Cost per install (CPI) and cost per action (CPA) are the main pricing models used in user acquisition campaigns for mobile apps and games.
In this article, we’ll focus on eCPI, which represents an important metric to understand the actual revenue brought by new installs.
- What is eCPI and how does it differ from CPI?
- Why is eCPI useful?
- eCPI differences between gaming and non-gaming apps
- Conclusion
eCPI is a marketing metric standing for ‘effective cost per install’. This metric shows the actual price advertisers have to pay the publisher for each new app install and encompasses all costs associated with a marketing campaign, including media spend, creative production and any other expenses directly tied to the campaign.
eCPI and CPI may look similar and almost interchangeable, but they have two main differences:
- Effective cost per install takes into consideration organic variances in a marketing campaign, thus offering a more comprehensive view of the overall cost.
- In eCPI, the price per install is calculated after the campaign.
Effective cost per install is calculated as follows:
eCPI = total ad spend / total number of installs
Among the different metrics available to measure the performance of marketing campaigns, eCPI stands out as a particularly significant indicator as it provides an insight into your campaign’s performance and effectiveness.
Here are a few reasons why effective cost per install is crucial for optimizing your campaign performance:
- A comprehensive view of expenses. eCPI provides a more comprehensive view of the cost per install by incorporating all associated expenses, thus allowing companies to better understand the actual cost of acquiring new users.
- Budget optimization. By analyzing effective cost per install, marketers can identify which campaigns are the most cost-effective and optimize their budgets efficiently. Campaigns with a lower eCPI indicate a higher ROI, allowing for smarter budget allocation.
- Long-term planning. Analyzing eCPI trends over time can provide insights into the long-term efficiency of marketing strategies. This data is crucial for planning future campaigns and for setting realistic user acquisition goals for your campaign.
eCPI significantly differs between gaming and non-gaming apps due to several factors influencing user acquisition strategies and market dynamics:
- Gaming apps typically exhibit a higher eCPI, driven by intense competition within the gaming vertical and the high value placed on each new user, who might engage in in-app events or watch ads between levels, thus generating substantial revenue. The immersive and engaging nature of gaming apps often requires more elaborate and expensive marketing campaigns to attract new users and retain them. Moreover, it’s important to highlight how hyper-casual games monetize through in-app advertising (IAAs) and their aim is to acquire a large number of new users at a lower price. On the other hand, gaming apps such as strategy and role-playing require more time and commitment by users and monetize through in-app purchases (IAPs). Therefore, they’re willing to pay higher eCPIs to acquire high-quality users.
- Non-gaming apps, on the other hand, generally experience a lower eCPI, as these apps may cater to broader, less competitive groups of users and often require less aggressive marketing tactics. In this case, as compared to gaming apps, CPA might be chosen over eCPI as the preferred metric. It’s important to consider that non-gaming apps monetize through in-app events such as purchases, deposits, subscriptions, etc. That’s why when it comes to non-gaming apps it’s more convenient to consider the cost of generating post-install events rather than eCPI itself.
The discrepancy between these two app categories reflects the different user engagement models and revenue generation strategies related to each app category, ultimately influencing the cost-effectiveness of user acquisition efforts.
eCPI is a vital metric for any mobile app marketer aiming to optimize user acquisition strategies. By providing a detailed and comprehensive understanding of the actual cost of acquiring new users, eCPI enables marketers to make data-driven decisions that enhance campaign efficiency, maximize ROI and drive long-term growth.
eCPI can be affected by different factors: the app category, for instance, plays a major role in influencing the effective cost per install. That’s why it’s important to be aware of the differences between eCPI for gaming apps and for non-gaming apps, so as to optimize your campaign according to your app’s category.
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