What is Cost per Install
Cost per install (CPI) is the term that describes the pricing model of mobile user acquisition (UA) efforts to drive installations. CPI is specific to mobile apps. To increase an app’s exposure, a digital advert will be placed on a channel like FB, Snapchat, Google or other mobile ad networks, and, depending on the cost model utilized, each time a user taps on the ad/installs their app from the ad, a cost is incurred.
It’s calculated as follows: Cost of ad (expenditure) divided by the number of installs the ad was able to generate = CPI.
Why Cost per Install is Important
CPI is one of the most important metrics to track the efficiency of a mobile advertising budget and how many installs it’s possible to drive with X amount of dollars.
To improve audience exposure and enjoy the benefits of reaching new audiences, paid ad campaigns are a key component of an app marketing strategy in targeting high-quality audiences.
Let’s talk about Facebook which is one of the popular channels advertisers use for their paid ad campaigns and explains why CPI is important. A global issue overall but largely on Facebook is that there’s an ongoing competition for inventory which is the amount of mobile app advertising space that a channel has available to sell. The demand for advertising grows faster than the supply (inventory) does. As a result, ad space becomes more desirable. Because the cost to advertise increases by the nature of supply and demand, the CPI increases too.
This only highlights the importance of tracking CPI in order to manage that increase as best one can, which is done by optimizing the following:
- Targeting
- the ad’s creative performance
- tap through rate
- and App Store conversion rate (CVR) for paid traffic which has a direct effect on CPI.
