In the mobile app marketing ecosystem there are many different strategies to help your user acquisition efforts. A lot of advertisers rely on app install campaigns they can run through Google, Facebook and programmatic partners. While Google and Facebook work with traditional Cost-Per-Click pricing models, programmatic partners such as DSPs (Demand-Side-Platforms) and Ad Networks provide different solutions and alternatives. Indeed, advertisers and app developers can often choose between CPI (Cost-Per-Install) app campaigns and CPA (Cost-Per-Action) app campaigns. The former are focused on growing the user base while the latter aim at acquiring only high-quality users. So what is the best choice for your app user acquisition strategy and can CPA app campaigns also help scale the volume of installs ?
Now let’s dive deeper into the differences between these pricing models for an app install campaign and try to answer these two questions.
CPI vs CPA App Campaigns
CPI and CPA app campaigns are both performance based pricing models, which means that advertisers pay only for concrete results they get delivered such as installs or actions. Therefore, these two pricing models are both less risky than Cost-Per-Mille and Cost-Per-Click campaigns. As the name suggests, CPI app campaigns are designed to have a payout for each install delivered to the app by the app install campaign, and this payout can be either fixed or variable depending on DSPs and ad networks. Instead, CPA stands for Cost-Per-Action, and the payable event is not the install anymore, but a post-install event which takes place within the app. The post-install event is often aligned with some app’s business KPIs, so that when a user carries out the chosen post-install event revenues are generated for the app. Some examples of these post-install events can be in-app purchases, first deposits or subscriptions. The payout here is usually higher than the one for CPI app campaigns but this kind of app install campaign is less risky for advertisers, because they have to pay only after users generated some revenues for them.
The choice between CPI and CPA pricing models depends on different factors, but the most relevant one is the goal of the app install campaign. CPI app campaigns aim at growing your app user base and making you increase your app market share. In addition, a successful CPI app campaign helps raise the brand awareness of your app. Instead, when running CPA app campaigns the goal is to acquire high-quality users, who engage with your app after the install and drive revenues by generating post-install events. High-quality users will help increase the ROAS (Return On Ad Spend) of your app install campaign and the overall app revenue stream. However, these two goals aren’t mutually exclusive, and it is actually possible to combine them.
When To Switch From CPI To CPA
As mentioned above, CPA app campaigns are less risky for advertisers and, as a consequence, app marketers tend to prefer this type of campaign. However, in the short term perspective, a CPI campaign can be more effective for acquiring as many new users as possible and scale volumes faster. Then, once the app has gained a large user base, the strategy may shift to increase revenues and a CPA app campaign can be a better fit. Indeed, the new goal would be to acquire mainly high-quality users, who complete the whole user journey inside the app by carrying out post-install events.
Here’s where the second question we asked at the beginning of this article comes into play.
The Impact Of CPA App Campaigns On Installs Volume
Switching from CPI to CPA within the context of an app install campaign is a frequent move by advertisers who aim at increasing their revenue and making their campaign ROAS positive. The main goal is to bring in high-quality users but does it always happen at the expense of decreasing the growth rate of the overall user base ? There isn’t a unique answer to this question. Indeed, running a CPA app campaigns for an app with a large user base and a high number of daily installs can for sure help increase the installs’ volumes while optimizing the app install campaign towards those high-quality users who generate revenues through post-install events. At the same time though, this benefit is not immediate and can take a lot of time for apps which are still seeking to increase their user base. The optimization towards high-quality users doesn’t always lead to an increase in the volume of installs compared to the results of CPI campaigns.
In conclusion, both CPI and CPA app campaigns have benefits for advertisers in terms of risk and possible outcomes, but there are differences to take into account when choosing the best pricing model for your user acquisition strategy. Each campaign serves a different purpose and you should choose which one is more aligned with your primary goal. It is even possible to switch from one option to the other but the consequences of this shift depend on several conditions. Furthermore, the impact of one type of campaign on the other is not necessarily predictable and immediate.