Since mobile advertising has grown, we have seen certain app marketing methods drive up in price, and one example of this is CPI. CPI, or Cost Per Install, is an advertising method that only charges advertisers each time their app is downloaded, and all throughout 2014 it saw a steady incline in costs.
We know the 2014 Cost Per Install story, but what will CPI cost in 2015? We’ll delve into this below, giving our predictions on the future of this mobile advertising method.
CPI Cost in 2015 – What We Expect to Happen
Whilst it’s hard to predict the absolute outcome of a certain mobile advertising method, we do predict a few changes to happen to mobile CPI in 2015. Firstly, as larger big brands with heavier marketing budgets jump into the app store game, (more of which are doing every week) we’ll see more money being flooded into certain app marketing platforms.
As a result, CPI is expected to increase in price, in some categories and countires massively. There are other mediums that more developers and publishers are getting involved with, and this will most likely negate most effects that are made to the cost of CPI in 2015. One steadily growing advertising medium that is taking a portion of new advertisers is programmatic Real-Time Bidding. RTB is growing at a very fast rate, and it’s a medium that could potentially be a viable replacement for most other mobile advertising methods currently being used.
Will CPI in 2015 be Profitable?
Unfortunately, the answer to this question is specific to those who are asking it. In Fiksu’s latest index report, CPI costs for mobile games were revealed to be between the $1 and $1.50 mark at the end of 2014. This means that for every new install, you’d be forking out between $1 and $1.50.
The question you need to ask yourself is this – will I be able to earn more than $1.50 per new install? For apps and games that rely on in-app advertising for revenue, this will be nearly impossible to achieve, but if you can encourage the average user to spend $3 to $5 within your app, you’ll be swimming in cash.
The result of your CPI spending is not easy to predict though. In most cases, a fairly small portion of users will actually spend on in-app purchases, but reports suggest that as little as 0.15% of users make up for 50% of in-app revenue.
Referred to as ‘whales,’ these high spenders could make or break your CPI attempts, but if you don’t manage to catch a whale, CPI advertising can be a risky venture.
CPI Costs Across Different Categories
Another thing to factor in before making your decision on CPI advertising is that the CPI cost will differ across different app categories, and the amount of revenue you can earn per user will also change.
Interestingly, CPI installs for non-game apps has increased to a higher point than games, but the majority of in-app time is spent within games. On top of this, game apps are particularly easy to monetize with in-app purchases.
If you can effectively get turn your users into purchasers, CPI advertising could always be viable, but it’s a lot more risky than other mediums, such as RTB or other methods of programmatic buying.
If you are convinced you can encourage your users to spend big in your app, CPI advertising will still be profitable in 2015 – the CPI cost in 2015 will not be affected majorly – holiday periods aside, CPI will most likely see a ceiling of around $1.50-$1.70 in 2015.