As it turns out, most free applications do have a price, which usually manifests as an advertisement. Ads are practically everywhere, advertising apps with every function you can think of. There are even ads that incentivize the user to pay so that they won’t see ads anymore. These ads will often interrupt your usage to show an app that is similar to the one you are currently using, and that is intentional. It is a ploy by publishers to get you to click on the ad, install the app it’s advertising, and/or use the app to eventually make a purchase. These goals stem from three common app marketing methods known as CPC, CPI and CPA advertisements. If you are an advertiser trying to figure out the best method for marketing your app, whether it is already established and widely used, or you are preparing for a launch, read ahead for information about the CPC, CPI, and CPA advertising campaigns.
A CPC, or cost-per-click, advertisement depends on user interaction. With this type of ad campaign, the advertiser is only charged when a user actually clicks an ad banner that connects them to a landing page featuring your app. Since the ad does not depend on the user’s completion of an action, the advertiser is buying the attention gained through user interactions.
A CPI, or cost-per-install, advertisement is limited to mobile app marketing. With this action-based campaign, the advertiser only pays for the ad when a user downloads and installs their application.
A CPA, or cost-per-action/acquisition, advertisement is similar to to the CPI ad, in that the advertiser only pays when the user completes a specific action. The action can be as variable as you desire —from something as noncommittal as downloading an app, up to making an in-app purchase.
The expense of the ads depends on the user interacting with the ad or completing the desired action. They all go a step further than just gaining as many impressions as possible, so advertisers can really hone in on their target audience and maximize the success and productivity of their app.
In trying to maximize the success of these marketing efforts, ad placement is an important part of publishers connecting your work with people who will be interested in your app. It becomes imperative to be strategic in finding which apps to put your ad banners in, collecting keywords that will reach people who will be interested in your app, etc. You want to find people who are going to interact with your ad in a specific way, which only works if you target an audience that is likeliest to do that.
There are differences in cost between the CPC, CPI, and CPA advertising campaigns. They all bring different results, so the cost should be factored into what your specific goal is. And if you make the right ad choice and it proves successful, the small costs should turn out to be pretty trivial compared to what you gain, whether it be financial or otherwise.
The three types of advertisements will yield different results that you may or may not determine to be successes, depending on your specific goals. While the CPC ad only ensures attention to your app, the CPI and CPA ads bring results, but only the CPA ad ties pretty directly to profit. So, when choosing which to use, it’s important to consider what exactly you are looking to gain.
The CPC does not directly correlate with getting users to install and use your app, but the success of the campaign, or lack thereof, will help you gauge whether or not your ad copy is appealing to users. And though easy to overlook, design and copy are important factors in getting people to use your app.
The ad’s actual cost-per-click is determined by a number of factors, including the CTR, or click through rate. The CTR is a metric for how often your ad was clicked when it appeared to users, including both intentional and accidental clicks. The higher the CTR, the more people who are interested in your app, and the less you may pay in cost-per-click over time.
Because impressions are quantified by individual user interactions,the publisher tracks how many people are interacting with your ad in order to bill you for the advertisement. The actual cost-per-click will never exceed your max bid for each interaction, so you can preemptively set a daily budget for the ad campaign, and when that cap is reached, the publisher would make your ad inactive until the next day. It gives you the chance to gauge how your ad is doing compared to how you’d like it to perform and adjust your budget responsibly.
The performance-based model ensured that you get what you pay for, or in this case, pay for what you get.
The CPI campaign is intrinsically tied to user interest. If someone installs your app after seeing an ad and recommends it to a friend, a snowball effect is underway. And before you know it you’re sitting at the top of the app store.
The CPI ad, for example, won’t guarantee that a user will make in-app purchases. But, with CPA, you could employ a monetized action following the ad, which could be an in-app purchase, and you only pay when the user pays.
You can get the most out of your money and don’t have to guess whether or not your ad campaign will be successful. The logistics of running this type of campaign can be tricky, but the wiggle room created when setting your own parameters could limit some potential risk of little to no return on investment.