CPI (Cost per Install) is fast becoming popular. Most people use apps every day to perform various activities. Apps are now part of almost everything in our lives, and advertisers have – correctly so –started to take notice. Just as with a CPA campaign model, CPI downloads can be tracked so the client only pays when the user performs a specific action. However the way an advertiser approaches CPI differs from the way they perceive CPA.
Bear in mind that the definitions of both CPA and CPI are always evolving, but for now we’ll assume CPI stands for the cases where the conversion happens when the user installs and opens the app. As for CPA, let’s assume it stands for those offers where the conversion takes place when the user purchases something inside the app (as is the case in regular Mobile Subscription offers).
It’s important to understand why advertisers choose one over the other: CPA guarantees “instant revenue” users since volumes are substantially lower. In CPI, they’re paying for users that may never spend a penny on the app. Even so, due to the fact that the number of installs is much higher, they predict what percentage of those should turn into active users. This prediction of the highest number of active users is what can make advertisers choose the CPI model instead of CPA, where they’d get fewer users.
The way an advertiser approaches CPI differs from the way he perceives CPA. It may sound weird, but advertisers aren’t always looking for committed users. When an app has a high number of installs, it goes up in the Google Play/App Store ranking. This gives advertisers what they’re ultimately looking for – visibility to reach organic users. For the initial high volume installs, advertisers usually look for incentivised traffic. In this type of traffic, users need to install the app to either get some reward in a game they’re playing or be able to see some type of content. Generally, these guys won’t become long-term users of the app they’ve installed.
What does this mean?
Basically, it means that incentivised users are a way to get to those cool, money making organic users that won’t be forced/lured to download an app. Instead, they’ll decide to download it without seeing any advert because they’re genuinely interested in it. This way, developers will pay for the initial downloads only as bait for the real users they’re looking for and that’ll be acquired for free.
Nonetheless, if advertisers want real paying users instead of just many users to go up in the rankings, they’ll become more demanding with the quality of traffic.They’ll need to take the LTV (lifetime value of the user) each publisher delivers into account so they can select which ones they want to see promoting their products.
At the beginning, advertisers may lose some money until enough time has passed for them to be able to analyze the long-term value of users they’ve lured via CPI.
AdMarula Publisher Team.