A recent article by Reuters suggests that the cost per install via the traditional mobile ad network will surpass the actual value of that same user this holiday season. You read that right. Companies will pay more for a mobile user than that user is actually worth. So what gives?Why would anyone be willing to make such an unsound investment?
One word: charts. Much like the music industry relies on the billboards to boost sales during the holidays, mobile apps rely on their top charts to get their app in front of all those new users logging into their device for the first time. Now while this may seem like a shaky deal on paper, it’s a solid investment if you can pull through and get your app above the noise. Being top on the charts means TONS of installs from users you haven’t paid for, evening out the burden of all those installs you’ve overpaid for. The tricky part is hedging your bets properly. If you begin to spend big in acquisition but install costs skyrocket beyond your means, you’re stuck with tons of expensive users, no spot on the charts, and a big red line item on your budget.
Unfortunately, this leaves little to no room for the average developer to acquire users through traditional ad networks. Luckily, services like our very own K-Invite will never have price fluctuations like the rest of the market, allowing regular developers to continue to acquire users this holiday.
You can read the Reuters article here