Mobile marketing · Mobile advertising

Besides the $3.00 for CPI (cost-per-install), are there more costs associated with a CPI ad budget?

Bervick II Independent Entertainment Professional

July 31st, 2016

I am preparing a CPI budget and I'm curious to find out if there are other costs associated with the going CPI rate of $3.00. I'm uncertain if $3.00 includes the rate of placing the ad or not. If there is an associated cost, would $5.00 CPI be safe to cover all necessary cost?

Colin Behr VP, Business Development at Vungle

August 1st, 2016

As per other answers in this thread, I can say that it depends. Not to avoid answering the question, but it is very dependent upon the channel(s) that you want to use. 

As one of the people on this thread has already alluded to - CPI is only the end cost per install that you end up paying. There are channels, like TV advertising where you will pay to reach a (relatively) specific audience and your spend will back out to an effective CPI (eCPI). 

I'll attempt to answer your question, but give you a warning - the CPI is far less important than what you pay vs. what you get from a user engagement perspective. Advertisers usually refer to this as the ROI or ROAS (return on ad spend). The savviest of advertisers are therefore not so much focused on the CPI but rather their percentage of gross revenues that goes towards ad spend. For those who aren't making immediate IAP (in-app purchase) revenues, they still translate the value of in-app actions and engagement to dollar values. 

By and large, you'll find that the CPI landscape on the in-app advertising side looks something like this:

Walled Gardens:
Facebook, Twitter and other social networks tend to very tightly control their audiences. They don't want you to bid in realtime on users and therefore ask you to enter your target CPI. Facebook also recently introduced actual CPA bidding - with CPI being a form of CPA this allows you to actually bid the CPI that you're prepared to pay. This may seem transparent, but the hidden cost is attribution, or who they claim the install. Facebook for example will claim any install that occurs when one of their users views an ad - considering that it's easy to scroll through endless ads in the feeds you might not consider this to be far. Unfortunately if you want FB users you have no choice. 

DSPs (Demand Side Platforms):
Most exchanges (like Mopub) don't necessarily provide a good interface in order to optimize for buying on a CPI basis, particularly if you intend to optimize towards post install CPA or CPE (cost per engagement) goals. DSPs will place these buys for you and optimize towards your goals.
The challenge here is that exchanges allow DSPs to bid in realtime, which requires a bid to be placed as CPM, rather than CPI. The DSP will therefore optimize to hit your CPI goal, but not necessarily guarantee to hit your goals. Even if they agree to take the risk to hit your CPI goals they probably won't guarantee to hit your CPA goals, leaving you to hold the bag if it doesn't work out. It's important therefore to understand what model they work on and how much you will likely need to invest in order to understand how well they perform. 

Ad networks try to more manually match demand and supply and often perform a greater array of peripheral services in order to help you optimize and hit your goals. There are plenty of CPI networks out there, but very few of them will optimize to hit your post install goals. 

This is by no means an exhaustive overview, but feel free to contact me if you need more information.

William Agush Founder and CEO at Shuttersong Incorporated

July 31st, 2016

Where are you running these campaigns? I can tell you from experience that not all CPI is created (or performs) equally. I can tell you that it's very hard to build a sustainable business paying for installs. More importantly the real cost of a CPI campaign is what happens after the install. With 50% or more of installs abandoning or uninstalling your app once they try it the true cost is at least 2x the install cost, so if you're paying $3.00 it's really at least $6.00. Some of this is offset by organic installs but I ignore that.

Nancy Fulton

July 31st, 2016

I've had really (really) good luck using video ads on facebook that drive people to a website that has links that let people install my apps. I pay .02-.05 to run the 15 second to 1 minute ads . . . and the conversion is good. Running video ads on Youtube also works. I have found that Cost Per Install ads don't work very well at all. You pay a great deal for the install and folks tend not to stick around.  

I would add that you should probably set up your website for your app, then try driving some traffic to it for a couple of days, to make sure you know how much it costs to click a Get App button.  You can (in the short term) make that link take people to a "give us your email and we'll let you know when our app is available" page.  But you need to fine tune that pitch (I think) before you can really know how much your ads will cost per install. 

Christoph Ranaweera validate early, pivot and kill fast instead of feeding a zombie

July 31st, 2016

it's in the end what you pay for the advertising. if you run the campaigns directly with networks like apploving, chartboost and so on you will get the cost and installs and get the CPI. How how it will be depends on the marketability. (How good is your marketing message and how easy is your product to sell = to make people click to install)

Additionally to CPI there is as well an eCPI. If you are lucky people talk about your app and you get install you don't pay for. 
This will depend on how good your app is. But this is all an additional complex topic 

Josh Levitan Product & Marketing Guy

July 31st, 2016

The CPI figure is just the cost per install wherever you're running your ads (e.g. Facebook Mobile).  If you're running the ads yourself, there's no additional cost.  If you're planning on doing that through an agency, you'd need to factor their fee on top of that.

As William Agush mentioned, that CPI figure is just the cost to get an install.  It is not the cost for a user to actually open up your app or to engage in a useful action.  Those costs will be higher.

You'll also want to model out your retention and whatever downstream actions (like monetization or watching ads) to make sure that you're spending your budget sensibly.

It also (generally) becomes harder to hit your CPI targets at scale.

Steve Skura, MBA Looking for a social media manager for my magazine startup.

May 9th, 2018

Advertising is expensive. My advice would be to mine the customer data you already have, survey your customers and then clearly identify your target customer in order to fully customize your advertisement and reach those customers with the most potential to utilize your app and hopefully spend money.

In a nutshell... many apps have say 100,000 users. However, they may have less than 1,000 users that are actually active using the app. The goal would be to target those 1,000 active users and spend $3K in advertising RATHER than not customizing ad campaigns and having to spend $300k to reach 100,000 and 1,000 active. This is the goal of most startups in today's economy. Minimize ad costs and maximize the number of active users. This is why accurate persona's are so important.