Cost per Install (CPI) is a Key Performance Indicator (KPI) widely used in mobile user acquisition to measure the effectiveness of campaigns aimed at attracting new users. In this article, we’ll explore how to calculate CPI, the trends expected for 2025, the factors influencing its value, and the difference with other metrics such as the Cost per Action (CPA).
What is Cost per Install
Cost per Install (CPI) is one of the most relevant KPIs for evaluating the effectiveness of advertising campaigns aimed at user acquisition.
It represents the amount of money an advertiser pays each time a user clicks on an ad and installs the app. This pricing model enables marketers to track the cost of acquiring new users, helping them optimize their advertising budgets.
In simpler terms, Cost per Install measures how much it costs to convert impressions and clicks into app installs.
Cost per Install formula
Cost per Install (CPI) is calculated by dividing the total advertising spend by the number of paid installs during a specific time period, obtaining the average cost of each new app install.
The formula is:
CPI = Total Advertising Spend / Number of Installs
In this formula, the total advertising spend covers the costs covered by the advertiser during the campaign. Meanwhile, the number of installs represents the new app installs generated during the campaign.
Cost per Install trends in 2025
By 2025, it is estimated that the paid app installs will reach $94.9 billion. However, this amount will be affected by factors such as global economic trends and changes in privacy regulations.
Nevertheless, on average, users are expected to spend $49.93 on in-app advertising, while the mobile advertising industry continues to grow globally.
Cost per Install (CPI) varies based on several factors and typically ranges from $1.50 to $5.00. Companies are enhancing their CPI strategies by using advanced metrics and AI-driven analytical tools to improve performances and predict outcomes.
Moreover, recent trends indicate that while video ads are more expensive, they deliver higher engagement rates. For example, a study revealed that interactive ads can reduce Cost per Install by up to 20% compared to traditional ad formats.
What factors affect Cost per Install
Cost per Install (CPI) can be affected by a number of key factors:
- App category: the type of app plays a major role in determining CPI. For example, gaming apps generally have higher CPIs than other categories and even within the gaming category there can be variations. Hyper-casual games, known for their minimalistic style, typically have lower Cost per Install, while strategy games, which rely on in-app purchases and require a larger user base, tend to have higher CPI.
- Country: the geographical location of users is another crucial factor. Regions with higher socioeconomic status often show higher CPIs, since users in these areas tend to spend more on apps. For example, tier-1 countries, including North America (the average CPI is $5.30) and Central Europe, have higher CPIs compared to regions like the Middle East, Asia, and Africa, where costs are generally lower.
- iOS vs Android: the operating system also affects CPI. On average, iOS users spend more than Android users, partly because iOS is widely used in regions with higher purchasing power such as North America, Japan, and Europe. Meanwhile, Android dominates in areas such as Latin America, India, and Southeast Asia. In terms of cost, the average Cost per Install for Android is approximately $1.20, compared to $3.60 for iOS.
Why to work with Cost per Install
There are a number of reasons why you should work with Cost per Install:
- It is a performance-based model that ensures advertisers avoid spending money on impressions and clicks that do not generate concrete results.
- It is easy to monitor and thus allows you to manage your budget effortlessly.
- It is easier and faster to optimize as it does not require post-install data and with appropriate optimizations, it can be further reduced.
- Since optimization is fast, it is equally fast to maximize performance and increase the numbers of new installs.
CPI vs CPA
Cost per Install and Cost per Action are two pricing models that focus on different stages of the user journey within the app, with distinct goals. As we have seen so far, Cost per Install is a key indicator for measuring the average cost of acquiring new users based on installs.
On the other hand, Cost per Action (CPA) is a pricing model in which the advertiser pays the publisher only when a user takes an action within the app, such as a subscription, purchase or any other post-install event, after interacting with the ad.
This approach allows marketers to target users who are more likely to engage with the app long after installation. Moreover, this model is less risky for advertisers, allowing them to optimize ad spend to achieve more positive ROI/ROAS outcomes.
However, it is important to consider that CPA campaigns take more time to collect enough data on conversions, requiring an initial optimization period to refine results.
Conclusion
- Cost per Install (CPI) is a key metric for evaluating the effectiveness of an advertising campaign.
- It helps marketers manage their budgets more efficiently.
- While many elements can affect CPI, it remains a crucial tool for refining new user acquisition strategies.
