You could have the most engaging, innovative, and revolutionary marketing campaign at your fingertips, but in the end, installs are what matter most to mobile app marketers. That’s why cost per install — CPI — is an essential KPI for mobile marketers to measure. When entire advertising campaigns are based around this metric, we refer to it as CPI marketing. To find out why it’s relevant to you, read on!
What is cost per install (CPI) marketing?
CPI stands for “cost per install,” and should not be confused with the identical acronym for “cost per impression.” While marketing campaigns can exist for both, cost per install has become the dominant approach for the mobile advertising industry.
Marketers calculate CPI by dividing their ad spend by the total number of app installs generated by the associated campaign. This provides you with a baseline cost to acquire a single user.
How do CPI marketing campaigns work?
CPI marketing campaigns use a pricing model built around install efficiency. Under this model, advertisers only pay for users that install the app after seeing an ad promoting it. Since CPI campaigns only charge advertisers for confirmed installs, marketers only pay for real users and can protect their budgets.
While the benefits of CPI marketing are more straightforward than other pricing models, there are many details that determine its effectiveness. Any one of the following variables could have a massive influence on your ROI:
- Install location by country: Individual CPIs vary wildly depending on the country they’re sourced from. The general rule of thumb is that established, wealthy economies like China or the United States demand higher rates while emerging economies like Brazil or India have lower ones.
- Device platform: Android and iOS apps generate contrasting CPIs as well. Many studies have found that that worldwide, Apple users are willing to spend more on IAPs than Google users, which equates to a higher average cost-per-install.
- Advertising network: Each media source will offer a different rate for deploying advertisements. Social media platforms tend to have the highest rates for their visibility, while other networks vary cost by services offered.
- App Category and Genre: The specific category and genre of your app can dramatically influence the overall CPI. For example, mobile games tend to have a higher CPI than other app categories, while certain gaming genres like casino games can demand above-average CPIs as well.
Who should use CPI marketing campaigns?
CPI campaigns can be used by any mobile developer or marketing team that intends to promote and distribute apps across a broad audience in a cost-effective way. These benefits, however, can impact different mobile businesses in different ways:
- Game Developers: CPI data can be represented as regional or demographic averages to determine which market segments are the most cost-effective and valuable for mobile game creators. With this information on hand, developers can strategically target users with the most relevant campaigns.
- App Marketers: CPI campaigns provide a clear cost of customer acquisition that marketers can use when creating growth strategies. Not only do marketers gain the demographic insights described above, but they can also pair CPI metrics with detailed behavioral data. This information enables marketers to optimize conversions for market segments who engage with ads to install new apps.
- DTC Marketers: With a CPI marketing campaign, brands have an opportunity to measure the cost of acquiring highly targeted consumer segments. This data can then be cross-referenced with shopping data to understand which markets represent the highest return on investment.
Getting the most from CPI marketing
Calculating your CPI is simple enough, but generating the highest ROI for your spend will require other strategies. When running a new campaign, consider the following:
- Campaign targeting: One benefit of CPI marketing is that it’s easier to identify key audiences, even among niche users. Use marketing strategies to target your core audience, and be prepared to adjust as new audiences become interested in your app.
- Optimize and scale your campaign: Analyze your campaign performance and target KPIs, then optimize to meet your core strengths. You’ll want to go beyond ad creative or platform considerations to optimize for country and region, and choose ad networks that reach engaged audiences.
- Don’t forget about other metrics: CPI is immensely significant when measuring the impact of your ad spend, but it’s not the only KPI to keep in mind. Keep an eye on metrics like CPA, ROAS, and other indicators for engaged users.
The value of CPI marketing
CPI marketing became a standard mobile advertising pricing model for a reason. It can better identify and target specialized audiences, measure interest in your app, and ensure ad spend is directed towards guaranteed installs. As such, it has inherent value for mobile marketers across all app categories and shouldn’t be underestimated.
If you need help maximizing your ROI while minimizing your CPI, reach out to the marketing pros at Tapjoy today.
Want to better understand the financial bottom line of your advertisements? Check out our article, “What is ROAS?” for a deep dive into measuring the effectiveness of mobile marketing campaigns.