There are several business models that serve as a foundation for mobile app advertising. Each model defines for what specific performance or action an ad company charges advertisers. The most popular models are CPM (cost-per-mile), CPC (cost-per-click), CPI (cost-per-install) and CPA (cost-per-action).
Among these models, CPI and CPA are the most efficient ones for app marketers user acquisition efforts. They allow brands to measure actual ROI (return-of-investment) for a budget they allocate to advertise their apps. With a proper ad campaign data analysis, app installs ads allow app marketers to acquire high quality users and expand their app’s user base.
Since the dawn of both major mobile app ecosystems – iOS and Android – mobile user acquisition has been a challenge for app developers and brands. App stores alone weren’t sufficient to meet app developers needs in acquiring new app users, primarily because of the app discoverability problem. To meet this demand, co-called, Pay Per Install networks were launched that allowed marketers to buy app installs ads in bulk.
There are dozens of such networks that offer app marketers a technical platform to generate mobile app installs. The efficiency of these networks depends on their reach, ad formats and the number of different targeting options they support. In size such networks range from giants like Facebook, Google, Twitter that offer the best targeting options to smaller players that compete in CPI costs, better customer support or better reach in specific geographies.
Because of the overwhelming success of Facebook Ads that helped the company to generate the bulk of its revenue on mobile, other companies picked up the trend fairly quickly. The first one who followed was Twitter, with Twitter ads back in 2012, Pinterest with Pinterest for Business in 2014 and finally Snapchat joined the app install race the same 2014. The most recent addition to this family was TikTok in 2019 with is advertising platform for video ads.
All these platforms leverage their multi-million user base profile data to target app install ads like other advertising platforms simply aren’t capable.
Now the question is – how much do app marketers pay for a mobile app install on various app install ad platforms, as well as on Facebook? The following table presents CPI data points for iOS and Android for US app market in March of 2020.
An average app user acquisition cost
Meanwhile, according to BusinessInsider data, mobile app install advertising revenue jumped from $3.6 billion in 2014 to $4.7 in 2015. Also Business Insider Intelligence data reveals estimates for this and previous years – in 2018 app install advertising revenue reached $6.7 billion and in 2019 – $7.
Mobile App Install Advertising Revenue (US), in billions
Source: Business Insider
Of course today an app install and user acquisition are no longer the only app marketers concerns. App re-targeting or reengagement campaigns are increasingly common on app advertising platforms. One of reasons for the initial drive to get mobile app installs was to achieve high ranking on app stores with so-called burst campaigns.
Top App Install Ad Platforms
- AdColony - The In-App Marketplace for Brands
- Zoomd - Know More, Do More
- Jampp - Unlock new growth
- ironSource - Connecting people with apps
- Bidease - #1 DSP for mobile app marketers
The idea of a burst campaign was simple – generate a big number of downloads within a short period of time and signal an app store algorithm that the app needs to be ranked high on a chart. As time went by, both Apple and Google became smarter about their ranking algorithms and so burst campaign became way less effective. It forced app marketers to change their app marketing strategy and ultimately they began to pay more attention to mobile app users engagement to retain them and counteract a mobile churn.
Below you can see the list of major networks and platforms that offer app installs – some of them work on a CPI model and others use a CPC or CPM based trading approach but with the focus on delivering app installs and users.