Are you still measuring and optimizing your mobile app marketing campaigns around achieving the best cost per install (CPI)? In a free-to-play world, savvy mobile app developers are now focusing on moving away from using quantity of installs and CPI as the ultimate measures of success. Achieving the lowest possible CPI remains a worthy goal, and post-hoc analysis does measure the quality of installs. But CPI fails to provide marketers with a real-time measurement of a campaign’s cost effectiveness, and it does not empower media buyers to make well-informed budget optimizations.
Introducing the new golden metric: Profit per Install (PPI). More than just another acronym, PPI is the holy grail of marketing metrics that digital marketers have been searching for since the beginning of time (waaay back in the mid-1990s).
The 5 Percent
Not all mobile app installs are created equally. Some people install apps, never to return. Others install apps, use them all the time, but never end up spending a dime. And then others (let’s call them “the 5 percent”) install the app, use it fairly often and even spend money. App developers covet the 5 percent.
95 percent of consumers will not spend money within the majority of mobile applications. Yet, mobile developers still pay good money for these customers (over $1.25 on average per install, regardless of quality). Using simple math, that means on average, app developers are spending $125 for every five quality installs.
So, how can marketers become more savvy with how they buy app installs? How can we tip the scale in our favor, and spend more money on the profitable customers, and less on the ones who never monetize? Therein lies the question on every app developer’s mind.
As a digital marketer for most of my 15-year career, I’ve rigorously managed media buys using a tried and true four-step process whether purchasing media on a cost-per-thousand, per-click or per-acquisition basis.
- Buying a minimally viable amount of media, but enough to provide a good sample for site- and creative-level analysis;
- While analyzing campaigns, handpicking which sites and creative were most “profitable;”
- Armed with this resulting data, investing heavily in the most “profitable” sites and creative and scaling user acquisition efforts accordingly; and,
- Rinsing and repeating each of these across every marketing channel.
While these basic tenets still hold true in today’s new mobile app-driven world – with marketers mostly optimizing around Cost per Install (CPI) – we now have an opportunity like never before to step up our efforts at truly building “profitable” campaigns. Here’s why and how.
Getting as many users as possible to install an app is always a worthy endeavor, as a marketer’s first step toward monetization. But, in a mostly free-to-play world, measuring installs is no longer a viable method of gauging and optimizing the effectiveness of a marketing campaign, nor the profitability of every dollar invested.
At Kontagent, we help our mobile app clients measure and understand their campaigns by arming them with the Profit per Install (PPI) ofeach of their media buys. This new, more meaningful metric enables mobile app marketers to measure and optimize programs well beyond the initial customer acquisition event to pinpoint how installs perform, attributing each to its original source to quickly and easily recognize the highest quality media buys. They also rapidly generate data around a longer-term outlook on the value of installs.
This capability gives mobile marketers the ability to make “halftime” decisions on a campaign’s profitability, facilitating decisions to carry it forward or pull the plug. Instead of relying purely on CPI, PPI greatly improves the accuracy of digital marketers’ measurement of ROI because it allows them to measure and optimize campaigns based on their predictive lifetime value, right down to the creative that generated the initial click.
Profitability, or PPI as a key performance indicator provides a much more accurate measure of overall campaign effectiveness as well as the overall value of customer acquisition channels. It’s the KPI we’ve all been searching for but could never find. And, for those who adopt it as a standard for how they buy, measure and optimize their media buys, it could be pure gold.