‘I’ve got a $1 CPI, how many installs can I get?’
One of the best things about working with video ad networks is the ability to run CPI campaigns.
In mobile app install campaigns, cost per install (CPI) serves as a useful mental shortcut. When a $20,000 marketing campaign is finished, if we got 4,000 installs, we know the CPI was $5.
The challenge is reaching a desirable CPI — and the internet is full of articles about how to do it. Usually, it comes down to a basic rule: the lower your bid, the better your ROI. But it’s not quite that simple, which is why we at Chartboost often hear a question that goes something like this:
“I’ve got a $1 bid. How many installs can I get?”
While marketers think in CPI, ad networks don’t. Most ad networks actually run on CPM, or the price you pay per 1,000 impressions. So when you place a CPI bid, it has to be translated into the digital ad tech-friendly language of eCPM.
To help untangle how to translate a CPI to eCPM, we’ve put together this short guide to understanding install campaigns. By the end, you should have an idea on how to predict the performance of your campaign — no matter how large, or small, your budget may be.
CPI traffic buying basics
Let’s say you put a $1 CPI bid together with your best creatives and set your campaign live.
Once your campaign is live it starts to receive impressions. These impressions convert into clicks. Clicks eventually convert into installs. Only then do you pay your CPI.
As your ad is being served on the network, it accrues two performance statistics. Click-through rate (CTR) comes from the percent of people clicking the ad. Install rate (IR) is the percent of users who install after clicking the ad. These combine to an important metric: the number of installs you receive per 1000 views, or installs per mille (IPM).
IPM = (CTR * IR) * 1000
The higher your IPM gets, the better your eCPM will be:
eCPM = CPI x IPM
So if we go back to the question. “How many installs can I get for a $1 bid?” We can now say that it depends on your IPM.
Let’s say your IPM is 5 and your bid is $1: your eCPM will be $5.
Next you may ask, how many installs can I get with a $5 eCPM?
But again, the answer is a bit complicated, because your bid enters a system that includes other advertisers who can bid higher or lower than you.
You’re in a competition
If you’re new to Chartboost, the other advertisers on the platform have an advantage: they have already tested traffic, so they know their best performing creatives and can optimize publishers and bids accordingly. You may have a great IPM in a market like the US, but if your bid price is too low, you still won’t get much traction.
User behavior is also very important because of traffic fluctuations like higher activity on weekends, which can lead to better results for a given bid on certain days of the week.
In sum, here’s what newer mobile marketers should know:
- Chartboost is a dynamic platform with high competition, so it’s impossible to predict a number of installs you will receive — you need to test it yourself!
- IPM helps to understand the inner workings of CPI
- Performance depends on your creatives, targeting, app store optimization and the type of traffic, among many other things.
If you want to hit your targeted CPI, you’ll need to do three things;
- Test your ad creatives
- Make sure your targeting metrics are set up for success
- Be ready to test new approaches that can result in improved IPM
We’ll cover more of these topics in upcoming articles about creative testing and Chartboost tools, plus an advanced guide to the future of in-app media buying. In the meantime, learn more about advertising with Chartboost here.