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Besides the $3.00 for CPI (cost-per-install), are there more costs associated with a CPI ad budget?

I am preparing a CPI budget and I'm curious to find out if there are other costs associated with the going CPI rate of $3.00. I'm uncertain if $3.00 includes the rate of placing the ad or not. If there is an associated cost, would $5.00 CPI be safe to cover all necessary cost?

6 Replies

Maxine Pierson
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Maxine Pierson Advisor
INTERIM CEO, EXECUTIVE DIRECTOR/ VP Investor
Dear Brevik- How coincidental - re: advertising - we are going to be sending out an introductory offer later on this week - still creating copy . for startups : We will run your 1 MINUTE COMMERCIAL RUN for 90 days in our USA market - (Choice the LA - Miami Fresno - St Louis-markets -e.g. 15,000,000 viewer pop just in our LA market . :A INTO PRICE of $499 ONE TIME and for this time only -NO REVSHARE - if your interested please let me know - FYI we also are heavily in Asia / Africa - Singapore/and glad to address these markets as well./ Best Regards, Maxine Pierson Executive Director PH: [removed to protect privacy] FAX: [removed to protect privacy] www.STRATEGICBUSINESSINSTITUTE.ORG
William Agush
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William Agush Advisor
Founder and CEO at Shuttersong Incorporated
Where are you running these campaigns? I can tell you from experience that not all CPI is created (or performs) equally. I can tell you that it's very hard to build a sustainable business paying for installs. More importantly the real cost of a CPI campaign is what happens after the install. With 50% or more of installs abandoning or uninstalling your app once they try it the true cost is at least 2x the install cost, so if you're paying $3.00 it's really at least $6.00. Some of this is offset by organic installs but I ignore that.
Josh Levitan
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Josh Levitan Entrepreneur
VP, Product & Marketing at AIR.TV
The CPI figure is just the cost per install wherever you're running your ads (e.g. Facebook Mobile). If you're running the ads yourself, there's no additional cost. If you're planning on doing that through an agency, you'd need to factor their fee on top of that.

As William Agush mentioned, that CPI figure is just the cost to get an install. It is not the cost for a user to actually open up your app or to engage in a useful action. Those costs will be higher.

You'll also want to model out your retention and whatever downstream actions (like monetization or watching ads) to make sure that you're spending your budget sensibly.

It also (generally) becomes harder to hit your CPI targets at scale.
Nancy Fulton
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Nancy Fulton Entrepreneur
Media Funding, Marketing & Monetization
I've had really (really) good luck using video ads on facebook that drive people to a website that has links that let people install my apps. I pay .02-.05 to run the 15 second to 1 minute ads . . . and the conversion is good. Running video ads on Youtube also works. I have found that Cost Per Install ads don't work very well at all. You pay a great deal for the install and folks tend not to stick around.

I would add that you should probably set up your website for your app, then try driving some traffic to it for a couple of days, to make sure you know how much it costs to click a Get App button. You can (in the short term) make that link take people to a "give us your email and we'll let you know when our app is available" page. But you need to fine tune that pitch (I think) before you can really know how much your ads will cost per install.
Christoph Ranaweera
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Christoph Ranaweera Entrepreneur • Advisor
Product Lead
it's in the end what you pay for the advertising. if you run the campaigns directly with networks like apploving, chartboost and so on you will get the cost and installs and get the CPI. How how it will be depends on the marketability. (How good is your marketing message and how easy is your product to sell = to make people click to install)

Additionally to CPI there is as well an eCPI. If you are lucky people talk about your app and you get install you don't pay for.
This will depend on how good your app is. But this is all an additional complex topic
Colin Behr
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Colin Behr Advisor
VP, Business Development at Vungle
As per other answers in this thread, I can say that it depends. Not to avoid answering the question, but it is very dependent upon the channel(s) that you want to use.

As one of the people on this thread has already alluded to - CPI is only the end cost per install that you end up paying. There are channels, like TV advertising where you will pay to reach a (relatively) specific audience and your spend will back out to an effective CPI (eCPI).

I'll attempt to answer your question, but give you a warning - the CPI is far less important than what you pay vs. what you get from a user engagement perspective. Advertisers usually refer to this as the ROI or ROAS (return on ad spend). The savviest of advertisers are therefore not so much focused on the CPI but rather their percentage of gross revenues that goes towards ad spend. For those who aren't making immediate IAP (in-app purchase) revenues, they still translate the value of in-app actions and engagement to dollar values.

By and large, you'll find that the CPI landscape on the in-app advertising side looks something like this:

Walled Gardens:
Facebook, Twitter and other social networks tend to very tightly control their audiences. They don't want you to bid in realtime on users and therefore ask you to enter your target CPI. Facebook also recently introduced actual CPA bidding - with CPI being a form of CPA this allows you to actually bid the CPI that you're prepared to pay. This may seem transparent, but the hidden cost is attribution, or who they claim the install. Facebook for example will claim any install that occurs when one of their users views an ad - considering that it's easy to scroll through endless ads in the feeds you might not consider this to be far. Unfortunately if you want FB users you have no choice.

DSPs (Demand Side Platforms):
Most exchanges (like Mopub) don't necessarily provide a good interface in order to optimize for buying on a CPI basis, particularly if you intend to optimize towards post install CPA or CPE (cost per engagement) goals. DSPs will place these buys for you and optimize towards your goals.
The challenge here is that exchanges allow DSPs to bid in realtime, which requires a bid to be placed as CPM, rather than CPI. The DSP will therefore optimize to hit your CPI goal, but not necessarily guarantee to hit your goals. Even if they agree to take the risk to hit your CPI goals they probably won't guarantee to hit your CPA goals, leaving you to hold the bag if it doesn't work out. It's important therefore to understand what model they work on and how much you will likely need to invest in order to understand how well they perform.

Networks:
Ad networks try to more manually match demand and supply and often perform a greater array of peripheral services in order to help you optimize and hit your goals. There are plenty of CPI networks out there, but very few of them will optimize to hit your post install goals.

This is by no means an exhaustive overview, but feel free to contact me if you need more information.
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