Fiksu Q&A: Cost For Loyal App Users Continues To Rise

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fiksu-adler-usethisGiven that the phrase "there's an app for that" seems to be true more often than not, drawing attention to a new mobile app is harder than ever. This is good news for Fiksu, a mobile marketing company that helps developers promote their apps.

The company recently pushed out the latest version of its Fiksu Index, which found the cost of acquiring a loyal app user rose 5% to $1.36 in March.

AdExchanger talked with Fiksu CEO Micah Adler.

AdExchanger: What is the Fiksu Index, and what jumped out at you from the last report?

MICAH ADLER: The Fiksu Index has been around for about two years, and we measure two things: the cost to acquire users for mobile apps – which we call the Fiksu Cost Per Loyal User Index – and the Fiksu App Store Competitive Index [a measurement of the average aggregate daily download volume of the top 200 free US iPhone apps].

In March, the cost per loyal user [someone who opens an app three or more times in a month] increased by 5% (or seven cents) to $1.36, from February’s $1.29. The Competitive Index dipped 4% to 5.02 million daily downloads in March, down from February’s 5.20 million, but overall the market has been steady over the past few months. We’re working on April and we’ll probably see a lot of interesting things, specifically around the UDID, since the UDID is no longer an acceptable form of user attribution.

What is your take on the IDC report that suggested ad networks are losing clout to publishers like Facebook and Twitter, and that Google still holds the top spot among mobile ad networks?

MA: We’re seeing a lot of rapid change in the space. Google is definitely going after the mobile space very aggressively, but it’s important not to underestimate Facebook. Such a large fraction of their [Facebook’s] inventory is on mobile. They’re doing a great job of making that accessible to mobile advertisers and, more specifically, advertisers looking to drive app installs. I do think we’ll see changes there. Other social networks are taking a close look at this space as well.

Facebook and Twitter…have a tremendous amount of inventory and data. They’re very well-positioned to help advertisers promote their apps at significant volume and produce great results for the advertiser. It’s one of those scenarios where the pie is getting bigger. That’s very interesting for this space.

What other trends are you seeing?

We’re seeing true brand marketing budgets being placed in mobile and the mobile app space, so that’s exciting.

Then there’s real-time bidding. We’re seeing a huge increase in existing publishers getting more inventory. We’re also seeing new [publishers] putting their inventory onto real-time bidding exchanges. For a technology company like us that values optimization and transparency, this is a huge opportunity for us.

There is also a pretty broad industry acknowledgement that native apps are the most interesting piece of the mobile economy. There was a running debate on whether it was going to be native apps or HTML5 or the mobile web — what was going to drive value in this space. What we’re seeing is these large publishers and networks are focusing more of their inventory around mobile apps. There’s a reason for that. That’s what the advertisers want. This is what consumers want. Consumers like to interact with apps through their phones, through a good native user experience, as opposed to other options that may be easier to develop for but don’t lead to the same user experience as a native app.

HTML5 is not going away, but I think there’s a broad industry understanding that if you want a true, good user experience, native is the way to go.

Where do you stand today in terms of employees and funding?

We have more than doubled our employee headcount. Today we have over 150 employees, and we’ve added other locations. We now have an office in Northampton, Mass.; London, Singapore, San Francisco, and Seoul. We’ve also raised $10 million and brought in Qualcomm as a new investor.

The most interesting stuff has been around the functionality of our platform. A year ago we were doing interesting things in the RTB space, and it’s become a core piece of our platform. We’re now integrated with all the exchanges in the mobile space. We’re excited about what we’re seeing there, with more of the inventory moving to these RTB scenarios. The last time we spoke with AdExchanger, we had about 100 different clients; today that’s up to nearly 500 clients. Also, we’ve recently passed our one billionth download. We helped our clients drive over a billion downloads of mobile apps. We don’t have any foreseeable plans to raise money at this point.

What goals do you have for the coming year?

We’re looking to continue our growth. I think we’ll be taking over more of the advertising dollars in the space. We’re seeing more of the big grand dollars paying attention to the mobile space. We’re not at a point yet where our European and Asian presences are as big as our North American presence, so we’re focusing on our international growth.

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