The mobile app marketing industry economy is powered by several business models. From one-off payments to costs-per-metric, there is a number of models for mobile app marketers to choose from upon launching an app’s advertising campaign. CPI, or Cost Per Install, is one of them, and while on the surface the name makes it sound deceptively simple (Cost-Per-Install means you pay when someone installs your app, right?), there is actually plenty of nuance to it. As the app market grows, app marketers are in a tough ever-increasing competition for app users’ attention and ultimately their wallets. Therefore to meet their marketing goals, marketers may utilize all these models.
This guide will help you understand the ins and outs of the CPI payout model in particular, what CPI advertising and CPI marketing are, and how they compare to other metrics. As well as how much does it cost to drive app installs via Facebook, and more.
If you aren’t familiar with CPI advertising or CPI marketing term, let’s us explain. A mobile app advertising campaign can be built around a number of different models, each implies charging the app marketer when a particular action takes place. If the entire advertisting campaign is based around charging per an app install, another words it’s CPI-based, marketers refer to it as CPI marketing.
First things first, let’s start with providing the set of stats that draw the picture for apps Cost Per Install in various countries and mobile platforms.
Key Average Cost Per Install Statistics:
- Average mobile app CPI – $0.93 (APAC), $1.03 (EMEA), $0.34 (Latin America), $5.28 (North America)
- iOS app CPI Globally – $3.6
- Android app CPI Globally (Google Play market) – $1.22
- iOS Games CPI – $4.3
- Android Games CPI – $1.15
- Facebook Ads CPI (2019) – $1.04
Before diving into the specifics, it will certainly make sense to give a definition for what is Cost Per Install and how to calculate it.
Cost per install (aka CPI) – a definition and formula
Tubemogul, acquired and rebranded by Adobe in November of 2016, has about the best and most concise definition we could find, so here it is:
“CPI (Cost Per Install) campaigns are specific to mobile applications. In a Cost Per Install campaign, publishers place digital ads across a range of media in an effort to drive installation of the advertised application. The brand is charged a fixed or bid rate only when the application is installed.”
The formula for calculating Cost Per Install is quite simple, in fact, it’s implied in the name: Your total ad spends divided by a number of installs.
Now we’ve set our terms, let’s have a look at what a Cost Per Install campaign is and why it is important.
What is a CPI campaign and why is it important?
Cost Per Install is one of the many metrics by which app marketers measure their mobile app advertising budget. The advertiser only pays the ad network once the app is installed, instead of just the advert being viewed (known as the CPM, or cost-per-mille, model). This puts the onus on ad networks to place the advert in mobile apps and websites where conversion rates are high and to target the ad appropriately to the correct audience. This is a direct incentive for ad networks to optimize mobile app install campaigns as well as possible.
Given the higher value behind an app install over a simple viewing of the advert, costs per install are also significantly higher – in some places around $3, whereas CPM can vary wildly from $0.78 to $7.00 depending on the platform (iOS/Android) and the advert format (interstitials, banners etc).
Why is CPI a valid metric?
In May 2016 Fiksu, a major mobile marketing company stopped featuring CPI statistics in their core set of indexes. According to the company, “although it still has a role, CPI should no longer be the central metric to measure app marketing success.” The reasoning behind this is the increasing reports that the “app craze” is waning. People download fewer apps than before, and open even fewer; as such, a “mere” app install is no longer a good metric of whether your app is successful. This, coupled with the fact that the most successful apps are free to download and monetize via in-app transactions or eCommerce, also puts paid to this theory.
That being said, CPI is still more important than CPM if what you’re advertising is the app itself, and not an eCommerce product. It’s still a great metric for games, especially if you set the pay-out to trigger upon a certain achievement in the game which is far more indicative of user engagement than just downloading.
CPI providers have wisened up to the “end of the app craze” and there are plenty of ways of making the metric significant and of making CPI campaigns successful. Other metrics which you should consider alongside CPI are Cost Per Loyal User/Cost Per Engagement (the line between the definition of these two is becoming increasingly blurred) and Cost Per Sale (only triggers when a sale is made).
Mobile App User Acquisition Costs
When we take a broader look at what costs are associated with a mobile app marketing campaign, we see that in fact Cost Per Install is only one cost among others, such as Cost Per Registration, Cost Per Reservation, Cost Per Purchase, Cost Per in-app Purchase and finally Cost Per Subscription. In a nutshell, all these costs are associated with specific actions people take with apps, an app install is the initial one. Because at this stage mobile users don’t have to make any financial commitment, it’s the least expensive action app marketers want them to take.
The following graph presents the data aggregated by the Liftoff company, a complete mobile app marketing platform, from app marketing campaigns ran for more than 1,000 apps (both iOS and Android) from the period from September of 2019 to August 2020. It covers CPI rates for three major actions app marketers expect from mobile app users to take – install, purchase or subscribe to the app. The data pool represents four major world regions – APAC (stands for Asia-Pacific countries), EMEA (stands for Europe, Middle East, and Africa), Latin America, and North America.
Average Mobile App User Acquisition Costs, by action, by region
According to the data from the mobile app marketing platform Liftoff, the average cost per install for iOS apps is $3.6 and $1.22 for Android apps.
Several years ago Google and Apple’s mobile app platforms formed a duopoly that ever since dictates a room temperature for any costs associated with mobile apps marketing and advertising. This close to 300% average CPI difference speaks to the fact that thanks to being Open Source, Android has managed to conquer a much bigger mobile devices market share, and hence there is less competition for mobile users on the Android side. Also, people who use iOS devices tend to spend more on apps and therefore app marketers are more inclined to fight for these people’s attention and so they rise iOS apps’ cost to install.
The most striking, of course, is the order of magnitude difference in CPI rates between an Android and iOS app install and either an in-app purchase or a product or service purchase through the app. When it comes to committing to purchasing anything via the apps, it understandably takes much more money to generate those actions, regardless of the mobile app platform.
Average mobile app Cost Per Action worldwide, by platform
Cost Per Install iOS vs. Android games, by genre
Now let’s stack together the data to compare Cost-Per-Install for iOS and Android games, using the Casual genre as an example. The overall difference between the iOS CPI for casual games and Android is pretty staggering, it’s $1.15 for Android versus $4.3 for iOS. This big gap can be attributed to the fact that the Android ecosystem has a much bigger reach than iOS, there are much more Android smartphone users out there than the iPhones, hence it’s easier to acquire users for your casual game on the Android side. Moving to the specific casual games genres, the Lifestyle one shows a much less dramatic difference, it’s $2 for Android CPI versus $2.96 for iOS Cost Per Install. The Puzzle category of Casual games is the brightest star on the chart, it brings a mind-blowing $4.53 for iOS CPI against only $1.11 for Android Cost Per Install. Finally, the Simulation category goes along the same lines, bringing $1.24 for Android CPI vs. $3.87 for its iOS counterpart.
Cost per install (CPI) of casual games worldwide March 2020 – February 2021, by genre and platform
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Facebook Ads Cost Per Install
One of the major sources to find new users for an app is social media. By now, all major social media companies provide advertising solutions, such as Snapchat Ads, Reddit Ads, Pinterest Ads, Twitter Ads, Google Ads, TikTok Ads that allow app marketers to drive installs for their apps. Unfortunately, at this point, no current and reliable data for the Cost Per Install on TikTok, Instagram, and others are available and Facebook Ads is the only platform we can analyze CPI rates for. So let’s take a look at how much does it take to get an app install via Facebook Ads.
The COVID-19 pandemic has been having a huge toll on the economy and one of the consequences of that toll is that it triggered chaos in the digital advertising industry. Many businesses were hit and significantly cut down on their costs, others vice versa – rase up grew substantially. In the light of all this, let’s compare CPI rates for Facebook Ads in 2019 versus 2020 to deduce an average CPI for each year and stack them together to analyze the impact.
First things first, the average Cost Per Install for Facebook Ads in 2019 was $1.04 and for 2020 that number was $3.26. Obviously, because of the pandemic, throughout 2020 the CPI was up and down remarkably. In March of 2020, the Cost Per Install was more than 3x of its value in 2019, $3.4 versus $0.75 and the same goes for April, May, and June. By July, when China got the pandemic under control and the US was trying to open up its economy, the gap between CPI numbers significantly shrunk to $1.5 in July of 2020 vs. $1 the same month a year before and further months continued on the same trajectory.
Facebook Ads Cost per install by month, January – September 2019 vs. 2020
How to choose a CPI network
There is a number of things you should look at when choosing your CPI campaign provider. A well-targeted CPI campaign will often be successful, but the devil is in the detail, so these are the things to look out for.
Do they work with ad networks, or have a set pool of apps that they can advertise in? The first has wider scope but the second – may bring a better targeting on the table, if those apps all belong to a particular category. This brings us to the niche.
Does the campaign provider specialize in generic mobile apps or games? Specific verticals? Once again this is about making a choice between the reach of your advertising and its precision, and the answer should be given by the characteristics of your mobile app.
If you have a free-to-download app that relies on in-app transactions to monetize, then a simple download by itself is no guarantee of return-on-investment. You want to ensure you pay advertisers only when the user they brought you actually provides value. Is it when they make their first purchase, when they’ve spent a certain amount of money, or when they’ve reached a particular level in your game? The platform you choose should be able to offer different metrics to track payouts.
Naturally, you want to pay the right price for where and to who you are advertising. Most platforms have the technology to track market averages and bid at levels set by you, but there may well be a commission on top of that for the platform, the ad network, or the process. It’s not something you can avoid, but you should at least know what you’ll be expected to pay in order to budget effectively.
As of today CPI metric has definitely lost its initial appeal to mobile app marketers but it is still a part of the app marketing efforts equation. With CPI campaigns app marketers may achieve several goals. Such as growing the number of users their apps have, boosting an app’s ranking on the App Store / Google Play market to secure it higher visibility, increase the number of users for their apps while App Store Optimization they’ve been applying hasn’t impacted their native user acquisition yet and more.
The most popular social networks provide highly effective advertising platforms for mobile app marketers to leverage their extensive user profile data sets. As a metric Cost Per Install should always be measured and optimized in conjunction with the Cost Per Action model that measures app marketers’ expenses to achieve specific actions for their apps – in-app purchase, registration, subscription, and more.