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Why the Cost Per Install (CPI) Model is Still Relevant for Mobile Apps

Why the Cost Per Install (CPI) Model is Still Relevant for Mobile Apps

Written by enCOMPASS Agency

Digital ad campaigns can serve a number of different purposes. Often, the end goal is to send traffic to your website, where you can convert leads into paying customers. In other cases, ad campaigns can be designed to increase downloads for an ebook, or subscriptions for an email newsletter.

And then there are mobile apps. App designers are naturally eager to see their programs installed on mobile phones and tablets. One way to make that happen is by running a digital ad campaign, specifically using the cost per install (CPI) pricing model. Though not as flashy as it once was, we believe the CPI model is still a very viable option for any campaign that’s centered on app installation. Allow us to tell you why.

What is the CPI Model?

CPI refers to a pricing model that’s used in digital campaigns, specifically those designed to increase app installations. With this tactic, the advertiser pays only when a user installs their app.

Since the advertiser only pays when they get installations, it’s in the best interests of ad publishers and ad networks to display the ads to a carefully targeted audience, in places that tend to yield high conversion rates.

For the advertiser, it’s worth noting that the rate of CPI tends to be much higher than other pricing models; you could pay as much as $3 a pop. (The average CPI cost, worldwide, is around $2.25.) But that’s because the action is highly specific. And again, you’re only paying when you actually achieve your goal of getting your app installed.

Is CPI Effective?

Some app developers are skeptical about whether CPI is really worthwhile. The rationale is simple: Just getting users to install an app isn’t going to pay the bills. To reap a profit, ad developers need users not only to install the app but to engage with it in some fashion (e.g., watching ads or making purchases within the app).

The big exception here is with paid apps. If the user has to shell out a few bucks to install the app, then the ad developer generates some revenues right off the bat, even if the user never engages with that app again. In fact, the user can uninstall the app almost immediately and it won’t matter much to the ad developer.

But about nine out of 10 apps are available for free, which means developers only profit when their users perform specific in-app actions. Even so, we would argue that CPI represents a great way of introducing users to the app, which gets them one step closer to taking those specific in-app actions.

Considering the Alternatives

App developers should be aware that CPI is not the only pricing model available to them. With that said, we think that a closer look at the competition will reveal just how valuable CPI really is.

For example, you could opt for cost per thousand (CPM), paying a fee for every thousand impressions your ad receives. Or, you could choose cost per click (CPC), where you’ll pay every time your ad gets a click. Both of these models have their place, perhaps, but neither of them gets you as close to your end goal as CPI. With CPI, at least people are downloading the app, something that you can’t guarantee with CPM or CPC.

On the flipside, you can consider using the cost per action (CPA) approach, which means you’ll only pay when users perform one of those specific in-app actions, like viewing ads. While this is an even more laser-focused approach than CPI, it’s also extraordinarily expensive, and will eat through your ad budget pretty quickly.

CPI represents a good middle ground, allowing you to actually expose people to your app without paying the high costs associated with more specific in-app actions. Of course, having a well-designed app with good content, combined with an ad campaign that accurately conveys what your app does, will increase the likelihood of real, ongoing engagement.

Finally, we’ll note that you can also control some of the costs of your CPI campaign by ensuring you select the right ad network. This can vary depending on your app and your target audience, but as a general guideline, the top CPI networks right now tend to be Google Ads, Facebook Ads, and Twitter Ads. You might also consider Snapchat Ads, Pinterest Ads Pins, and others.

Questions About CPI?

If you’re designing an ad campaign with the intention of boosting mobile app downloads, including the CPI model is well worth considering as part of your overall marketing mix. Our digital marketing consultants would love to advise further, and to help you determine the best pricing model for achieving your goals. To talk to someone from enCOMPASS Agency, feel free to drop us a line at any time.