What is CPI? Calculating Cost Per Install

PPC PPC Basics

If you are interested in mobile advertising or application development, you may have heard the term “Cost Per Install” or CPI. CPI is important to know if you want to market or sell a mobile app effectively.

To make this space more transparent and accessible, we’ve broken down this important term to help you make the most of your application ideas and marketing budget. Keep reading to learn everything you need to know about the Cost Per Install.

What is Cost-per install (CPI)?

Cost Per Install is the price paid by an application developer to an advertiser for every user that installs their app due to the advertiser’s marketing. CPI is different from “Cost Per Click (CPC)”, the price paid for every user who clicks on an advertisement.

Cost-per-click can measure brand awareness and see how many users look at an app. However, what matters is how many people have downloaded or used an app, which is the CPI metric’s strength.

To track CPI, developers must set up monitoring in their app. The app can be monitored through a mobile measurement platform (MMP) such as Adjust, AppsFlyer, or Kochava. These platforms will allow developers to see how many people have installed their app and what actions they took after installation.

How to calculate Cost-per install?

You can calculate CPI by dividing the cost of your marketing campaign or ad spend by the number of times the app has been installed.

CPI = Ad spend/Total installs from campaign

If, for instance, you spend $500 on your mobile app campaign and get 150 installs, your CPI will be $500 divided by 150.

CPI = $500/150= $3.33

Effective Cost Per Install (eCPI)

CPI differs from effective “Cost Per Install (eCPI)”. eCPI is calculated after the end of the marketing campaign, while CPI is a projection or estimate of how things will proceed.

Cost Per Install (CPI) is the price paid by an application developer to an advertiser for every user that installs their app due to the advertiser's marketing.

Who Should Use CPI?

Advertisers and developers most commonly use Cost Per Install. Advertisers want to know how much it costs to acquire a new user, and developers want to track the return on investment (ROI) for their marketing efforts.

If you are an app developer, the Cost Per Install should be one of your key performance indicators (KPIs). You can use CPI to track the effectiveness of your marketing campaigns and make informed decisions about where to allocate your marketing budget.

It is an important metric to evaluate the marketing campaign’s effectiveness to gain exposure for your app, and it is far more effective than cost-per-click.

Application marketing teams also use Cost Per Install to evaluate the performance of their marketing campaigns but also in discussions with application developers. CPI lets web developers know exactly what they will get for each dollar they spend on marketing.

Cost-per install is also a good metric for those looking to sell an app. By understanding the cost to acquire a new user, they can more accurately assess the lifetime value of a customer and price their app.

Why Is CPI Important?

CPI is an essential metric for application developers. It doesn’t matter how great your application is if no one uses it.

You can use CPI to evaluate your marketing campaigns. You can adjust your budget and strategy to get the most bang for your buck by understanding how much it costs to acquire a new user.

CPI can also help you focus on where you spend your marketing budget. If you have multiple campaigns running for an app, you can use CPI to measure each campaign’s effectiveness.

CPI will tell you which form of messaging resonates with your prospective users. Knowing which messaging is the most effective will tell you where you should spend more of your money in the future.

That being said, CPI is just one metric you can use to evaluate your marketing strategy. Many other metrics are useful and should be used in collaboration with CPI to evaluate your marketing program.

What is a good CPI?

The average CPI varies across countries, platforms, and types of applications. The global average CPI in 2021 was $2.24.

CPI in Different Countries

CPI can undergo huge swings depending on where you are in the world. A country’s size, GDP, and market competition all play a role in the cost of acquiring a new user.

Some of the most expensive countries to acquire a new user are:

– Switzerland ($4.32)

– Norway ($3.93)

– Sweden ($3.77)

– Denmark ($3.71)

– Austria ($3.54)

CPI for Apple vs. Android

CPI tends to be higher for Apple users than for Android. Since Apple is a more exclusive product, the users tend to be wealthier, and competition is fiercer. The current average CPI for an Apple user is $3.60. The current average CPI for Android is $1.20. It is essential to keep this in mind when running marketing campaigns for apps on iOS and Android.

Main Takeaways

Cost Per Install (CPI) is one of the most critical metrics for evaluating application marketing campaigns. It is a good indicator of the return on investment for marketing efforts.

CPI can vary wildly depending on the country, platform, and type of app.

When used correctly, CPI is a good metric for focusing marketing efforts and allocating budget. Take the time to research marketing and the necessities of app-building to be successful with your project.