The world of mobile app marketing and user acquisition in mobile apps becomes more and more competitive by the day, which is why it is more important than ever for you to be able to manage your budget and not squander any money when acquiring new users.
A CPI (Cost Per Install) model, among other things, serves this exact purpose, especially in the early stages of user acquisition, but it will be effective only if done right, that is with the right targeting.
And, if we were to give a definition to “right targeting”, we couldn’t possibly not mention the fact that you can’t just promote your app everywhere: you have to aim carefully and pick your targets in a cost-effective manner.
Let’s take a look at the correlation between CPI and geolocation.
- Cost Per Install: a widely employed pricing model in mobile app marketing
- The influence of geolocation on CPI
- Some data about CPI by country in mobile app marketing for 2024
- Geolocation does not act alone
Cost Per Install (CPI) serves as a vital metric in mobile app marketing, representing a performance-based pricing model widely embraced by advertisers. A CPI model quantifies the expense incurred by advertisers for every user that installs the app. It is calculated by dividing the total cost of user acquisition activities by the number of new installs.
To gauge the effectiveness of a mobile app install campaign operating under a CPI pricing model, it is essential for the revenue generated by the new installs to exceed the costs invested in promoting these installs.
Within this framework, advertisers remit a fee for each user installation of their mobile application. The key advantage inherent in the CPI model lies in its accountability, ensuring that advertisers solely pay for concrete installations. It is a much safer model than the Cost Per Click (CPC) employed by Facebook Ads and Google Ads, which does not guarantee an actual outcome or conversion, meaning that advertisers may pay for clicks that do not result in the desired install.
This direct correlation between marketing investment and user acquisition proves particularly enticing for advertisers aiming to increase app downloads rapidly. The CPI model, by design, aligns financial investment with tangible results, allowing advertisers to allocate budgets judiciously and maximize the impact of their marketing endeavors.
There are some pros a CPI model features.
- A measurable ROI: Advertisers can easily measure the Return On Investment (ROI) as they pay for tangible results, i.e., app installations.
- A cost-efficient model: With CPI, advertisers have better control over their marketing budget, ensuring that they pay for the desired outcome.
However, it may also present some disadvantages.
- Engagement is limited: CPI focuses solely on the installation metric and does not guarantee user engagement or long-term app usage. That is something that, on the contrary, a CPA (Cost Per Action) model aims to take care of.
- The impact of the competition: Highly competitive markets may lead to increased CPI rates, making user acquisition more expensive.
Advertisers opt for the CPI model to promote their apps because of the low risk it provides, since they are paying only for actual installations. In this way, they can allocate their budget more efficiently and maximize the impact of their marketing efforts.
There are several factors that contribute to determining CPI. In this article, we are going to particularly focus our attention on just one.
In fact, the geographical region picked as target influences CPI. Typically, tier-1 countries like North America and Central Europe tend to have higher CPIs compared to regions like the Middle East, Asia, or Africa, where CPIs tend to be lower.
By simply taking a glance at this graph, there are a few observations we can make about how geolocation impacts CPI around the world.
- USA and Canada compete for the highest CPIs
The United States and Canada exhibit higher CPI rates, indicating a more competitive market and potentially higher mobile app marketing costs. Advertisers targeting these countries may need to allocate larger budgets to remain competitive.
- Central-Europe countries follow very closely
While the UK, France, and Germany show relatively close CPI rates and just below North America, the lower rate in Spain may suggest a potentially more cost-effective place for app marketing. Advertisers could capitalize on this by adjusting their targeting strategies.
- There may be opportunities in IndonesiaIndonesia stands out with a notably low CPI, making it an attractive market for advertisers seeking cost-effective user acquisition. The lower cost may be attributed to factors such as lower competition and a developing app market.
Understanding these country-specific variations in CPI is crucial for advertisers to tailor their marketing strategies effectively. Adapting to regional differences in user behavior, market maturity, and competition can also allow advertisers to optimize their budgets and achieve better results in their mobile app marketing campaigns.
There are two other important factors that affect the value of CPI.
- The app's category is particularly influential, especially in gaming apps . Hyper-casual games, known for being easy and played in a relaxed manner, usually have a lower CPI. On the other hand, strategy games, where in-app purchases play a substantial role, require a large user base, making their impact on CPI more pronounced.
- The operating system on which the app is installed is another key factor. There's a common belief that iOS users generally have higher purchasing power than Android users, leading to Apple operating systems having a more significant impact on CPI.
It is fundamental to understand that these factors are always intertwined and in a state of constant interaction among them.
Choosing to target tier-1 countries and iOS users simultaneously will lead to high advertising costs and higher CPI, but it must be considered that this strategy could be much more profitable.
On the contrary, cross-targeting countries with lower CPIs and Android users, will have a minor impact on budgets, even though it will very likely lead to smaller revenues.