Cost per Install (CPI) Definition and How to Calculate It

What is cost per install (CPI)?

Cost-per-install or CPI is one of the main metrics used in pricing models for mobile app advertising. CPI represents the amount paid to the ad networks by an advertiser whenever a user has installed their mobile app. This is a set fee, and is typically only charged when the user installs and opens the app for the first time after clicking on the ad.

CPI can be an effective way to drive app installs, as it allows advertisers to track the ROI of their ad spend more precisely, and optimize their ads accordingly.

The CPI can vary depending on the ad network or publisher, the targeted audience, and the competition in the app market. Advertisers can optimize their CPI by targeting their ads to the most relevant audience, testing different ad creatives, and improving their app store listing to increase conversion rates.

How is CPI calculated?

Average CPI amount ($) = Total Ad Spend / Total Installs

In your Tenjin reports, you’ll see 2 different CPI metrics:
CPI = Total Ad Spend / Total Reported Installs
tCPI = Total Ad Spend / Total Tracked Installs

Why is measuring CPI important?

It is important for companies or app developers who are looking to promote and grow their mobile apps to actively measure their CPI. Here are a few reasons why:

1. Cost effectiveness: Measuring CPI can help companies determine the most cost-effective way to acquire new app users. By tracking the CPI, companies can evaluate the performance of different advertising campaigns and channels, and focus on those that offer the lowest CPI.
2. App monetization: CPI is directly related to the revenue generated by an app. By tracking the CPI, companies can determine how much revenue they need to generate from each app user to break even or achieve a desired profit margin.
3. App store rankings: The number of app installs is a key factor in determining an app's ranking in the app store. By tracking CPI, companies can determine which advertising campaigns and channels are most effective in increasing their app installs, and which can improve their app store rankings and visibility.
4. User retention: Measuring CPI can also help companies evaluate the quality of their app’s users. If a company is acquiring low-quality users with a high CPI, it may result in poor retention rates and lower overall revenue. By focusing on acquiring high-quality users with a lower CPI, companies can improve user retention and generate more revenue over time.

How can I determine if my CPI is good?

CPI depends on a number of factors (Android vs. iOS, country, app genre etc). Tenjin routinely publishes benchmark reports that you can use to determine if your apps have a good CPI or not. You can find these reports here.