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In this article we will understand in detail all the intricacies of using cpi in order to achieve maximum traffic indicators. You will also learn about alternative and competing technologies.
Consumer price index and its place in the economy
To assess how the economy is doing, the central bank—the direct regulator of the exchange rate—monitors the rate of change in GDP, the situation in the labor market, in particular the unemployment rate, and how the consumer price index is changing. These three macroeconomic indicators are closely related.
Thus, when the economy is doing well, the labor market has a high employment rate and a low unemployment rate. The population receives a salary, and a constant income and confidence in the future allow them to spend money. Demand for goods and services is growing, which stimulates price increases. The consumer price index is also rising.
At the same time, an increase in demand stimulates supply, and therefore the production of goods and services. The more goods and services produced in a country, the higher the GDP, which also indicates the well-being and growth of the economy.
Dictionary of advertising metrics
The development of Android and iOS applications involves assessing the quality of advertising campaigns, which is carried out using a variety of metrics. The principle of their operation is simple and understandable to everyone. In addition to CPI, the most common are about 5 – 10 options, we will consider each of them further.
As a rule, in addition to the address bar, the user gets to the application according to the following algorithm:
- The user notices an advertisement for the program;
- Go to the store to the application page;
- Download the application to your device.
The effectiveness of all these actions is assessed using a variety of metrics.
CTR
The method stands for click through rate and represents the ratio of the number of clicks to the total number of ad impressions. For greater clarity of the results obtained, the ratio number can be multiplied by 100%.
Using this indicator, it is possible to effectively assess the feasibility of advertising campaign costs. In the case of the contextual method, an increase in this indicator will lead to a decrease in the indicator of another metric - CPC - cost per 1 click.
The higher the CTR of a banner, the greater the likelihood that it will be shown in higher positions in contextual advertising blocks.
CPI
The indicator determines the cost of installing a program from the general advertising channel. The main difference from CPA is the promotion of only free games and applications (in most cases).
In general, if game publishers want to focus on motivating visitors to download the application, then CPI technology is definitely indispensable. Often companies combine this methodology with other methods to achieve better results.
In order for the metric to show the highest possible efficiency, various methods are used to control the effectiveness of attracted traffic. The process monitors the period of time during which the user “sits” in the application, the number of users using the program on a regular basis. With the help of this data, it is possible to obtain more informative data regarding the average income that each individual user brings. It is also possible to monitor information about users who uninstall the program.
SRM
CPM is an indicator that shows the cost per 1000 impressions.
The term is used in marketing, in particular, to display the price of a thousand advertising impressions on one page or one application, banner, etc. CPM is one of many methods that are used to determine the cost of advertising on web resources.
The CPM indicator is calculated using the following formula: Cost of placing one advertisement/number of expected transitions (downloads).
Next, the resulting indicator can be multiplied by 100 for clarity.
CPC
This is a marketing term that denotes a situation where an advertiser pays for a promotion service for each click on an ad, application, link, etc. Using the cost per click, it is easy to determine the amount a publisher spends on showing ads to users in search engines, social networks and other platforms where advertising can be placed.
Cost per click is used when choosing a promotion strategy that allows you to increase the number of clicks while having a limited budget and maximum goals.
There are many advertising methods in which CPC is used by creators, including Russian developers, when calculating the total cost of a paid campaign.
The cost per click is calculated by the ratio of the cost of a paid advertising campaign to the number of clicks. The method is used during the operation of the AdWords service, in which bids are placed on keywords.
CPC (cost per click) = Advertising price/number of clicks.
CR
The abbreviation for the marketing term stands for conversion rate. In our case, the indicator displays the conversion of a specific application page in the store, that is, how many users, what part of the total number of visitors came to it through advertising and then downloaded the application to their device.
The formula is as follows: (number of users who downloaded the program/number of people who clicked on the ad)*100.
The conversion must be high to show a good return on advertising. For example, teaser advertising will provide a good indicator of motivated traffic to the application page, but at the same time, the number of downloads and installations will be small, and conversion into customers will not occur. The conversion of such “cold” traffic is low, and so is the sales level.
CPI networks for mobile applications and games
There are many affiliate programs on the Internet that promote mobile applications on Google Play using the CPI method.
One of these is Notifico. The platform focuses on mobile utilities; there is an opportunity for clients to earn money.
Trust lead is the next affiliate program that has proven itself to bring useful visits. A large amount of traffic is due to high payments for visits and downloads, which attracts useful users.
Another network that provides high performance is Mobi Leader. A Russian platform that works with CPI and provides a large number of downloads and installations of advertiser applications.
Purchasing traffic using the cpi model, is it worth choosing it over the cpm model and what alternatives are there?
Based on the principles of functioning of advertising networks, CRM is a more effective model of work, because it has predicted income. They are influenced by the quality of the ads themselves.
The goal of such an advertising platform is to display a banner, and the advertiser’s task is to set the target and create interest in the user to go to the page.
But, nevertheless, CPI will be in demand in its field for a long time, since with its help the customer can best solve the question of how to promote their application, because even the smallest reward will stimulate the user to download and install the advertised application. An important factor is the gradual expenditure of the budget, because the customer pays for the actual visitor, and not for the fact of advertising itself.
CPI in advertising
In advertising, this model is attractive because, using it, the advertiser pays for real conversions, which allows advertising funds to be spent more efficiently. Despite this, the cost of implementing such a method is an order of magnitude more expensive than SRM or CRM, and besides, users may be interested in installing the program for money, and not in the functionality of the application itself. To check the quality of program installation, trackers and mobile analytics systems are used.
CPI models have become more widespread in affiliate programs, when the client pays for the services of an advertising network only for the total volume of application downloads. Affiliates of an advertising network post their ads and receive various rewards from it for each individual installation.
How to organize CPI analytics when advertising mobile applications and games?
The CPI analytics indicator is calculated using several metrics, including our own. The cost of such analytics depends on the location and platform used. The exact coefficient value is calculated by mobile marketing exchanges.
The RA metric is also used - retention rate. With its help, analytics for advertising applications and games has data on the number of users who came and remained on the platform over a certain period of time. There is no specific form yet, but there is a special coefficient calculated as the difference between the volume of visits at the end of the accounting period and the number of new users. The resulting value is multiplied by 100.
Why is a low consumer price index bad?
Many developed countries, including the US, UK and eurozone countries, have been struggling with low inflation for years. In the UK and the eurozone countries, at a certain period, until 2016, there was even a negative consumer price index: statistics showed deflation (negative inflation). It would seem that prices are not rising - this is good. But in reality it's not like that. Deflation is an even greater enemy for the economy than high inflation. And that's why:
1. A decrease in prices indicates a drop in demand.
2. Low demand leads to reduced supply.
3. Due to decreased demand, companies begin to curtail production.
4. It is necessary to lay off employees or cut salaries, as the volume of work decreases.
5. The labor market is suffering.
6. People begin to fear for their financial future and try to spend less money and save more.
As a result, prices fall even lower and the consumer price index decreases. This leads to a deflationary spiral and a collapse of the economy.
The central bank is on guard against inflation
We looked at what the consumer price index is. Now let's look at what steps the central bank is taking to return inflation to its normal growth rate.
If there is a decrease in inflation below 2.0%, the task of the central bank is to prevent the unwinding of a deflationary spiral. This problem existed in developed countries before, before the coronavirus pandemic, and with the onset of the crisis it worsened. This is also happening in the United States: the consumer price index there has been below this mark for several years now. A similar situation has developed in the eurozone and in other developed countries, the currencies of which most traders trade on Forex.
To “accelerate” the consumer price index, the central bank must soften monetary policy. This is either a reduction in the interest rate, or the introduction or expansion of a quantitative easing program. If the central bank intends to raise interest rates (which will not happen for a long time after the pandemic), then low inflation data will deter it from doing so.
