What is a mobile application “cost per install”?

Mobile apps are a critical component of our everyday lives. They affect our interaction with almost everything and everyone. Our actions often revolve around some type of mobile application. As companies maneuver to create new apps, they have to decide what is the most cost-efficient manner to market their application.

One question that surfaces is “which is the best way to measure the client acquisition and marketing costs for our mobile application?” One of such method of measurement called “Cost Per Install” (CPI).

The Cost Per Install model measures the net cost to the application developer for each download of their application to a single user. In other words – how much does it cost to deliver a single copy of an application to a single consumer. Media companies such as Facebook and Twitter, for example, might advertise your shiny, new, mobile app on their high traffic sites and garner countless numbers of clicks and impressions. With CPI, your advertising budget pays only when a user actually downloads and installs the application – not for the volume of click traffic on your advertisement (or Cost Per Click – CPC). Therefore, the more installs the advertisers gain for your app, the net cost per download to the application developer is reduced, thus creating greater profits. By using this method, it guarantees that you, as a client, pay for only as much as your campaign is actually producing. The downside is that your user loyalty or activeness volume is not accurately documented. This measurement is calculated through Cost Per Loyal User (CPLU).

In late 2015, Twitter introduced Cost Per Install as part of two models for clients to advertise on their platform for mobile downloads. According to their beta partners, the CPI model presents the highest cost efficiency – lowering the cost for advertising by nearly 30% compared to its previous model of Cost Per Click (CPC).

According to Fiksu’s Cost Per Install (CPI)Index for November 2015, it measures the cost per app install due directly to its advertising to cost approximately $1.54 for iOS acquired users and $2.27 for Android acquired users.

As business owners, ideal conditions would call for acquiring the highest amount of quality users with expenses that would maximize their Return on Investment (ROI).