In the world of mobile growth, every marketer has a unique goal. From installs to actions, app marketers are measuring success differently. For many, especially in the e-commerce or fintech spaces, a simple install isn’t enough – they need users to take an action such as setting up direct deposit or making a first purchase. How you measure success will determine which metrics you pay attention to in your mobile campaigns. In this article, we’re going to explore two popular metrics: cost per action (CPA) vs cost per install (CPI).
In the world of mobile user acquisition, CPI is a pricing model in which app advertisers pay when a user installs the app based on an ad. CPI can vary based on everything from the device, to the location, and the ad network.
- CPI = total ad spend / total installs
Why is CPI important?
CPI is an important part of understanding the success of your campaigns and where to allocate more (or less) budget. However, that’s true of most metrics. However, comparing your average CPI to that of other apps in your niche can give you important intel. Additionally, CPI is often used for free apps where campaigns focus on getting as many users as possible to deliver in-app ad impressions, knowing that only a fraction will convert to paying users. For instance, CPI is popular for free games that rely on ads and in-app purchases to generate revenue.
When an install isn’t enough, mobile app marketers base their campaigns on CPA. In this pricing model, advertisers only pay when a user takes a specific action. This is usually tied to a type of conversion, whether that’s simply registering for the app or taking the next step to link a bank account.
- CPA = total ad spend / total actions taken
Why is CPA important?
CPA campaigns allow app marketers to control ad costs for more specific marketing objectives. This is valuable not only for user acquisition campaigns but for retention and re-engagement. For instance, an e-commerce app may run a campaign to target users who have not opened an app in a while, offering a sale on items they might like. By running a CPA campaign, you can assure you only pay when that user makes a purchase – or takes whatever action it is you desire. And, of course, by tracking CPA marketers are able to ensure they are investing in cost-effective channels and measure the overall success of their campaigns. CPA also has the benefit of helping marketers determine which users are most valuable – and where to find them.
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