HOW MUCH DOES AN APP INSTALLATION COST AROUND THE WORLD?

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1 HOW MUCH DOES AN APP INSTALLATION COST AROUND THE WORLD? FEBRUARY 2015

2 A PUBLICATION OF WITH THE SUPPORT OF

3 EXECUTIVE SUMMARY 3 CPI REPORT 4 HIGHLIGHTS OF REPORT 6 WHAT IS GEENAPP 9 APPENDIX TO THE CPI WARS 10 APPENDIX. AVERAGE CPI BY COUNTRY 12

4 EXECUTIVE SUMMARY According to the US Mobile Apps report, apps now account for 52 percent of the time that we spend with digital media. While it is an exciting time to be a mobile developer, creating a successful app continues to be a huge challenge. Apps as a result have become a fierce battlefield when it comes to advertising. While there are winners, there are even more losers in this war, thousands of apps that never make any significant money lie on the battlefield. It is now more costly than ever before for developers to acquire new high-quality users for their apps. To arm brave new developers Geenapp in collaboration with Mobile World Capital Barcelona and Wayra have released the Global CPI Wars report to provide better insight into app advertising revenue around the world. The Global CPI Wars report provides the latest information about price trends in app advertising from around the world, the bi-monthly report will be distributed every other month to indicate the state of the CPI market. To generate the report over 300,000 campaigns from 300 app advertising networks were analyzed over a period of two months. The top performing apps per category, price and country were complied and studied. Key findings: The average worldwide CPI for applications in devices is 1.67 USD, and for devices 0.98 USD Europe and North America are the regions with the greatest CPI Travel and health apps have the highest average worldwide CPI 3

5 CPI REPORT WHAT IS CPI AND WHY ARE THERE CPI WARS? Cost Per Installation (CPI) is the unit used to measure the price of installing an application on a mobile device. In the app world, competition is so intense developers are willing to pay for their app to be installed to win. In order to monetize apps developers must rely on in-app purchases, advertising or other approaches to generate revenue. But prior to this they must first invest time and money into getting apps in front of their target market. To do this they first determine the price they are willing to pay for each installation based on the revenue they can generate from each customer download over the life of the app, this is known as the Lifetime Value (LTV). Using this value they determine the CPI they are willing to pay to advertise an app. In a cost-per-install campaign, publishers place digital ads across a range of media in an effort to drive installations. The developer is charged a fixed or bid rate only when the application is installed. In the app market, CPI is the most common system used to bring together advertisers and publishers to determine the bid price that should be paid for each install, with every installation there is an associated cost and an amount earned. Developers compete to offer the best CPI for their Apps CPI wars are taking place every second between developers, ad networks and publishers; developers are looking to minimize the price they pay, intermediary ad networks, agencies and publishers looking to gain maximum value or commission for every installation. Battles also take place within the apps to be listed in the top rankings and between ad networks to list the best apps. The result is that for the same app, in the same device and in the same country there may be up to 35 different prices. 4

6 WHY WOULD SOMEONE PAY TO OFFER AN INSTALLATION? Currently there exist several ways to monetize apps: charging per download, in-app purchases, advertising or through a freemium model, where the app is offered for free but certain features of the app involve payment. The apps that have been most successful belong to the last category. Yet even the best app and monetization strategy will make no money without users. So developers must battle out for attention over 3 million other apps on the three main operating systems (IOS, and Windows Phone), thus one of the biggest challenges developers face is standing out within a sea of offers. Because developers understand the need for new users more and more look to paid placements through ad networks and cross-promotion strategies to increase downloads. Who do they pay? They pay publishers that generate high traffic through mobile devices and tablets. This can include ads that appear on websites, major social networks, or on other apps, they also pay agencies in charge of advertising space. Apps that are promoted through CPI tend to be free. 5

7 REPORT HIGHLIGHTS Here is the average CPI of non-incentivized downloads by region for and operating systems. HOW IS CPI DISTRIBUTED IN DIFFERENT REGIONS OF THE WORLD? Region Difference Europe 2.31 USD 1.41 USD 60.6% Asia Pacific 1.62 USD 1.09 USD 67.0% Latin America 1.26 USD 0.77 USD 61.1% USA & Canada 2.41 USD 1.81 USD 75.0% Africa 0.96 USD 0.63 USD 65.0% HOW IS CPI DISTRIBUTED IN DIFFERENT APPS CATEGORIES? Games Travel Health Productivity Dating 1.14 USD 1.36 USD 1.37 USD 0.44 USD 1.16 USD Average cost for and 6

8 HOW IS CPI DISTRIBUTED IN DIFFERENT COUNTRIES? < > 1.4 USD USD USD USD USD HOW IS CPI DISTRIBUTED IN THE TOP SIX COUNTRIES? Country Australia 2.32 USD 1.72 USD Brazil 1.42 USD 0.64 USD Germany 2.53 USD 1.73 USD Japan 2.63 USD 1.67 USD Spain 1.77 USD 0.81 USD USA 2.23 USD 1.68 USD 7

9 Australia 2.32 USD 1.72 USD Games Travel Health Productivity Dating 1.98 USD 1.17 USD 0.46 USD 0.63 USD 1.34 USD 1.42 USD 0.64 USD Brazil Games Travel Health Productivity Dating 0.98 USD 2.35 USD USD 0.65 USD 2.53 USD 1.73 USD Germany Games Travel Health Productivity Dating 2.04 USD 1.78 USD 0.55 USD 0.25 USD 1.28 USD 2.63 USD 1.67 USD Japan Games Travel Health Productivity Dating 1.78 USD 3.42 USD 1.95 USD 0.25 USD 1.90 USD 1.77 USD 0.81 USD Spain Games Travel Health Productivity Dating 1.41 USD 1.87 USD 0.55 USD 0.24 USD 1.40 USD 2.23 USD 1.68 USD USA Games Travel Health Productivity Dating 1.72 USD 2.00 USD 1.24 USD 0.67 USD 1.70 USD 8

10 WHAT IS GEENAPP Geenapp is a mobile data science programmatic advertising platform. Geenapp both increases downloads via targeted recommendations and monetizes content publishers mobile traffic. Connected to 90% of the world supply of apps, Geenapp s intelligent platform monitors, qualifies and categorizes hundreds of thousands of active offers across advertising networks. It then cleans and extracts data to provide a win-win scenario for developers and publishers. Using real-time algorithms and highly efficient data processing Geenapp matches the best available advertising offer to publishers at the best price. Developers have better visibility into the market CPI value in each category and country. While publishers can choose the best price and use a simple API link to promote their selected apps through social media or other channels and get paid for every install. 9

11 APPENDIX TO THE CPI WARS WHY IS THIS REPORT USEFUL? This report offers insight into the global CPI trends and gives developers, ad networks and publishers better transparency into market CPI prices. Industry players will benefit from a better understanding of the cost of acquisition to reach the desired volume of installations, better insight into current market trends and more transparent pricing. TOP SIX APP MARKETS AND WHY? US 176 million smartphones and market leader in and CPI revenues, representing over 40% of the total spend per device. Japan Second place for CPI purchases in and top 5 in, leader in Asia Pacific region in terms of downloads and represents 10% of the total global revenue in apps. Germany While not the CPI leader in Europe (slightly behind Austria, Switzerland, Sweden and Norway), the size of the economy makes it an important market for developers. Brazil Represents the fastest growing market in apps, with over 112 million mobile users, this is the largest market in Latin America after Mexico. Despite volume, the per app spend of users is relatively low, which explains why CPI in developing countries is also usually lower. Australia Similar to US behavior, app developers can look to Australia to 10

12 understand market reaction to an app before launching in the larger US market. Canada is another test market for developers before launching in the US. Spain European leader in smartphone penetration. With an 81% penetration rate, it acts as a midpoint between the CPI of the best countries and the economies that are still in the process of developing. Australia and Canada are popular test markets to launch CPI campaign campaigns due to similarities with US market HOW IS THE CPI WARS REPORT GENERATED? We take a sample of 300,000 campaigns from over 300 ad networks and select the most competitive price per application and country for each of the campaigns analyzed. 11

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