Cost per install (CPI) is a metric used to measure the cost of acquiring a new user for a mobile app through app store downloads. CPIs can be calculated by dividing the total cost of a marketing campaign by the number of app installs that resulted from that campaign.
CPI = Total cost of the campaign / Total app install resulting from the campaign
For example, if a campaign costs $10,000 and resulted in 5,000 app installs, the CPI would be $10,000 / 5,000 = $2.
CPI is a metric used commonly by mobile app marketers to evaluate the efficiency of their marketing campaigns and to compare the performance of different channels.
CPI enables mobile marketers to evaluate the efficiency of their user acquisition campaigns. By calculating the cost per install, mobile marketers can determine how much they are spending to acquire each new user. This allows them to compare the performance of different marketing channels and campaigns and identify which ones are the most cost-effective.
In addition, CPI can be a metric to help marketers optimize their marketing budget. Knowing the CPI for different campaigns allows marketers to allocate their budget more effectively. By focusing on the channels that have a lower CPI, they can acquire more users for the same budget, which helps to maximize ROI.
Finally, CPI is an indicator of the app's long-term profitability. The cost of acquiring a new user must be lower than the revenue generated over time, or it would mean the app is not profitable. By using CPI, mobile marketers can ensure that the cost of acquiring new users is within acceptable limits.
To optimize marketing efforts and achieve the lowest possible CPI, marketers must understand how various factors can affect this metric.
Location plays an important role in determining the CPI of a mobile app. In some countries, the cost of acquiring new users may be higher than in others due to the level of competition, purchasing power, and local ad rates. For example, the CPI for apps in the US may be higher than in developing countries due to a larger app market and higher ad rates. Marketers can use this information to adjust their targeting and budget allocation to minimize the impact of location on their CPI.
The device platform also affects the CPI. Generally, the cost of acquiring new users on iOS is higher than on Android, as the iOS app store is more competitive, and the users tend to have a higher purchasing power. This is because iOS users are more likely to spend on in-app purchases, subscriptions, and upgrades. Hence advertisers are willing to pay more for an iOS user. Therefore, marketers targeting both platforms should consider these differences when planning their campaigns.
The app category also affects the CPI. For example, some app categories, such as gaming and entertainment, tend to have a higher CPI than others, such as utility apps. This is because users are more likely to download and engage with apps in these categories, making them more valuable to advertisers. Therefore, marketers should consider the app category when setting their CPI targets.
The channel used to promote the app also affects the CPI. For example, advertising on social media tends to have a lower CPI than advertising on television because social media ads are more targeted and can be delivered to a specific audience. On the other hand, TV ads have a higher reach but less precision in terms of targeting, so the cost of reaching those users is higher. Marketers should consider this when choosing the channels to promote their app.
The ad network can also affect the CPI. Different ad networks have different pricing models and formats; some may be more effective than others at driving app installs. For example, using in-app ads can be more cost-effective than mobile web ads as they are more likely to be seen by users who are actively engaged with the app. Thus, marketers should compare the performance of different ad networks and adjust their campaigns accordingly.