Cost per install (CPI) is a common pricing model used in mobile app marketing and specifically in mobile user acquisition campaigns.
With the number of mobile users forecast to reach 7.33 billion in 2023, and that number expected to reach 7.49 billion in 2025, the opportunity for app developers to reach new audiences has never been better. And CPI can be an effective tool in their marketing kit.
Given the importance that mobile devices and mobile apps have, mobile user acquisition campaigns have an important role to play for publishers and advertisers alike.
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What Is Cost Per Install (CPI)?
Cost per install (CPI) represents the amount an advertiser pays a publisher each time someone clicks on a paid ad for the advertiser's mobile app and then installs it.
Ad networks are responsible for placing the ad on sites where it will have the most engagement.
How to Calculate Cost Per Install (CPI)?
Cost per install (CPI) is calculated by dividing the total ad spend over a specific time period by the number of new installs in that same period. This helps understand how much is actually being paid, on average, for app installs.
A formula to describe this is:
CPI = Total ad spend/Total app installs
In this equation, the "total ad spend" signifies the budget spent during a campaign. "Total app installs", meanwhile, represents how many times the advertised mobile app was installed during the campaign.
A Brief CPI Example
To better illustrate how cost per install (CPI) is calculated, let’s look at an example. If you spent $500 on an ad campaign and acquired 200 new installs, your CPI would be:
500/200 = $2.5
What Is a Good Cost Per Install (CPI)?
A good cost per install (CPI) will vary across industries, type of app, type of campaign, and other factors.
With CPI, the advertiser only pays the publisher once the app is installed, meaning that this pricing model is focused on conversions, rather than views or impressions.
Given the high value that an app install has, especially comparing it with a simple ad impression, costs per install are significantly higher.
Average CPI Across Regions
CPIs vary greatly across regions, owing to varying levels of economic development. Some research suggests average regional CPI is:
- North America: $5.28
- Europe, the Middle East and Africa: $1.03
- Asia-Pacific: $0.93
- Latin America: $0.34
Average CPI Across Devices
At the same time, CPI varies across devices, given that Android apps and IOS apps reach different audiences.
The same research from above estimates an average CPI for iOS Games of $4.3 and an $1.15 for Android Games.
When Should You Use Cost Per Install (CPI)?
As previously discussed, cost per install (CPI) is an important pricing model for app marketing.
We’ve already mentioned that there are other popular models out there — and that can each be used for different purposes — so let's look at how these popular models stack up to each other.
CPI vs. CPM
Cost per mille (CPM) is the price an advertiser pays for every 1,000 impressions their ad receives.
The price for CPM is lower than that for CPI because this pricing model is focused on securing views, not engagement such as user installs. CPM is, however, a great tool to raise brand awareness, as it has the potential to reach a lot of people at a relatively low cost.
CPM does not offer the guarantee that the user will take any action. If app installs are the goal, CPI is often preferred over CPM.
CPI vs. CPA
Cost per action (CPA) is a pricing model where the advertiser pays the publisher when the user carries out a certain action. This could be installing the app, submitting a form or making a purchase.
Unlike CPI, CPA can include actions that occur after installation. That’s why CPA is sometimes preferred by marketers who want users to perform actions that are further down the funnel. CPA can be tied to certain actions that indicate even more engagement and value than installing the app alone can.
Why Is Cost Per Install (CPI) an Important Marketing Metric?
Cost per install (CPI) is very popular because it reflects user interest. Simply put, it takes some engagement to install an app. While installing an app doesn’t guarantee app interactions, it does indicate interest.
CPI can be used by app marketers to measure a campaign's effectiveness because it ensures that the campaign budget was spent on a higher value audience.
Cost Per Install (CPI) Advantages for Publishers
From a marketing perspective, cost per install (CPI)-based campaigns focus on maximizing the number of application installs for the lowest cost.
Since an app install signals a higher level of engagement, CPI campaigns will remain popular among advertisers, even though the ad spend is usually higher than other pricing models.
Here are some of the advantages of CPI that publishers should be aware of:
1. Higher Ad Unit Value
For advertisers, one of the major benefits of CPI is that the users will engage with the app over time. This means that the value of each install is high. This is of course something most marketers will want to invest in.
Since cost per install (CPI) offers conversions and reflects high user intent, it involves a high cost. Greater ad space costs can translate to better revenue.
2. Advertiser Relationships
Creating an effective CPI campaign involves a lot of investment on the advertiser's part. A marketing team will need to invest time and creative resources to build an effective CPI campaign.
This leads to the creation of a bond between the advertiser and the publisher for a much longer time. This can become a mutually beneficial relationship over the long term.
Cost Per Install (CPI) Disadvantages for Publishers
While there are advantages to embracing the cost per install (CPI) model, there are also a couple of disadvantages:
1. It's Difficult to Predict Revenue
As CPI campaigns are very targeted and focused on conversions, it’s very difficult to predict revenue in the long term.
2. It Takes Some Effort
While getting conversions and installs is often the ultimate goal of an advertising campaign, that doesn't mean it’s easy to achieve.
On the one hand, it takes some marketing effort to create a successful campaign. On the other hand, the publisher might need to help support campaign efficiency.
What Affects Cost Per Install (CPI)?
Here are some of the factors that affect CPI.
- App category and user intent: The category of the app and the level of user intent play a crucial role. For example, gaming genres generally have higher CPI owing to the competitive nature of the category.
- Target CPI: Marketers can set a target CPI based on their budget and expected ROI. Higher target CPIs often lead to increased ad spend, resulting in higher CPI.
- Ad unit and engagement metrics: The type of ad unit used and the engagement metrics it generates impact CPI. Ads that lead to better user interaction and higher conversion rates tend to have lower CPI.
- App's ranking and install campaign: The ranking of an app in app stores can also be a factor. For example, higher-ranked apps often enjoy more organic installs, reducing the reliance on paid campaigns and lowering CPI.
- Location: The target audience’s geographic location can influence CPI, with some regions having higher advertising costs.
How to Choose the Right CPI Ad Network?
Ad networks work in different ways and interact with different kinds of advertisers and publishers. Choosing a relevant cost power install (CPI) ad network will help publishers make the most out of their advertising efforts.
A good CPI network should:
1. Provide High-Quality Traffic
This may sound relevant for advertisers only, but it’s also relevant for publishers. An ad network that is focused on matching the right ad space with appropriate ads will bring better results for both parties.
It all comes down to relevancy. Relevant ads in relevant ad spaces simply work better. That's why choosing a CPI network focused on delivering high-quality traffic to their audience is relevant for publishers as well.
2. Monitor for Fraud
This means that there is a lot of money to be lost to fraud. A publisher should team up with ad networks that are aware of the threat and are already working to minimize it.
1. Provide High-Quality Traffic
This may only sound relevant for advertisers, but it's also important to publishers. An ad network that is focused on matching the right ad space with appropriate ads will bring better results for both parties.
It all comes down to relevancy. Relevant ads in relevant ad spaces simply work better. That's why choosing a CPI network focused on delivering high-quality traffic to their audience is also relevant for publishers.
2. Monitor for Fraud
Publishers should team up with ad networks that are aware of the threat and are already working to minimize it.
Best CPI Ad Networks for Publishers
Cost per install (CPI) ad networks play a crucial role in app monetization for publishers. By partnering with the right network, publishers can optimize their spending on ads and generate higher revenues through app installs.
Adsterra is a leading advertising network that offers CPI campaigns for mobile apps. The network has systems in place to check for fraudulent or unwanted traffic. The network has a user-friendly dashboard that allows publishers to track various performance metrics. Adsterra supports both iOS and Android apps, making it suitable for a wide range of app marketers.
NativeX, known for its native ad formats that seamlessly blend with the app's interface, also offers CPI campaigns. The network provides detailed reporting and analytics, allowing publishers to track their performance and optimize their app monetization strategies.
TapJoy is a popular platform that focuses on providing incentivized installs for mobile apps. It offers a unique pricing model where users are rewarded for completing specific actions, such as downloading and installing an app. This incentivization strategy drives higher user interaction and encourages app installs. The network supports both Android and iOS apps and provides tracking and reporting tools to help publishers measure their app's performance and calculate CPI.
PropellerAds is another well-established multi-model ad network that also offers CPI campaigns. It helps publishers to monetize their apps through CPI campaigns, providing PropellerAds provides a range of ad formats suitable for apps, including interstitial, native and push notifications.
MobVista is a comprehensive network that provides CPI campaigns for Android and iOS apps. MobVista has worked with 500 developers worldwide to grow their ad revenue.
The above list should be treated as a starting point for publishers to begin their research into which ad network and pricing model that aligns with their goals and objectives.
Cost per install (CPI) is an important metric for mobile app marketing success, representing a reliable pricing model that manages to measure user intent and engagement.
As such, CPI is a model that should be considered and embraced by publishers as well.
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