What Is CPI?

Date First Published: 30th November 2022

Topic: Web Design & Development

Subtopic: Web Advertising

Article Type: Computer Terms & Definitions

Difficulty Level: 6/10

Learn more about what CPI is in this article.

Stands for Cost Per Install. CPI is a paid online advertising method limited to mobile applications and mobile advertising. CPI represents the amount of money an advertiser will have to pay a publisher only if a user downloads and opens an app after someone clicks through their ad. For example, if an advertiser books an advertising campaign and agrees to pay £15.00 for 60 installations, their CPI would be £0.30.

Note:

The advertiser does not have to pay any money if someone clicks through their ad and looks at the installation page without installing the app. They are only charged for each installation.

How To Calculate CPI?

The formula for CPI is:

Total amount spent ÷ total number of installs

For example, if an ad got 100 installs and it cost them £35.00 for all of those installs, the CPI would be calculated below:

£35.00 ÷ 100 = £0.35 CPI

What Affects The CPI?

The following factors can affect the CPI.

The country or region

The location that a user is from is an important factor that affects the CPI. Usually, the price will be affected by the socio-economic standard of the population, meaning that the advertiser is expecting that wealthier countries will spend more inside the app and will be higher value users. Installations from wealthier countries will often come with a higher cost.

The type of app

The CPI can vary based on the type of app. For example, the CPI for casual games is much lower than for hardcore games.

What the user does inside the app

What the user does inside the app can affect the CPI. For example, it is likely that an advertiser would have to pay more if someone installed the app and made an in-app purchase or interacted with it for a long time.

The channel

Depending on the services offered and their popularity, different channels will have different CPI costs. For example, channels, such as Facebook and Twitter might charge higher prices as they are very popular.

The platform

An installation on Android or Apple is another important factor that can affect the CPI. It has been believed that iOS users are likely to spend more than the average Android users. That is because iOS is more commonly used in regions that have a higher GDP. Therefore, iOS users are commonly seen as higher value users than Android users.

What Is The Average CPI?

The CPI varies based on the factors above, but it commonly ranges from £0.20 to £3.00.

Advantages and Disadvantages Of CPI

• Less risk for advertisers than other payment methods. Since advertisers are only paying for users that have actually installed the app and are more likely to engage with it, it reduces the risks of them wasting money on clicks that have little value for them, unlike PPC ads where the advertiser pays for each click regardless of whether the user took further action, such as signing up or purchasing a product.
• It is instant - Advertisers may pay a one-time fee for a certain amount of installs and they then place their ads on a website to boost the number of downloads that their app gets. Advertisers may also pay as they go, meaning that they don't pay a one-time fee. Instead, they pay as users click through their ads and install the app.

• It can promote dishonesty. Publishers can engage in false or misleading methods of reporting downloads so that they are paid for weak or fake installs of the application. This will cause advertisers to be overcharged.
• It can be expensive. Some publishers may charge a lot per installation. Generating installs is always more expensive than clicks. If an advertiser does not know what they are doing, they could lose a lot of money.