So long, farewell, good riddance. These are our parting words to the Cost Per Install (CPI) Index as, this month, we announce we have officially retired it.
Why? Well, although it still has a role, CPI should no longer be the central metric to measure app marketing success. We don’t think advertisers should focus on it — so we’re not going to focus on it either.
Marketers and advertisers are now dealing with a heavily saturated app market and realizing the lifetime value of a user is more important than just high app install volumes. They understand that using more segmentation, more precision, and more data to more precisely target the right users is increasingly more important than finding just any user.
Our own March data shows that app downloads were, in fact, down 7 percent month over month – falling to 7.6 million. The Cost Per Loyal user, which we are continuing to measure, also fell to $3.21, down 8 percent since February. Additionally, data from comScore actually found that most people don’t download apps on a monthly basis anymore. All of these findings really speak to the decline of the “app frenzy.”
Given the new landscape, it’s critical that marketers work to reach the right audiences, with the right messages at the right times to lock in their most relevant and reliable consumer base and spark further growth of their apps. CPI is no longer relevant as it can dramatically shift depending on the various targeting tactics required to most effectively market different types of apps to different to audience segments.
As noted in VentureBeat this month, lead analyst at VB Insight Stewart Rogers corroborates the decision to retire CPI, saying “The writing has been on the wall for CPI-based acquisition for over a year now. In 2014, more than 50 percent of publishers chose CPI as their favorite first method of paid user acquisition. As VB Insight research showed, CPI is good for high volumes of users, but bad at producing high-quality users. In 2015, publishers caught on, and started favoring CPA/CPE, which in turn attracts customers with a higher LTV. That trend continues into 2016.”
To read more about the data, along with our full analysis and recommendations, check out the results here: http://www.fiksu.com/resources/fiksu-indexes#analysis.