What is cost per install
CPI stands for Cost Per Install, meaning the cost that an advertiser pays each time a user installs their mobile app after clicking on an ad.
CPI is a performance-based pricing model, which means that the advertiser only pays for results that directly contribute to their business goals, such as app installations. This pricing model is particularly popular among mobile app developers who want to promote their apps and acquire new users.
How to calculate CPI?
Here is the formula to calculate CPI:
CPI = Total Campaign Cost / Total Number of App Installs
For example, if your advertising campaign cost $10,000 and generated 5,000 app installs, the CPI for your campaign would be:
CPI = $10,000 / 5,000 app installs
CPI = $2 per app install
This means that for each app install generated by your campaign, you paid an average of $2.
To calculate CPI (Cost Per Install) in mobile advertising:
- Determine the total cost of your advertising campaign: This includes all the costs associated with your advertising campaign such as ad spend, creative production, and third-party fees.
- Determine the total number of app installs generated by your campaign: This includes all the app installs that can be attributed to your advertising campaign. You can track this using mobile app analytics or attribution tools.
- Divide the total cost of your advertising campaign by the total number of app installs generated: This will give you the CPI for your campaign.
CPI in advertising
The CPI pricing model is based on an auction system, where advertisers bid for ad placements in mobile apps. The advertiser with the highest bid typically gets the ad placement, and they pay the cost per install for each user who installs their app after clicking on the ad.
CPI pricing can vary widely depending on various factors, such as the competition for ad placements, the target audience, and the app category. CPIs can range from a few cents to several dollars, depending on the app’s popularity, niche, and the value of a new user to the advertiser.
Why CPI is important
CPI is a crucial metric for mobile app marketers as it directly affects the ROI of their advertising campaigns. When developers purchase ads, they pay for installations, not targeted actions, which is also true for CPA campaigns where costs are related to CPI. Therefore, to evaluate the efficiency of acquiring traffic, it’s essential to consider the income generated by users who installed the application during a specific period.
By optimizing their campaigns for a lower CPI, advertisers can acquire new users at a lower cost and enhance the profitability of their app. However, it’s worth noting that a low CPI does not necessarily indicate a high-quality user. Advertisers must balance CPI with other metrics, such as retention, engagement, and LTV, to ensure the long-term success of their app.