What is cost per install? (CPI)
What does cost per install mean?
Cost per install (CPI) is a cost model for user acquisition (UA) campaigns, and is defined as the fixed rate an advertiser pays to an ad network once an app is installed. CPI is a metric exclusively for mobile apps and used by marketers to measure their advertising budgets.
How do you calculate cost per install?
Cost per install is calculated by dividing the marketing spend for a campaign by the total number of app installs associated with that campaign. For example, if you spent $500 on mobile ads for your app and the campaign accrued 150 installs, the CPI of your campaign would be $3.33.
How does cost per install work?
Cost per install is a metric related to customer acquisition costs (CAC) and is used to identify the success of marketers’ paid advertisements to capture new users. Marketers typically monitor CPI in tandem with the average revenue per user (ARPU) to ensure the revenue generated is higher than what is spent to acquire new app users. As CPI only tracks new user acquisition, it’s essential that marketers also utilize other metrics such as engagement and session length to monitor churn.
Note: A CPI campaign is not the only way to amass new app users as marketers also use organic traffic, content marketing via blogs, websites, emails, app store optimization (ASO), etc.
Why is cost per install important?
CPI is a vital metric marketers use to make sure their campaigns are staying on budget. As the ad network is only paid once the app is installed, this model appropriately rewards and encourages networks to target the best-possible audience for your CPI campaigns.
Differences between CPI and other app marketing metrics
CPI is an essential metric for app marketers but should not be confused with CPM, CPA, or eCPI. Below, we cover how these three metrics differ and how each is used.
What’s the difference between CPM and CPI?
In a cost-per-mille (CPM) model advertisers pay when an advertisement is viewed, but the CPI model takes it further and demands that the publisher is paid only after the app is installed.
How does CPI differ from CPA?
Cost per action (CPA) is a fixed rate an ad publisher pays to an ad network once a user completes a predefined event that occurs post-install, like a registration or in-app purchase (IAP). So while both cost models are predetermined, they have different areas of focus in the app user journey.
Explanation of CPI vs. eCPI
Closely related to CPI, effective Cost per Install (eCPI) is also a metric used to calculate how much an app install from a new user costs.
The two main differences are:
1. eCPI takes into consideration organic variances in a marketing campaign.
2. In eCPI, the price per install is calculated after the campaign and not before it, like in CPI.
eCPI is harder to calculate as it considers the viral component of a campaign, also called the “K-factor”. To learn more, check out our article: Measuring K-factor in marketing: What are the effects of paid UA on organic installs?
How do I reduce cost per install?
App marketers across the board desire to bring down the CPI on their campaigns to increase their return on ad spend (ROAS), and ultimately, their return on investment (ROI). Not to worry, below we’ve listed some insights on how marketers can reduce cost per install.
Review these 5 variables impacting your CPI campaigns
- Ad networks
CPI will fluctuate depending on the media source an advertising network uses. Check out the rates per platform on Business of Apps: CPI Advertising Networks.
- Your app’s vertical
The category of your app will heavily affect the overall CPI of your campaigns. For example, hybrid casual games typically boast a significantly higher CPI than an e-commerce app.
- Device platforms
Did you know that iOS apps and Android apps greatly differ in CPI? Research shows that Apple users tend to spend more on in-app purchases than Android users, meaning campaigns for iOS installs trend higher in terms of CPI.
- Target markets
This shouldn’t come as a shock, but CPI varies by country/region. For instance, the U.S. tends to have the highest cost for this metric, which makes sense given the stiff app competition in the American market.
5. Ad types
From banner ads, to playable ads, to rewarded video ads, the ad type of a campaign will considerably influence its CPI as users interact with each differently. For example, rewarded videos are typically two times more effective than interstitial ads, but will likely cost more.
Compare results to industry benchmarks
Before setting your business-specific goals, compare your app’s performance against the industry benchmarks for CPI.
According to Business of Apps, these are the latest key average cost-per-install statistics:
- Mobile app CPI in North America is US$5.28, US$0.34 in Latin America, US$0.93 in APAC, and $1.03 in EMEA.
- iOS app CPI (globally) is US$3.6.
- Android app CPI (globally) is US$1.22.
- iOS games CPI is $4.3.
- Android games CPI is $1.15.
Need more benchmarks? Download Adjust’s ebook Mobile app trends: 2023 edition for the latest trends on 5,000+ apps, including sessions, installs, stickiness, retention, and ATT opt-in rates.