What is Cost Per Install?
Cost per Install is one of the main pricing models used in app install campaigns along with CPA (Cost per Action). CPI sets a predetermined price that the advertiser must pay to the publisher every time a user installs their app as a result of an app install campaign. Therefore, it is different from CPA, in which marketers pay the publisher only for certain conversions, such as registration or purchases, which happen within the app after the engagement with an ad.
CPI is calculated by dividing the total cost of the advertising campaign by the number of app installs that resulted from the campaign (Ad spend / number of installs). A lower CPI generally indicates a more cost-effective advertising campaign.
Since the number of installs is a very important app growth metric, CPI is a good index for your app campaign. This metric seems to be very important for app developers as it allows them to create targeted campaigns while only paying for the install of an app. This means that they can calculate ROI by setting a profitable price for each install, helping the development of their user acquisition strategy.
How does CPI work with mobile games?
Hyper-casual games are particularly well-suited to app campaigns, as these games are typically designed to appeal to a broad audience and can be easily promoted through social media and other advertising channels. By targeting specific user segments with CPI campaigns, developers can attract new users at a lower cost and increase the ROI of their advertising spend.
Since hyper-casual games have become increasingly popular in recent years, attracting millions of players around the world and generating significant revenue, getting the lowest CPI possible is the ultimate goal for any hyper-casual game developer.
To maximize revenue, developers need to acquire users at a low CPI, so that the cost of acquiring each user is less than the revenue generated by that user. Hyper-casual games tend to adopt a monetization strategy exclusively based on ads, so to generate revenue they need huge volumes of users who will be exposed to ads.
Therefore, their goal is to acquire huge volumes of users at a low CPI to increase ROI. This means how many installs for your game can you get for the lowest amount spent when advertising. As hyper-casual games often rely on advertising to attract new users, CPI is a very important metric.
To maintain a low CPI for your videos, developers should follow these specific tips:
- Create simple videos that reflect the gameplay correctly
- Keep the colours bright and eye-catching
- Create unique levels for the CPI video
- Include essential elements and animations that enhance the game
When it comes to a video ad for a CPI app campaign, the most important rule is to capture the viewer's attention and to make your game immediately understandable for your audience, making the rules instantly clear for anyone.
What’s more, a CPI test for hyper-casual games is quite essential: all the major hyper-casual publishers will run a CPI test, which will then be used to calculate the cost for every user that installs your game from your video ad. Thanks to these tests, publishers will be aware of the engagement of your app already from the initial results.
How to Increase ROI of Mobile Games: the role of LifeTime Value
Other game categories engaged with CPI are strategy games and simulation games. These two game categories monetise mainly through in-app purchases, so they are different from hyper-casual games whose monetization only depends on ads. Strategy games are a type of video game where players use strategic thinking and planning skills to achieve a specific objective. These games often involve managing resources, building structures, and commanding armies to defeat opponents, and they can range from historical simulations to science-fiction adventures.
On the other hand, simulation games attempt to replicate real-world scenarios and experiences in a virtual environment. Players are often placed in control of a simulated environment that can range from a highly realistic simulation to a more light-hearted and casual experience.
From the perspective of boosting the ROI of strategic and simulation games, it becomes crucial to acquire high-LTV users, i.e. users who generate a lot of in-app purchases. Thus, it becomes necessary to compare CPI and LTV users to calculate the ROI of the mobile advertising campaign.
LTV (Lifetime value) is another crucial metric which is strictly connected with CPI. Lifetime value helps to calculate the sum of money a single user can bring to you and it can be defined as the revenue obtained from a single app user during their engagement with the app. To determine your LTV, you need to consider the average value of app usage and the number of in-app events generating revenues in a specific period of time. Then, you must measure the average time the user engages with the app: this data will allow you to estimate your average user’s lifetime value.
What you should take into consideration is that LTV allows you to spend more on advertising intelligently than those who simply look at a CPI cost, thus ensuring a greater chance for ROI in the long period. Low CPI and high LTV is the best condition for every app install campaign, thus the margin between these two indicators is your actual revenue.
CPI is a very important metric when it comes to picking a good strategy for mobile app marketing. On the other hand, hyper-casual games are very popular games which seem to be very well-suited to CPI campaigns. Therefore, be aware of the effects of CPI in games and dive deeper into the world of hyper-casual games to boost your app campaign.