CPI (Cost Per Install) or Cost per Acquisition (CPA), which has become synonymous with the term "affiliate," refers to how much advertisers are paying affiliates to drive traffic and sales. The key difference between CPC and CPi is that CPC measures the cost of acquiring new customers whereas CPi measures the value of driving existing users back into your site.
In other words, it’s about converting an existing user into a customer who will then make further purchases from you. However, this can be tricky as you need to get them to come back again and again—and not just once but many times over.
The main metric used by advertisers to measure the effectiveness of their campaigns is known as “Acquisition Rate” and it is calculated using the following formula:
Where n = # of people exposed to campaign ad/day x 100% /# of people actually converted into leads & buyers x 100%.
So if we take our example above where we had 1000 impressions on day one and 20 visitors signed up to our newsletter, we would calculate our conversion rate at 2 percent. This shows us that every time someone saw our ads they went onto sign up to our list. We could also say that the number of people who were exposed to our ads was 1,000 (1000 impressions). Now let's look at another scenario:
If we took our previous example and increased the number of visitors each day by 10%, we'd see our Conversion Rate increase to 3%. So if we have 10,000 impressions today and 30 people convert, our new conversion rate would now be 0.3 percent.
Affiliates are rewarded when a website visitor clicks through to your landing page, makes a purchase and completes some sort of action such as signing-up for email updates. It doesn't matter whether the person converts because they bought something online or subscribed to your free trial - the important thing is that they do something valuable and provide you with data that you can use to improve future offers and promotions.
This type of advertising model allows companies like Amazon, eBay, Facebook, Google AdSense, Shopify, Woothemes, etc., to pay out money based on the amount of interest generated. For instance, if you're selling products on Amazon, you may receive payment based on the total volume sold. If you run a blog, you might earn commissions if your readers click through to buy items featured within articles.
For those looking to sell digital content, there are several ways in which you can generate revenue via CPI networks including:
Payment by Click (PBC): When a reader views your article or video and decides to go ahead with buying anything featured within it, you'll automatically receive compensation. There are two types of PBC models available – Pay As You Read (Paysite) or Pay As View (PV). With PV, viewers must watch the entire piece before making any purchase. With paysites, they can access the full product without watching the whole thing.
Pay per Lead (PPL): Similar to PPV, you only receive payments after a potential buyer registers themselves on your website.
Pay per Sale (PS): Again similar to PPV, you only receive payments after a sale takes place.
Pay per Download (PD): Like PS, you only receive payments after a potential buyer downloads a file from your site.
Pay per Sign Up (PSU): Similar to PSU, you only receive payments when a prospect signs up for a membership package.
Pay per View (PV): When a viewer watches your video, you receive a commission for the viewing.
Pay per Click (PPC): Another way to monetize your content is by generating income off display advertisements placed across different websites. These include both paid search results (such as Google Ads) and social platforms such as Twitter, LinkedIn, YouTube, Instagram, etc.
It should be noted that these methods aren't mutually exclusive and you can combine various forms of CPI together to maximize profits.
As mentioned previously, CPI is all about conversions so it stands to reason that mobile apps are great places to start measuring your audience engagement levels.
When developing mobile applications, it’s essential to understand how to create effective user experiences that encourage people to stay longer and interact more often. By doing so, you can drive higher amounts of incremental revenue and build loyal audiences that will grow over time.
A good practice to follow when creating an app is to give users multiple options for purchasing additional features. Some popular examples include subscription services like Netflix, Spotify, HBO Go, Hulu Plus, Apple Music, Kindle Unlimited, etc. Once subscribers reach a certain threshold, they can unlock premium features and gain access to even deeper functionality.
Another common approach is to charge recurring fees. For example, most dating sites allow members to upgrade to VIP status by paying monthly subscriptions ranging anywhere from $10-$30 dollars per month. While this method isn't exactly ideal for everyone, it works well for those who enjoy long-term relationships with service providers rather than short-lived interactions.
Finally, consider adding microtransactions to your application. Instead of charging large sums upfront, you can instead ask users to spend small increments of cash during playtime. A good example of this is Angry Birds' Piggy Bank feature, which lets players collect virtual coins and exchange them for real currency.
The same principles apply to media producers too. If you produce live events such as concerts or sporting tournaments, you want to ensure that you've got plenty of ways to engage fans throughout the event. One strategy you can employ is to add incentives to promote fan participation, such as offering prizes and discounts for high scores and participation.
Additionally, you can try incentivizing attendees to share videos of their favorite moments on social channels afterwards. This helps boost viewership numbers and ensures that your brand remains top of mind among consumers months down the line.
Lastly, think carefully about the length of your show. Longer events tend to attract more attention since they last longer, and therefore generate greater revenues. Conversely, shorter events don't require quite as much investment and thus result in lower returns in comparison.
Similar to CPI networks in general, you can implement this concept to monetize web stores and physical locations alike. Consider giving away discount codes or coupons to entice shoppers to visit your store for special deals. Or perhaps you could reward loyalty program participants with points that they can redeem towards merchandise.
There are endless possibilities beyond these examples. But regardless of the specifics, the goal is always the same: to keep people coming back for more. And by implementing strategies that work in conjunction with CPI, you'll be able to achieve this objective more easily than ever.
CPE stands for cost per engagement. It’s an essential metric that marketers should know when working with their advertising campaigns and goals.
The value of the CPE can be understood by comparing two similar products or services. For example, if we compare apples against oranges, one might think that there's no difference between both, but actually they are completely different from each other. The same thing applies to CPAs. They aren't exactly the same, as some costs may differ from others, depending on the industry.
In this article, we will discuss how CPE works and why it matters so much in digital marketing.
When we talk about CPE, firstly we need to understand its importance in e-commerce stores. If someone wants to buy something online then he needs to find out whether the product being offered is worth his money. To make sure that people don't waste their time looking at useless things, sellers offer discounts for those who want to purchase quickly. However, these days many websites also allow users to get information without buying anything. This makes them look more attractive than before.
To help keep track of all these deals, merchants often use CPE. The main idea behind using CPE is that if the merchant offers a discount for quick purchases, then the customer would probably spend less compared to those who take their time shopping around. Therefore, the merchant knows which customers are valuable and which ones are not.
Now let us see how we can calculate CPE in digital marketing.
Cost Per Acquisition (CPA) is another name used for calculating CPE, but it has slightly different meanings. You must remember that CPA refers only to paid traffic sources such as advertisements while CPE includes organic search engine results, social media channels, etc., too.
For instance, suppose you advertise your website through Google AdWords. Now imagine that after spending $1,000, you receive 1,500 clicks.
This means that you spent $0.01 per click resulting in 1,500 clicks. As you can see, this calculation is based on clicks instead of conversions. Also, the amount mentioned above doesn't include any commissions or fees charged by Google.
If you spend $100 and receive 200 clicks, then you'll end up paying $5/click. So, in this case you'd pay $10 even though you received fewer clicks.
However, if you had 100 sales leads every day, you could expect to sell 10 units of goods every month. Then, your monthly revenue would be equal to $100 x 10 = $1000. Your profit margin wouldn't change because the total number of sales remains unchanged.
Now let's say that you wanted to increase your sales volume. But due to limited resources, you decided to invest only half of your budget into PPC (paid search). That way, you reduced your daily CPC rate from $6/day to $3/day. After 2 months, you noticed that your conversion rate increased from 3% to 5%.
So now you're getting 50 new customers every week instead of just 20. And since the price didn't decrease, your profits grew from $100 to $200. Thus, you doubled your revenues and improved your profit margins.
You can apply this formula to all kinds of businesses including B2B companies, SaaS providers, E-Commerce sites, etc.
Let's go back to our previous example. Suppose that you invested $800 into Google Ads and received 800 clicks within 30 days. Since your average CPC was $3, you made a loss of $30. However, after receiving only 700 clicks, you realized that you were losing $20/hour.
That's because most of your visitors came from local searches, i.e. keywords like "dentist" and "cosmetic dentist". These types of searches usually result in lower prices and therefore require higher bids.
By applying the above formula, you can calculate your hourly return on investment (ROI), which tells you how profitable your campaign really is. For example, if you earn $700/month from your PPC ad campaign, then you can estimate that your ROI is 40%.
Facebook's algorithm is constantly changing and thus advertisers cannot rely solely on statistics provided by the platform. Instead, they need to check their performance manually. To do that, they should measure CPE and determine how effective their ads are.
Suppose that you run an advert promoting a service with a headline saying “Save Money With Our Service”. Then you'll notice that several people clicked on your advertisement. Based on this data, you'll decide to continue running the ad until you reach certain numbers of impressions and clicks.
After reaching your goal, you can conclude that your campaign is highly effective. By following this approach, you can easily improve your CTR and boost your earnings. At the same time, you won't lose sight of your original target audience.
Nowadays, many business owners prefer to test multiple variations of their ads to learn which one performs better. When you launch an experiment, you can set up separate sets of parameters. For example, you could add a specific image, create a custom landing page, adjust the message, etc.
To monitor how well your ads perform, you should always calculate CPE for each variation.
A high CPE means that you've found a great strategy to drive relevant traffic to your site. And although the method you chose isn't perfect, it still generates enough interest among potential buyers.
Thus, your next step would be to focus on improving the quality of your content and increasing your brand awareness. In addition, you should develop ways to convert visitors into loyal customers. This way, you can build long term relationships with your clients and attract repeat business.
Moreover, by monitoring your CPA over time, you can figure out how much more efficient your campaigns are compared to competitors'. You can then implement strategies that maximize your returns and minimize expenses.
Finally, whenever you plan to launch a new promotion, you can consider testing various versions of your ad to optimize your CTR. Once you discover which version performs better, you can save yourself time and effort.
With the right tools and methods, you can easily analyze your CPE and gain insights into where your efforts should be focused. If you struggle with making sense of the figures presented by Personal Capital, try downloading free software like ClickTale. Here, you can record videos of real user behavior and analyze them later.
Cost-per-install (CPI) is one of the most important numbers when it comes to digital advertising. It tells advertisers how much money they’re spending on an individual user and whether or not their ad campaigns are working as intended.
In this article we will explain what exactly CPI stands for and why it's so important. We'll also talk about some ways that affiliates can lower their costs by reducing the number of installs required from each person who clicks through on their links. This way, your ads are less likely to be blocked by Google AdSense, which would result in fewer people seeing them.
For those unfamiliar with CPI, there are two different types of Cost Per Install networks -- CPA and CPE. CPA refers to “cost-per-acquisition,” where advertisers pay only once for every new customer they acquire. The advertiser pays no matter if the person decides to convert into paying customers after clicking on their link.
CPA networks typically require many downloads before any conversion occurs. For example, let's say you're running a campaign promoting a certain product. If someone visits your site, sees your banner ad, clicks on it, then immediately leaves without making a purchase, you still get charged for that click. That's because the advertiser doesn't know if that person converted until later.
The same goes for CPC, "cost-per-click," which is another term for Pay-Per Click (PPC). While PPC requires a single click from a visitor, CPC allows multiple impressions, but only pays out on conversions.
As you might imagine, CPA models tend to work better for B2B products than for consumer goods like clothing or electronics. With CPA, companies want to ensure that all leads generated through online channels actually go somewhere, even if just to follow up with additional information. However, CPE allows marketers to measure success based solely on the amount of revenue earned from each sale, rather than requiring salespeople to manually track down leads.
If you run a website that offers free content such as ebooks, whitepapers, guides, etc., you may consider using CPE instead of CPA. You could offer a short form at the end of these articles asking users to sign up for your newsletter -- and you'd only need one email subscriber to make the whole thing worth while.
While CPA models typically generate higher commissions for the publisher, CPE provides a clearer picture of ROI since the publisher gets paid directly for every lead they send away. Plus, it's easier to optimize the landing page experience since you don't have to worry about getting credit for traffic coming from other sources.
You should always use both CPA and CPE models together, though. Not only will this help you determine the optimal model for your business, but it will allow you to compare results between platforms.
When talking about cost per install, we're referring specifically to the price that the host platform charges for sending an advertisement to a specific device. When calculating your monthly spend, remember that CPI is measured over time, so you should divide your total expenses by the number of months included in the contract.
This calculation works well for advertisers looking to stay within budget. It helps keep your overall expense under control and prevents unexpected spikes during busy periods. As an industry leader in data analytics, Personal Capital has made it easy for its subscribers to see their CPI figures broken down across several different categories.
Here is a breakdown of how CPI varies depending on your audience demographics:
Age: Older people generally have lower incomes and therefore pay more for subscriptions and services.
Gender: Women are known to shop more frequently than men, driving greater demand for subscription services.
Location: People living outside major cities tend to consume more media via streaming services and apps. Therefore, they're willing to pay more for those offerings.
Device type: Apple devices are far more popular among younger audiences. They're also used more often for gaming purposes. Thus, advertisers targeting young adults will often find themselves paying more for iOS app installations.
Time of day: People tend to check their phones first thing in the morning and last thing at night. These prime times give advertisers access to a larger pool of potential customers.
Since CPI is calculated by dividing a company's monthly expenses by the number of months covered by the agreement, it can fluctuate wildly throughout the year. A spike in CPI due to increased competition usually happens around holidays. So if you need to reach a wider audience, try scheduling ads for a week before Thanksgiving or Christmas Day.
There are several different methods available to advertisers interested in lowering their CPI. Most of them involve increasing the number of installs required from prospective buyers. Here are just three simple strategies that you can implement today.
1. Offer a discount for signing up early. Many websites offer special promotions in exchange for visitors' personal details. For instance, you might ask users to fill out a survey in order to qualify for a 10 percent off coupon code. Once they've done so, you can distribute that code to everyone who signs up during that period. It's a win/win situation because it gives consumers something extra in return for giving you their contact info.
2. Use popups to drive traffic. Popup blockers aren't very common anymore, but they were fairly widespread back in 2005. Back then, publishers struggled to compete against sites that offered freebies in exchange for registration information. Nowadays, however, the practice isn't nearly as prevalent thanks to popup blocking software installed on browsers. But if you really want to boost your sign-up rates, consider placing a large button near the bottom of your page inviting visitors to enter their names and emails.
3. Create a loyalty program. By offering rewards to existing members, you incentivize them to become repeat customers. One of the easiest ways to accomplish this goal is by rewarding fans for sharing news stories and blog posts on social media. Another option is to reward loyal readers with discounts or exclusive content. Just be sure to clearly label each level of membership so that readers understand what benefits come along with each tier.
One of the biggest factors affecting CPI is competition. If an entire country is competing for the attention of a particular demographic group, you can expect to pay significantly more for your advertisements. Conversely, if you're aiming primarily at a niche market segment, you can expect to receive a smaller cut of the pie.
Another factor that influences the rate at which CPI increases is the popularity of a given service. Services like Netflix and Spotify enjoy high levels of brand awareness, thus generating lots of interest from viewers and listeners alike. On the opposite side of the spectrum lies Pandora Radio, whose name recognition lags behind competitors like iHeartRadio and SiriusXM. Because of this, Pandora has had to rely heavily upon radio commercials, leading to skyrocketing CPI.
Finally, the quality of your website plays a huge role in determining how effective your ads will be. Sites with poor design can frustrate users, resulting in fewer clicks and ultimately lower income. On the flipside, if your website looks professional and modern, it will encourage people to visit your pages and provide valuable feedback. This will increase the likelihood that they'll choose to subscribe to your newsletters or take advantage of promotional deals.
A CPE, or cost-per-engagement, metric measures the value of an engagement event. An engagement event is anything related to a potential customer's interaction with your brand. Examples include a Facebook Like, Twitter Tweet, YouTube video view, Instagram post, Snapchat story, or email open.
An ideal scenario for advertisers would be to maximize exposure and minimize waste by focusing their efforts towards highly targeted prospects. To achieve this goal, you must identify your target audience and build relationships with influencers who share similar interests.
Once you've identified your key supporters, you can create content tailored to meet their needs. Then you can either promote it yourself or hire a freelance writer to write articles that fit your goals. Next, you can place sponsored messages on relevant blogs and forums, ensuring maximum visibility. Finally, you can leverage your relationship with these influencers to earn referrals or opt-in forms.
At the end of the day, finding the right balance between exposure and engagement is essential to achieving long-term success. Remembering that CPI is calculated over time, the longer you focus on building relationships with your clients, the more successful you'll be in the long run.
Just follow our battle-tested guidelines and rake in the profits.