CPI (Cost Per Install) – Why Is It Important?
In a world of a digital marketing, metrics play an important part in tracking cost-effectiveness in add campaigns. The topic of this article is cost per install (CPI) and how it’s used to calculate profitability regarding user acquisition.
To start we’ll explain how CPI is calculated and some related metrics as well.
Cost Per Install (CPI)
Cost per install is calculated as a ratio of money spent on the ad campaign to the number of installs directly tied to that campaign. An important thing to mention here is that it can only be calculated after a campaign is finished. The best you can get before the start of a campaign is an estimation of possible cost.
Cost Per Mile (CPM)
Cost per mile (1000 impressions) is a metric best used for brand awareness and engagement. The main difference between CPM and CPI is that for CPM campaigns you pay the full price, regardless of its performance. From CPM campaigns there is a chance that you don’t get a single install but only non-effective impressions.
Cost Per Click (CPC)
CPC or “Cost per click” is best used for driving conversions for website visits. For example, when a user is playing your game, your retargeting ad will appear from time to time and drive traffic to a different game.
Pay Per Click (PPC)
Pay per click isn’t actually a metric as more as it’s a business model. It’s how media platforms and advertisers arrange prices for shown ads. Take note that it’s not the same as CPC because PPC ad campaign is just type of a business model and the CPC is an actual price you pay set by a bidding process.
Taking into account the organic traffic
As mentioned earlier CPI is based on installs generated by ad campaigns, but this isn’t the only way apps generate users. Users are also acquired organically through the app store or some other landing page. The organic downloads are closely connected with the paid ones more than expected.
For example, let’s say you invested in an ad campaign and generated 100k downloads for your game via ads. In addition, you’ll probably get half of that number organically (the percentage varies and depends on the type of the game etc.)
On the contrary, if you didn’t run your ad campaign most of these organic downloads wouldn’t happen.
User’s location is a relevant factor to consider with the CPI. The price depends primarily on the lifestyle of the people who live in targeted regions as well as their purchasing power. For instance, the United States, Australia, and Japan have bigger CPI’s.
Category of Games/Apps also plays a role in determining CPI. In the United States, the biggest CPI was for Puzzle and Casino games while the lowest was for RPG. This data was sourced by Chartboost in July 2018 for iOS users.
The CPI for each install isn’t the same for iOS and Android apps. Although the number of iOS users is slightly lower than Android, they tend to have higher CPI’s. However, the ones that choose iOS are considered to have deeper pockets meaning they’ll probably spend more via In-App Purchases. So, that’s the reason CPI for iOS can be even two times higher than for Android.
Cost Per Install remains to be one of the most important metrics for mobile app owners to measure, but why are CPI campaigns crucial? Because it’s a metric that can grow your audience, organize your advertising budget and most importantly increase your revenue.