Business and Marketing

App installs drop off precipitously in February, but that doesn't stop marketers from paying dearly to obtain them.

Mobile marketers who still set promotional budgets on a monthly or annual basis need to reassess their spending strategies, according to an analysis performed by a mobile agency.

Fetch, a Dentsu Aegis unit that provides both creative and media services, analyzed more than 12 billion data points worldwide over the last year to determine the effective cost per install (eCPI) of apps. It learned that the metric varied widely from month to month, costing marketers small fortunes in wasted media.

Consider the “February Effect.” Fetch found that eCPI hit extreme heights in that month compared to relatively low costs per acquisition in January. That's because, in January, people are still getting to know the new phones they received as Christmas presents and are downloading apps with wild abandon. In February comes a download lull, yet marketers continue to promote at nearly the same levels as in January.

“They're still spending the money, but the installs are not coming through because most people already downloaded them the previous month,” says Fetch Head of Data Dan Wilson. “Demand for inventory is still high, so media prices remain high and marketers lose efficiency.”

Fetch's weekly eCPI analysis detected a huge spike in the third week of February. In fact, mid-month tends to be the most expensive period year-round. Insertion orders placed at the beginning of the month usually take effect mid-month, leading to a depletion of inventory and an inflation of prices.

The fact that this was the first time Fetch observed a February Effect gives even greater caution to marketers finding their way on mobile. The channel, though ubiquitous, is still evolving as a marketing medium. “User behavior is never constant,” Wilson says. “This sort of audience behavior is still very changeable and it's really important to keep on top of how that behavior is changing.”

Breaking eCPI down on a weekly basis, Fetch found weekends to be the most costly, likely due to high advertising volumes dampening results. Costs for incentivized install offers hit their nadir on Wednesdays, rose on Thursdays and Fridays, and found their high watermark on Saturdays. Non-incentivized installs, interestingly, saw high eCPIs on Thursdays and low ones on Saturdays.

As user behavior changes on a near daily basis, so must marketer behavior change, preaches Wilson. “In a perfect world, you'd have fluid budgets with no upper or lower limits, like investing in the stock market,” he says.

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