What is a CPI campaign?
Cost per install, also known as CPI, is a predetermined pricing model used in app install campaigns for which every advertiser agrees to pay to the publisher every time a user installs their app. Therefore, this model is different from CPA, in which the advertiser should pay only after some post in-app events or item purchases of the users. This value is one of the most used metrics in app promotion by marketers because it serves to represent a campaign optimization tool.
A CPI campaign is a marketing strategy which guides mobile users to download a specific app previously advertised across platforms and social media. In these campaigns, ad networks place an ad to push app installations and every CPI rate can vary across platforms.
Benefits and drawbacks of a CPI campaign
Users install is essential for the development of every app, thus, there are many reasons which explain why running CPI app campaigns can bring benefits:
- Low risk for advertisers
This is a performance-based method that seems to be less risky for the success of the app because advertisers only pay for users who install the app and not for the traffic that is exposed to the ads, as in the case of other methods such as CPM and CPC.
- Easy to grow user base quickly
In the CPI, the number of installs is a crucial metric. That means a high install rate implies reaching the right target audience at the right time and with the right creative. For this reason, a CPI campaign can help increase the popularity of your app and its visibility in the app store.
- Good KPI for the campaign
CPI is a pretty easy way to measure the ad spend and to understand the performance of a campaign. It can be useful looking at long-term retention metrics and your CPI if you want to achieve sustainable growth for your app. For this reason, CPI should only be one component of your KPIs, along with other metrics, such as LTV and ROAS.
However, it’s not just benefits! Let’s see some of the most common drawbacks:
- Installs do not always mean engagement
Installs do not necessarily imply the engagement of the user or in-app revenues. That means that an install doesn’t always produce in-app purchases and, what is more important, it doesn’t generate revenue. If a user installs and quickly quits means that you have wasted some marketing budget.
- CPI is not as profitable as CPA
With CPI there is no guarantee that the user will remain engaged with your app after the install. For this reason, many advertisers could prefer CPA as it may include all the actions that occur after the install. Advertisers don’t have to pay the publisher until the user has performed some kind of action within the app, such as purchases, which generate in-app revenues.
Why should you optimize CPI campaigns?
The optimization of a CPI campaign can lead to significant benefits in terms of volume of installs, cost and revenue depending on what the goal of the optimization is.
So, why should you optimize a CPI campaign?
- A CPI campaign can be optimized to increase its conversion rate, as in the case of every app install campaign. In this way, it gets easier to raise the volume of installs as quickly as possible. The increase in the number of installs is important because it represents the first step of the conversion funnel. Setting up a funnel analysis is used to enable the growth of your mobile app.
- Decreasing costs can also be the main goal of an optimization used to boost the conversion rate. Therefore, by improving your conversion rate you can also use your budget more efficiently by decreasing costs. Besides, for all the advertisers working at variable CPI, improving the conversion rate also helps lower CPI.
- The optimization can also be aimed to increase the number of specific in-app events to boost revenues and reduce eCPA. This activity helps ROI’s growth. The equivalent cost per acquisition (eCPA) tells us what the advertiser would have paid if they had decided to work with a CPA campaign, paying for conversions and not installs.
The optimization for CPI campaigns
Here are some tips on how to optimize your mobile marketing strategy with CPI:
- Location: the location of the user is an important element for the set-up of the cost of a CPI. DSP, which works with machine learning algorithms, can use sophisticated targeting capabilities, targeting users by state, city or even ZIP code. Therefore, the advertiser is expecting that the richer countries will be made of high-quality users that spend more in-app. That’s why more developed areas often come with a higher price tag for CPI. Generally, the location can refer to the State, the city or the zip code of the different territories.
- Os version: first of all, there is an important difference between Apple and Android that can influence CPI. For example, iOS users usually spend more than the average android users. That is because iOS is more dominant in more developed countries such as North America, Japan, and Europe. On the other hand, Android has a great predominance in regions like India and Southeast Asia. There is also a significant difference between the different versions of the Os, which means that the final versions will be more profitable in terms of CPI than the others, for example.
- Creatives: they consist of banners, videos, interstitials, playable and native. Every type has a different cost which generates different results. Banners are cheaper than any other category and they are also able to reach millions of users every day. Furthermore, they can also be able to initiate a user acquisition strategy increasing the popularity of the brand of the app. Although banners are cheaper than any other method, using videos and playable for categories such as video games seems to be more profitable.
A CPI campaign is a business model used in the mobile app marketing industry by publishers to meet their marketing goals. This method can provide some benefits such as low risk for advertisers, easy to grow user base quickly and good KPI for the campaign.
However, the campaign can also bring some drawbacks which affect the problem between installs and engagement, and the low profitability of CPI. Nevertheless, you can focus on some specific features which are used to optimize your CPI campaign: location, Os version and creatives.