 2015 in cost per first purchase, closing Q3 at $62 after starting the year at $81.07. Subscription dating app users are the most expensive to acquire, averaging $193.61 per user for the quarter.

As we’ve seen throughout the year, mobile user acquisition costs often see significant variations based on operating system. The cost to acquire users who will engage in non-transactional events such as registration or sharing are generally less on Android, given the lower cost of ad inventory available on Android. However, users engaging in financial transactions such as reserving a hotel or taxi, or subscribing to a paid service is generally less expensive on Apple devices.

Gender is another dimension where we see major differences in user acquisition costs. Marketers see lower CPAs for female users who registration and share socially, while it it is less expensive to find men that will make reservations and pay for subscription services. Android and iOS users may have similar acquisition costs for a first time purchase, but women are significantly more likely to make a purchase on their phones, driving their cost per first time purchase down 39% lower than their male counterparts.

This provides interesting insights for marketers as we enter the holiday season. The holidays have always been an important time for mobile app publishers to focus on generating new users. Historically, app downloads have increased in the fourth quarter, peaking the week of Christmas. This is presumably the result of the influx of new devices into the market, as well as a flood of digital download gift cards bringing consumers into the app stores. Competition for these users is fierce, causing costs to go up across the board, making the targeting of user acquisition campaigns even more important.

Marketing dollars should be focused on the end goal of the campaign – not simply on the cost per install. Based on the data, a social networking app that relies on sharing features to generate awareness should consider focusing on female Android users for their holiday ad campaign. On the other hand, travel app marketers looking to capture the largest share of holiday vacation traffic ought to target campaigns to male Apple users and their increased purchase power.

While statistics can help guide a marketers planning as they head into an important time of year for their product, the best campaigns will be data driven and optimized on the fly. To do this, marketers must integrate software into their apps that can collect user data and parse that data back out to advertising networks, forcing the networks to optimize not simply for the lowest cost per install, but for the lowest cost for active user.

How does your app stack up?
Download the Q3 2015 Mobile App Engagement Index to find out