The iPhone 4

Pros and Cons on Cost per Install

There is a serious trend towards quality in the mobile marketing environment, but what does quality mean exactly? We define it as all actions that happen after the click, that could be installs, tutorial completions, sales or any kind of acquisition (leads…). Then, let us concentrate during one article on the pros and cons around cost per install (CPI).

Let’s start with the pros first:

CPI drives downloads of course, more downloads means that you can get to a higher ranking in the different app markets. Then, once you start to be high enough on the rankings, you reach enough visibility, organic downloads will be generated by users interested and/or curious about your app. It’s a virtuous circle that starts from this point, as the high ranking generates free downloads in addition of the ones paid for.

– Driving downloads can be very fast as the CPI campaigns are thought to target people who will be more likely to be curious about the app you advertise. Fast downloads mean going up on app stores even faster and all that to guarantee a higher return on investment than classic cost per click campaigns. However, we must not forget that the quality of the download also highly influence the ranking of an app.

– You can be both an advertiser and a publisher, so not only you will spend money to advertise your app but you will be able to earn money from the ad campaigns you will host on your app.

– Incent/Non-incent: from the incent point of view you will rise the number of downloads very quickly, from the non-incent point of view the quality of the users will be higher and thus there will be more chances to get users who will be using your app on a long-term scale.

– If we talk about users on the long-term scale, we have to talk about lifetime value. Indeed, as quality will be higher and the users will properly use the downloaded app, the lifetime value of each users will clearly increase compared to CPC or CPM campaigns. So that means incomes for a longer period of time!

Yet, we have to be fair here, of course CPI is – according to your needs – a very interesting mobile marketing tool but there are also negative sides that have to be taken into account.

– A limited control over traffic. With the less transparent system of ad networks, advertisers will face difficulties to evaluate the quality of traffic their ads have been exposed to. And we all heard about networks that wants to drive as much installs as possible to the point that they use cheap, low quality traffic for their CPI advertisers.

– A limited user behavior tracking. With the ad network trend in order to drive more downloads, the advertisers will have difficulties to really evaluate the quality of the traffic its ads has been exposed to. It’s not until the advertiser decides to drive a lifetime value analysis of its acquired users that it will really be able to evaluate the quality generated by its campaign. Indeed, the CPI campaigns allow advertisers to analyse the kind of users who downloads the app but it is hard to say why the user decided to download it in the end. However, many ad networks do understand the advertiser’s need to examine its campaign performance, they thus offer to their customers useful tools like time spent, browsers, bounce rates and many other things to get real insights on their mobile campaigns.

– The cost. Yes, the cost is now a real issue for app marketers and game developers when they decide to work on CPI as Trademob explains it in this article:

“On average, it now costs developers $1.79 to acquire a quality user, defined as a user that will open the app at least three times. That’s up 30% from November 2012, so it’s imperative that app marketers are taking an intelligent and efficient approach to advertising.”

Indeed, if we follow SuperData analysis of the market, a download costs more in the mobile game field than the total lifetime value of a user, so monetizing is the issue here. The cost per install was $2.73 for mobile game last year whereas the lifetime value of a user was estimated to just $1.96. The reason for this increasing cost? The intense competition among apps on markets as vast as the App Stores and Google Play which possess more than 1 million apps each.

In addition, mobile marketers should not only look at the number of installs but more at the next step, what should we do after the download to retain our users and make them use it as much as possible? As Jason Spero – Google’s head of performance media – points it out on this article:

“App installations are one of the best ways marketers have to measure the success of their apps today, but they can’t stop there, according to Google’s head of performance media Jason Spero. In particular, developers and marketers should be paying close attention to reacquisition — engaging with users after they’ve installed apps — Spero said at our MobileBeat conference today in a conversation with Re/code reporter Ina Fried.”

And you? Are you one of the pros or one of the cons and why?

The Art of Click Team.