Cost per install (CPI) marketing allows app development teams to learn if their advertising campaigns are paying off. The metric directly ties total ad spend to the number of downloads that resulted from the ad campaign. Companies wanting to measure the success of an ad campaign should consider integrating CPI into their marketing plans.
Between The App Store and Google Play Store, there are over 4 million apps available for users to download. That leaves the market pretty saturated for newcomers who want to get their name out and cut through the noise.
That’s where app marketing comes into play. Plenty of companies focus so intently on developing their app that marketing is completely secondary. While functionality should come first on your priorities list, it should still be executed strategically with meaningful goals and key performance indicators (KPIs).
Metrics are important in every business but especially paramount in digital-only businesses such as tech and mobile app development. It’s unlikely that you’ll see or speak to many of your users in person. You’ll need to identify and track targeted metrics in order to learn about how your users perceive and experience your product.
CPI marketing is one way of handling this process. CPI is a popular KPI in the app development world, ideal for those wondering if they’re connecting with their user base early into their journey with your app.
This article will define CPI marketing as well as detail ideal use cases and benefits for development teams in the mobile applications space.
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What is CPI Marketing?
CPI marketing is mobile application marketing that focuses on CPI (cost per install) as a primary metric. CPI is a customer acquisition metric — it tells marketers how many people downloaded the app after being exposed to a related ad campaign.
CPI is calculated by dividing the total cost on app ad spend by the number of users that installed the app. This results in the amount of money your company is spending for a single download of your mobile app.
CPI marketing focuses exclusively on the customer journey that takes place before ever opening the app at all. This includes exposure to advertising or promotional content on mobile app marketplaces, social media, search engine results, and more.
Example of CPI Marketing in action:
For instance, Google Ads offers unique advertising options for mobile apps on the Google Play Store. Aside from the host platform, these app advertisements appear very similar to other PPC ads.
Source: Google Ads
In Google’s example, a search for an adventure game will undoubtedly yield hundreds of results. App marketers can funnel their mobile game to the top of results pages by investing in an App Campaign. Ads are designed, bidded on, and controlled by the companies themselves, so there’s a decent level of flexibility as well.
In a mobile app advertising campaign like this one, users that click on the ad will be directed to the app listing. Often, companies are charged a set amount of money each time a user clicks on an ad, but payment structures can also vary depending on the platform hosting your ads.
The money spent by users clicking on ads will make up your total ad spend, which will be divided by the number of users who decided to install the app onto their mobile device after seeing the ad.
Mobile App Metrics to Pair with CPI
CPI marketing implies that the CPI metric is center stage in your app marketing efforts. However, CPI can’t be the only metric you track to determine your app’s success.
Here are a few other KPIs that will round out your understanding of app performance:
- Retention Rate: This is an engagement metric that tells companies how many users continue using an app after a period of time passes. This gives businesses a sense of their actively engaged audience.
- User Growth Rate: This metric measures how much your user base has grown (or shrunk) over a given period of time. This is a standard measure of performance over time.
- Crashes: As your app acquires more users, the more likely it is to crash. You’ll want to keep track of the number of crashes and how it affects other app performance metrics.
- ROI: Return on investment will tell you whether app performance is positively contributing to your bottom line, making it an essential for all app development teams.
- Load Speed: This is the average amount of time for an app to load after being clicked on by a user. Slower apps typically mean decreased engagement from users.
There are tons of KPIs out there, but these should build upon the information that CPI provides. The above app metrics will keep you informed of engagement and user experience following app downloads.
4 Benefits of CPI Marketing
CPI is a powerful metric that’s ideal for a wide variety of app development houses. Here are just a few of the benefits that tracking CPI can have on your product:
- Showcases app marketing performance
- Helps segment audience
- Provides insights that keep costs low
- Emphasizes user journey pre-download
CPI marketing is just as much a marketing metric as it is a mobile application KPI, making it prime for app marketers everywhere.
The CPI formula calculates how much each installation costs. It has nothing to do with in-app performance, downtime, bugs, or user experience.
Source: Business of Apps
By isolating the first part of the user journey (the initial download), your company is evaluating the quality of the app marketing campaign. This includes the quality of the ads, graphics, videos, and other promotions that went into attracting a user base.
CPI marketing is a system that’s meant to be iterative. Companies that use CPI as a way to judge their marketing practices will be able to quickly adjust when CPI is trending downward.
Reviewing demographic information against your CPI metric over time will help companies marketing newer apps accurately segment their audience.
By evaluating the types of users who are clicking and downloading your mobile app, you can learn traits about your audience. With this knowledge, you can more effectively market to them.
Source: Seven Rooms
For instance, companies regularly segment audiences by geographical location, demographic information, behavioral purchasing habits, and presumed beliefs and values.
By comparing CPI data with demographic information, you’ll understand the audience that you’re currently appealing to with your advertising.
You can use this information to adjust advertising campaigns based on your target audience goals. If you find that you’re interested in an audience you hadn’t considered before, you can work them into your marketing plans as well.
One of the main perks of actively tracking CPI is that you’re able to catch ad campaign issues quickly and address them before suffering financial challenges.
App marketplaces make it very easy to edit your daily budget cap and overall campaign on ad management dashboards. That means that you can adapt your budget to ad campaign performance, so long as your performance metrics can indicate a change is needed.
Companies will benefit from tracking CPI on a regular basis. When this data is tracked over time, it’s easy to spot downward trends in cost per download.
If costs are getting too high (CPI increases), you can rapidly make adjustments to your advertising manager that will scale down spending until you can further diagnose the problem.
In using CPI as an indicator of ad performance, you’ll have the flexibility to react to challenges with grace.
Many mobile app metrics you’ll track will involve app performance and user experience — everything that users experience after downloading your app. CPI diagnoses the quality of everything that happens before users hit “install.”
While it’s important to understand everything you can about app performance, it’s also important to ensure that your marketing and branding efforts are up to par. CPI informs you whether or not your messaging in ad copy and your app marketplace listings resonates with your intended audience.
If you have a high cost per install, that may indicate that your marketing materials aren’t connecting with audiences. Companies in this situation may have a large volume of people clicking on an ad but a low percentage of those people downloading the app.
This information points app marketers to their application listing. There may not be enough compelling information to drive downloads. In this case, app marketers must ensure that they include all of the following information in an app listing:
- Full app name
- Thorough app description
- Screenshot of in-app experience
- Videos of in-app experience
- A list of features
- An app logo and graphics
By filling your listing with honest, compelling information about your app, your team will likely increase the amount of downloads and lower the overall CPI.
CPI Marketing Assists App Marketers
While CPI marketing doesn’t give insight into app performance, it has the power to validate the quality of a mobile app marketing campaign. By showcasing whether your app is getting downloads, CPI is helping marketers understand if their messaging is compelling people to become app users.