Tuesday, October 20, 2015

How much would you pay to get another user of your app?

Once you've built an app it's perfectly understandable that you want as many users for that app as possible. But how do you get them?
I regularly hear developers complain that they are disappointed and frustrated that people aren't just finding their app (and installing it) or they're upset that the store isn't promoting their app.

One of the common approaches to user acquisition is advertising. I find that it's common, particularly amongst those with a development background, to underestimate the cost of advertising and have unrealistic expectations about what they can pay to acquire new users.
"$0.10 per new user is far more than I want to be paying" - A developer
To get a feel for what other companies/developers are willing to pay for a new user, I looked at 50 randomly selected campaigns for both iOS & Android from AdDeals and plotted it in this diagram:
(Yes, it's a box-and-whisker diagram. And, no I haven't made one of these since I was in school.)

It roughly tallies with Cost Per Install (CPI) data from Fiksu from last year.

That's an average of between $1.00 and $1.50 per new install.
Yes these figures are for Android and iOS - there just isn't enough Windows data out there that I could. I expect it to be roughly the same situation there though. Sorry if that's what you want. Or if you know of some I'd love to hear it.

So what?

So, consider how realistic your expected figures for what you'll spend to get new users are.

You may be competing for users against people who are prepared to pay. And those who are prepared to pay more will get more ad space.

The above AdDeals figures are based on "non-incentivized" installs. This means that the apps can't offer benefits to users of an app for installing another.
Why so?
Well, would you want someone to install your app just to get a benefit in another app. If that's why they installed your app do you really think they'd become regular users?
Surely you want people to install your app because they want to use it.

Having the people who install your app actually use it is especially important if you're paying for the user acquisition. After all, if people don't use the app how will you monetise their use and recoup the cost you paid for the acquisition?

Why such a range in the amounts above?
Because different apps will be able to earn more from each user. If a user of an app will typically earn the app's creators $9 in profit it's worth spending more to get that user than an app where users typically only earn the owner $1. It's simple economics.

But what if you can't afford or do want to pay for advertising?
Well then you need to consider other ways of attracting new users. Maybe you could consider cross-promotion. ;)


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