CPI CPI CPI. You’ve probably seen it all over the internet, you’ve probably heard us banging on all about it and are eager to know what the fuss is. CPI, also known as Cost per Install, is an extremely popular pricing model used more and more frequently in digital advertising. Why? As the use of smartphones increase every day, so too, do the use of apps, thus meaning CPI is used as means as a pricing model more and more each day. How does it work? The user installs then opens an app, and that’s how a new user is acquired, it’s as easy as that!
But, what’s the purpose of CPI? What benefits does it bring?
For Affiliates, its an excellent way of bringing in revenue and conversions.
For Advertisers, its a way to bring users and customers to the product.
And how do we know what type of users we hit, what type of traffic we take in, where our key market lies, what our user does in the app? Using KPIs.
Yes CPI, KPI, it can all get a bit confusing. Key Performance Indicators, aka KPIs, are one of the most useful and successful performance tools in the game. KPIs are used to help track how well ads are doing and helps measure business growth, and are even more successful when used in conjunction with CPI campaigns. They are able to measure new customer acquisition, status of customers, turnover, profitability etc.
First things first, how are we able to measure KPIs?
Tracking allows us to find out how our ads are performing according to KPIs. Not only does tracking help you determine user characteristics, it also gives you key information, useful in creating and determining the next campaign. Successful Cost Per Install ad campaigns require deep knowledge of user quality. The first instinct of many developers who are exploring user acquisition campaigns is to track installs on a Cost Per Install (CPIS) basis, and to design an efficient system for how user quality will be measured, harvesting the best ROI possible. Currently, we’re tracking with AppsFlyer, O Tune, Kochava and Flurry. As we track along with an SDK, Software Development Kit, it means we are able to separate groups into various characteristics such as time of install, customer life etc.
So, how can using KPIs within CPI campaigns make them more effective?
1. They measure customer retention rate
Retention rate is when the advertiser requires you to reach and ensure that a percentage of the user continues using the app, measuring the company’s ability to retain customers. This is calculated by dividing the total number of customers retained, by the total number of customers, over a given time period.
How? With mobusi, we only provide contextual, relevant ads. That is to say, we are only likely to advertise ads and drive traffic In-App in an add suited to the user, so that the user is more likely to click on. Therefore, not only is the user more likely to click on the product we are advertising, but as it is relevant to their likes, it’s more likely that they will keep using the app.
2. We get more insight into Life Time Value (LTV)
LTV is used to measure the value of a user in his or her whole period with the app. There’s no point paying more for a customer who’ll give you less back in revenue. So, KPIs help us get the most out of our campaigns and make them more profitable. KPIs allow us to measure the quality of the customer and how they’re likely to act within the app. Measuring this metric can be useful for noticing at what point your users are most valuable, which is great when paired up with user retention rate. As user information is tracked within the app, we can gain a whole range of useful information. In our CPI campaigns, we measure what the customer gets up to in-app, all of their activity to give us a better idea of our customer base and gives us improved insights on how to act in the future.
3. We understand the ROI of a campaign
The core aim of Cost per Install (CPI) campaigns is to bring down per install cost and maximize on return on investment (ROI). As using CPI creates money for app developers, it then, in turn generates more money for app developers to keep on producing new apps for us to promote and monetize. Quality means we’re getting richer on an ongoing cycle. Affiliate = happy, app developer = happy. Unlike other forms of advertising, app-install campaign ROI is easy to figure out—because app-install conversions are easy to measure. With a mobile advertising partner like us, you can leverage install data in ways that boost your ROI over the long term. You’ll have the capacity to not only track downloads, but more importantly measure open and active users. You’ll be able to utilize that data to optimize campaigns over the long term, so that your ROI improves as you go.
4. We are able to measure In-App purchases.
This metric goes hand in hand with LTV however it is equally worth measuring. The aim here isn’t only to make that first sale and downloading the app but to generate a continuous stream of revenue from your best customers. Therefore In-App purchases must be reviewed on a continuous basis and even segmented according to time. These monetary transactions are best combined with averages per user and over time which then are compared for different traffic sources.
So, if you’re thinking about launching a campaign and wondering which pricing model to go for: go CPI. It enables a whole host of attributes which can be tracked and explored easily, thus improving the quality of your campaigns and results. Get in touch for more details!