What Is Cost Per Install?
CPI is the market price used in mobile app campaigns to measure the impact of ad spend. It is the cost that advertisers pay for a single install.
- CPI is a fixed price, set in advance, and is the cost that advertisers pay the publisher for a single install
- The CPI cost is determined by many factors, such as geolocation, vertical, and ad unit
- CPI is low risk for advertisers compared with other pricing models, such as CPM
How Do You Calculate Cost Per Install?
Cost per install is calculated by dividing the total ad spend for a particular campaign over a specific period by the number of new installs attributable to the campaign during the same period.
To simplify this, here’s the formula for calculating cost per install.
The Cost Per Install Formula
So, let’s say you spent 500 US dollars on advertising for your app, and it produced 250 new app installs, your CPI would be calculated as follows.
|$500||÷||250||=||$2 per Install|
Are There Factors That Affect CPI?
You should bear in mind when you’re calculating your CPI that there is a short list of factors that will inevitably influence your CPI metric, including:
- Geolocation: More developed GEOs will have a higher CPI. For example, in the United States, the average CPI will be vastly different to the average CPI in Latin America.
- Channel: Some niche channels that have a very select audience are able to demand a higher CPI compared with mainstream channels.
- App vertical: Some app genres are more competitive than others. The CPI for hypercasual games is usually drastically lower than other gaming verticals such as casual and hardcore games.
- Cost of ad unit: A CPI might be higher for some of a publisher’s inventory – especially if it is more in demand.
Why Use Cost Per Install?
CPI is a pretty easy way to measure the return on investment (ROI) from your ad spend – especially, if you are buying ads on a pay-per-install basis. In that case, you only pay for the ad network once someone has downloaded and installed the ad. This is one of the best ways to boost your ad spend.
It incentivizes ad networks to deliver the highest number of installs, since they only get paid when users install your app. Analyzing CPI data can help you determine the most efficient use of your ad spend and which platform is the best for your app to boost downloads.
Why Does Cost per Install Matter?
1. Track the cost and effectiveness of your paid digital ads.
The biggest benefit is that you get what you pay for. If your goal is to boost app installs, you can adjust the CPI to increase the number of installs you’d like to get from a certain channel. Alternatively, you can adjust the price to better hit your ROAS targets for a certain channel.
2. Boost your rankings in the app stores.
If you spend a lot on paid acquisition, this can lead to more downloads. And a boost in your app ranking. Leading to an uplift in your app’s visibility.
3. It’s low risk for advertisers compared with other pricing models.
To install an app, there must be high user intent. Meaning, advertisers know that they are paying for users who are generally interested in their app and more likely to engage with it. Meaning, this pricing model reduces wasted marketing efforts, time, and money.
Should You Use Cost Per Install as a KPI?
You could have the best app in the market, but if you don’t look at long-term retention metrics as well as your CPI, you might not achieve any of the sustainable growth you want for your app.
Here’s the bottom line: Installs are great, but it’s the postinstall actions that lead to longer-term success for your app. So, realistically, CPI should be just one component of your KPIs, along with other metrics such as:
- Daily active users (DAU)
- Monthly active users (MAU)
- Session length
- Average revenue per user (ARPU)
- Monthly recurring revenue (MRR)
- Return on ad spend (ROAS)
- Lifetime value (LTV)
You should use CPI for many reasons, as it is a good indicator of your campaign’s effectiveness and is low risk for advertisers compared with other pricing models.
But whatever you do, make sure you always maintain a holistic overview of your CPI and other metrics, such as LTV and ROAS. Otherwise, you’ll only have a one-dimensional insight – a short-term insight – into how your app is performing.
FAQs about Cost per Install
“CPI” stands for “cost per install.”
Prices will vary greatly depending on the type of app, ad unit, and geolocation.
To calculate the cost per install, take the amount of your mobile ad spend and divide it by the number of installs your ads generated.
In short, it depends. You need to be competitive within your app genre, GEO, and platform.