The CPI, or Cost per Install, refers to a pre-agreed upon price that an advertiser will pay to a publisher for every user who installs their app directly as a result of an advertisement served by the publisher. It is important to note that this term is sometimes confused with eCPI, or effective CPI, which is the actual cost per install that an advertiser incurs as they receive installs in real-time or after the campaign has concluded.
For instance, suppose an advertiser allocates a marketing budget of $10,000 to a publisher, which results in 5,000 installs. In this scenario, the eCPI for this campaign would be $2. Occasionally, media outlets will optimize their campaigns based on an eCPI objective. This means that before the campaign begins, the advertiser and publisher agree to a target eCPI and work towards optimizing the campaign to achieve this objective.
However, it is important to note that self-reporting networks, such as Facebook, Google, and Snap, charge advertisers based on CPM or cost per mille, which refers to the price per 1,000 impressions viewed. These networks optimize their campaigns towards eCPI or the advertiser’s maximum bid levels, while charging advertisers based on CPM. Consequently, their eCPI may differ from the eCPI calculated by the attribution provider since an SRN charges based on engagement, regardless of whether it was attributed for the last touch or not.
To calculate the Cost Per Install (CPI) for your mobile app, you need to divide your total ad spend for a specific time period by the number of new installs generated during that same period. The resulting figure is your CPI.
For instance, if you invested $500 in ads for your app and generated 200 new installs during the campaign, your CPI would be $2.50.
Formula: CPI = Ad spend / Number of new installs
Example: CPI = $500 / 200 = $2.50
Therefore, your Cost Per Install for this campaign would be $2.50.
The calculation of Cost Per Install (CPI) is affected by various factors that determine the price an advertiser pays to a publisher for every new install resulting from an ad. Here’s a detailed explanation of these factors:
Country or Region: The geographical location of the user plays a crucial role in determining the CPI. The socio-economic standards of a region can influence the price an advertiser pays for a CPI, with more affluent countries resulting in higher value users and therefore, higher CPIs. As an example, the average CPI in North America is $5.30 compared to LATAM, where it is $0.30.
Channel: Different channels offer varying services and popularity and thus, different CPI costs. Social media channels like Facebook and Twitter, which cater to larger audiences, can charge higher CPIs, though they need to balance audience size with the CPI. On the other hand, niche channels with targeted audiences can demand higher CPIs despite their smaller scale.
App Vertical/Genre: CPI can vary significantly across verticals and genres within the same vertical. For instance, hyper-casual games usually have a CPI of $1 or less, whereas mid-core and hardcore games can have up to five times that CPI.
Cost of Ad Unit: The CPI cost can also depend on the ad unit’s value, with more prominent ad inventory commanding higher prices than remnant inventory that advertisers cannot sell.
Android vs. Apple: The difference between iOS and Android platforms is another significant factor affecting CPI. For the same reasons as geolocation, iOS users tend to spend more than Android users on average. Regions with a higher GDP, such as North America, Japan, and Europe, tend to have more iOS users, while Android has a greater presence in regions such as LATAM, India, and Southeast Asia. For example, the average CPI for Android is $1.20, while that for iOS is triple at $3.60. Within different gaming genres, there is also a significant CPI gap. For example, puzzle games in Japan have a CPI of $1.77 on Android compared to $3.69 on iOS. Action games range from $2.01 on Android to $3.96 on iOS, while educational games are $1.09 on Android and $3.04 on iOS.