You’ve just hit the submit button to get your app approved in the app store. Over the past few months you’ve racked up countless hours working on your app. You walk outside for the first time in days; the sun’s warm light replaces the dull fluorescent hue you’ve become accustomed to, and cool air fills your lungs, providing a refreshing contrast to the hot, muggy, oxygen you were previously breathing in your room. And then you wait… And wait… And wait some more, sitting there hoping that users download your app.
Whether you’re an indie developer with everything riding on this app, or your a large enterprise where it is just a small facet of your company, you want your app to be successful. In the app world, success means downloads and getting the highest return on investment (ROI) possible.
I Came To The Fork In The Road And Turned…. Straight?
Should you attain downloads through paid or organic channels? The answer is yes. In reality, you should not pick one or the other. You should be using both in a harmonious relationship to attain the downloads you need for a high ROI. Unlike web search engine optimization (SEO), in app store optimization (ASO) paid and organic tactics work together in a virtuous cycle. However, for argument’s sake, we’ll assume you have to pick one or the other.
Show Me The Money!
It’s been 3 months since you’ve left the dark enclave where you developed your app. You’ve had to fix a few minor bugs, but for the most part you’ve been watching your downloads slowly grow. The major hiccups are done, and you’re ready to start seeing your downloads increase.
Now you’re starting to ask yourself some questions. How much will you be spending for your downloads in both organic and paid channels? And how do they compare?
We’ll make two assumptions. The first is that the average cost per install is $1.50 (which is actually slightly lower than the 2013 cost). The second is that your goal is to increase your monthly downloads by 20%, which is the average increase MobileDevHQ customers see.
This chart shows three different scenarios of what an app’s current monthly downloads might be, how many they would need for a 20% increase, and how much they would have to pay to get to that goal.
You could be paying up to $30k/month for the same increase in downloads you could be getting for free through ASO. You also have zero marginal CPI through ASO, meaning you don’t pay any more for each additional download. These numbers clearly show that when it comes to the cost of acquiring users, ASO wins.
I Said, Show Me The Money!
It’s all well and good to be spending virtually nothing on acquiring users, but it doesn’t mean a thing if those users aren’t adding any value (i.e. spending money). Paid channels are getting better at delivering users who download the app and have good post-install engagement. Facebook has become especially valuable in this sense.
The study shows that in the long run, organic users have longer and higher engagement. The two Top Grossing apps in the Apple App store are Candy Crush Saga and Clash of Clans, who both use the ‘freemium’ model, and thrive off the users who are engaged with the app more than just a few times. In fact, there are only four paid apps in the first 50 Top Grossing apps.
Even if you were a paid app and only cared about getting money from the first install, you would have to charge more than the $1.50 you paid for the install to make any money (even more if you take into account the 30% Apple takes for each sale). Only three out of the top 10 paid apps are over $0.99. Those numbers don’t point towards you getting a huge return on your investment.
Capitalizing On Your Blood, Sweat, And Tears
Money is a universal language, and saving it wherever you can is important. Whether you’re an app marketer who saves your company $30K, or you’re an indie developer pocketing an extra $300/month, making organic channels your main source of downloads will improve your ROI. Not only is the cost to acquire a user significantly lower, but you also get a more loyal, long term user.
Think about where you want to be allocating your precious resources to acquire downloads. Are we saying you should only focus on organic channels and not spend anything on paid installs? No, in fact we encourage you to use paid sources to boost your organic downloads. However, it’s clear that the smarter, long-term investment is in organic channels, and ASO is your key.
If you’re interested in increasing your organic installs and improving your return on investment, sign up for a free account today.
Becky is the Senior Content Marketing Manager at TUNE. Before TUNE, she led a variety of marketing and communications projects at San Francisco startups. Becky received her bachelor's degree in English from Wake Forest University. After living nearly a decade in San Francisco and Seattle, she has returned to her home of Charleston, SC, where you can find her enjoying the sun and salt water with her family.