Strategic Planning for Mobile App Marketing Costs

When it comes to mobile app development, there are lots of costs you need to keep in mind. Many of those costs go beyond app development itself. 

If you don’t allocate funds to your marketing strategy, then nobody will know your app exists. That’s obviously a big problem. 

This guide contains everything you need to know about marketing costs for mobile apps. Whether you’re an app developer, white label reseller, launching an app as an extension of your business, or creating a completely new app from scratch, we’ve got you covered.

How Much Does it Cost to Market an App?

This is one of the most common questions our sales team gets when we’re consulting with new clients. But unfortunately, there’s really no single dollar amount that’s an acceptable answer. 

Some app marketers can only afford to spend $1,000 or $5,000 to promote the app. Others spend in the tens of millions. Everyone else tends to fall somewhere in the middle of these two extremes. 

One thing is for certain—spending more money on app marketing isn’t always better. You can’t just pour money into marketing campaigns and expect to see exceptional results. As long as your strategies are effective, you can get away with an affordable marketing strategy for your mobile app. 

At the end of the day, you need to focus on your cost per install, better known as CPI. This key app marketing metric helps you measure exactly how much each installation is costing you. Here’s the formula:

Tracking this KPI forces you to be smart about your marketing costs and helps you identify whether or not specific campaigns are working. 

Why is it So Important to Set an App Marketing Budget?

Setting an appropriate marketing budget is crucial for app marketers. If it’s your first time going through this process, you might be asking yourself why. 

Is this really necessary? What if you’re not working with a lot of capital?

Regardless of your situation, you ALWAYS need to create a marketing budget. 

Setting a budget for your app helps you allocate funds appropriately. Otherwise, you might put too much funding into a particular campaign or strategy, only to find out that it’s not working. But by setting a budget ahead of time and allocating funds for each campaign, you can make adjustments and switch your strategy based on what’s yielding a positive ROI. 

Marketing budgets also keep you on track for managing your goals. How many installations are you expecting per $100 or $1,000 spent on marketing? How many app users are you expecting in the next three months? What about the next year?

Budgets also help with long-term planning, which is why you need to create one ASAP. First, you need to assess the total app cost—including development and maintenance. Then allocate a part of that budget specifically for marketing. 

How long will that budget last you? When will you have more funds ready to invest in app marketing? 

Many experts recommend spending 12-20% of your gross revenue on marketing. As your app becomes more established, you can lower this percentage to 6-12%.

This is obviously a bit more challenging if your app is still in the pre-revenue stages. If you fall into that category, I’d recommend setting a fixed dollar amount aside that’s specifically for your marketing costs. 

Set a budget that’s something you can work with over time. Look ahead to the next 12-18 months at a minimum when you’re doing this.  

General financial responsibility is another important aspect of setting an app marketing budget. In every component of business, spending with no clear plan is a recipe for disaster. So it’s in your best interest to build these healthy financial habits from day one, as they’ll stick with you for the complete mobile app life cycle. 

How to Create a Mobile App Marketing Budget

Before we dive into the specifics of your app budget, let’s quickly go through the steps required to create your budget from scratch. 

Step #1 — Assess Your Marketing Funnel

The first thing you need to do is look at your marketing funnel. This refers to the entire journey a user takes before they finally install your mobile app. If you haven’t officially tracked users going through the marketing funnel before, it’s still important to assess the process and see what this journey looks like. 

Here’s a generic marketing funnel:

In terms of app marketing, the awareness phase happens when a potential user first realizes that your app exists. They eventually think about getting an app or similar tool in your category to solve a pain point or address a need—that’s the interest stage.

When they reach the desired stage of the funnel, they’ve started leaning towards a particular option or brand. 

The action stage is when they finally decide to download the app and install it on their mobile devices.

Why is this important for app marketing purposes?

Your marketing funnel will show you a clear picture of the journey people take from awareness to action. You’ll learn which channels are moving people through the funnel and driving the best results. Then you can allocate funds accordingly based on your findings. 

What was the trigger that moved a user from a desire to download? Where are users leaking through the funnel? These are areas that you’d want to prioritize.  

Step #2 — Define Your Goals

Many of us assume that the app install is the goal of every marketing campaign. While this is true in many cases, it’s not the only goal you should be focusing on. 

For example, some mobile apps want to sign up users for monthly or annual subscriptions. Others want the app to be an extension of an ecommerce site and drive purchases of physical goods. 

Both of these scenarios would have very different marketing strategies, and therefore would have different budget priorities. 

When defining your app marketing goals, it’s in your best interest to set SMART goals. 

Frequently Asked Questions

What is the average cost to market a mobile app?

The cost to market a mobile app can vary widely, from as little as $1,000 to millions of dollars, depending on the scale and strategy. Platforms like Buildfire make it easier to manage costs effectively by providing tools to track key metrics like CPI.

How can I reduce my mobile app marketing costs?

To reduce marketing costs, focus on optimizing your CPI and leveraging organic growth strategies. Buildfire, for instance, offers insights and tools to help streamline your marketing efforts efficiently.

What percentage of revenue should be allocated to app marketing?

Experts recommend allocating 12-20% of gross revenue to marketing, which can be adjusted as the app matures. Tools like Buildfire allow businesses to track and adjust their marketing spend effectively.

How do I measure the success of my app marketing campaigns?

Success can be measured using metrics like CPI, user acquisition rates, and ROI. Tracking these metrics helps in refining strategies for better results.

What are the key components of a mobile app marketing budget?

A comprehensive marketing budget should include costs for advertising, user acquisition, content creation, and analytics tools to track performance.