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CPI Calculator, Formula: Cost Per Install Guide

If you're in the app business, you know that cost per install (CPI) is a crucial metric. But what exactly is CPI? And how do you calculate it?

Cost Per Install Formula

Cost Per Install Formula

CPI is the cost of acquiring a single paying customer, and it can be calculated by dividing your total marketing spend by the number of paying customers you acquired. For example, if you spent $100 on marketing and acquired 10 paying customers, your CPI would be $10.

With the power of advertising and analytics, you'll find that more and more people will start to download your app. The cost per install (CPI) advertising pricing model is especially popular among app marketers because of how effective it is. But what is CPI anyway, and how does it compare to any other form of advertising and ad pricing models?

Keep reading and learn more about the cost per install rate.

What Is Cost per Install (CPI) Exactly?

The point of a CPI ad is to make as many people as possible install your app. This can be done in many ways, but the main goal is to entice online users and make them click on the ad and then be brought to the page for your app. Only then will the users have the chance to see what your app is all about, and they can decide whether or not they want to install it.

However, getting a person to install an app is harder than you might expect. Suppose you pay to run an ad. That ad will generate impressions. An impression is simply a measurement of how many times that ad gets shown on a particular web page.

Keep in mind that an impression is not how many times a real user sees the ad but instead how many times the ad appears on web space. However, more impressions make it easier for more people to see the ad because the ad is taking up more ad space more often.

The Process to Get to a User Install

If an online user sees your ad, he may be interested in what the ad has to say, so he will click on the ad. This is known as a user engagement or simply a click and it is quite important for the success of your brand. This first engagement means that the online user is at least somewhat interested in what your app is all about, and the first step is almost always the hardest.

As soon as a user clicks on your ad, they will appear on the landing page for your app. From there, the user can read through whatever information might be on the page. This information is very important because if it is not catchy enough, the user may end up clicking away.

Once the user is enticed enough by what your app has to offer, he may finally click the install button for the app. This is where the cost per install rate comes into play. The formula behind CPI advertising is not complicated at all: it involves dividing the amount of money you spend on advertising by the number of mobile app installs.

The result will tell you how much money you are spending per user who installs your app. But why is this rate so important in the first place and why is it worth understanding CPI?

Why Does CPI Advertising Matter So Much for Your Brand?

CPI advertising is important for your brand for several reasons and one of those reasons has to do with keeping track of important analytics. CPI can help you keep track of how many people are installing your app in comparison to those who only see the ad for your app without even clicking on it. The whole process of getting a person to see the ad, click on the ad, and then install your app can tell you plenty of information about what parts need to be streamlined in some way.

For example, suppose the analytics tell you that a large number of people have ended up clicking on your ad for your app. However, once those people reach the landing page for your app, they don't end up installing it. This would keep your CPI quite low and while it would save you money, you wouldn't be getting many installs which, of course, is what you're after.

Even so, the ad analytics will tell you that something is amiss at the point of the landing page. Something is causing your potential customers to click away without installing the app. In this case, CPI advertising can help you refine your app and the app landing page so that it is more appealing to your potential customers.

How CPI Advertising Can Improve Your Brand

You might only need to change a few visual elements such as the color scheme, the font, or the layout of the landing page. With a few tweaks, you should notice a change in the number of people who click on your ads without installing your app.

With enough refining, the number of people who do end up installing your app should increase. This, of course, is essential if you are trying to get as many mobile app installs as possible. App installs are important in their own right for a variety of reasons.

By having more app installs, more people will know about your brand. More than that, people might like your brand and be interested in seeing what other content you plan on putting out in the future. If your app has paid aspects, then this means you will make more money as more people install your app.

This is important because you will need to make back the money you spend on advertising, otherwise, you'll end up losing out on your advertising investment. But what other benefits can you see from CPI advertising?

What Is a Good Result From CPI Advertising?

A good result of CPI advertising is that you'll be able to plan a realistic budget for your advertising endeavors. You will find that the CPI ad rates will differ according to what platform you're marketing your app on. Some platforms might only have a CPI rate that is a few cents while others may have a rate that is several dollars.

The CPI rate, of course, can determine how many ads you can put out for your app and for how long. If the CPI rate is very expensive for a certain platform, you may only be able to run ads for a short period. Even so, the platforms with the more expensive CPI rates tend to be those that are more popular.

As a result, more people will see your ad even if it is only around for a short time. On the other hand, platforms that have lower CPI rates can save you money. This means that you can run your ads for a longer period and still get plenty of clicks and views.

But depending on the popularity of the platform, you may still not have the chance to get as many views as when advertising on a more popular platform. Whatever the case, CPI rates can help you determine how much you're going to spend on advertising. If you are a relatively new brand and don't have a lot of money to spend on advertising, you will want to keep yourself from spending too much money on ads.

Budgeting and Brand Awareness

Keep in mind that the type of ad you choose will also change how much you spend. This is because some ad types such as video ads are more expensive than others such as banner ads or pop-up ads. Once you sort out all this information, you will find that CPI advertising can save you money in the long run because it will allow you to plan how much money you plan on spending with its simple formula.

Another good result of CPI advertising is increased brand awareness. Brand awareness is all about getting people to realize that your brand exists. If no one knows that your brand or app exists, they're going to have a hard time finding them. Even if people don't click on your ads at first, they will still see your ads at some point and keep them in mind.

At a later time, the same people may see your ad again and then decide to click on it. If they like what they see, they might even end up installing your app. This, of course, would improve your CPI rating and it would also improve your brand's success.

The more people who know about your brand, the better, because that means there is a larger potential to obtain more customers in the future. But what should you do if your CPI ads aren't doing so well?

How to Achieve a Better Result With CPI Advertising

If you want to go about improving CPI ads, you will need to go over a few important factors. For example, if people are seeing your ads but no one is clicking on them, this is obviously a big problem. This means that no one is even arriving at your app's landing page to see what it's all about.

This also means that there is something wrong with your ad. Something about it is deterring people from clicking on it. Usually, the problem is something simple such as the design of the ad.

If the ad has an unattractive color scheme, a font that is hard to read, and so on, people will not want to click on it. More than that, if your ad isn't catchy, there will be no reason for people to click on it either. An ad has to be short and concise while being interesting at the same time.

It can be difficult to figure out how to do this at first, but once you get the hang of it, it will be much easier. A good trick is to get into the headspace of your potential customers and understand exactly what they want. This will help you adjust the ads so that they reflect the users' internal thoughts and wants.

Your Target Audience

Targeting the right audience is important as well. If your app is a type of medieval mobile game, it wouldn't make sense to target your ads at an audience that isn't interested in playing mobile games. Even with all the ads in the world, the wrong audience isn't going to be interested.

A good way to fix this is to understand your demographic. How old is your target audience for your brand and what kind of apps do they typically like and install? Once you figure out this information, you can apply it to your ads.

If you direct your ads toward the ideal target audience, you will find that you will not only get more ad clicks but also more app installs. This, of course, is exactly what you want if you're looking to improve your CPI ads and rake in more business success. Once more people know about your brand and apps, it will be easier than ever to bring in new customers.

What You Need to Know About Cost per Install Advertising

Cost per install (CPI) advertising is very helpful if you're trying to get more people to install your app. It can help you determine how many people are seeing your ads, clicking on those ads, and then installing your app. It can also help you figure out your advertising budget.