What are CPI, CPC and eCPM? In this blog series, GameAnalytics bust some jargon, explore exactly what these metrics are for and see how to calculate them.
In our last foray into the mystical land of obscure acronyms, we explored terms like Daily Active Users (DAU). Today, we’re getting out our machetes and hacking away the mystery surrounding CPI, CPC, CPM, and more.
How to calculate CPI: Cost Per Install
You can pick a date range or your total
When you’re looking at your ad spend and installs, you’ll probably want to look at the last quarter’s figures. But this can really be any range you like. Last month. Last week. The whole lifetime of your game. It’s up to you.
See whether less-direct marketing is working
People are sometimes unpredictable, and often don’t follow the well-trodden path you’ve carved out. In an ideal world, players would see an ad, click it, then download the game.
But in real life, it might be that they see your game on a bunch of Twitch streams, notice a couple of ads, see your game in the editor’s choice on a news site, and decide – a few weeks later – to download your game straight from the app store. It was the culmination of all those things that finally worked, not just one.
So the Cost Per Install is a useful benchmark to see: “Are my efforts for paid user acquisition working?”
Sure, it doesn’t tell you which exact one worked. But you’ll see whether you’re doing something right. The key is to track whether you are generating more revenue per user (ARPU) than you are spending to acquire the user.
Try changing less each quarter
It’s tempting to completely overhaul your marketing when things aren’t quite going right. But it can be hard to know which change helped. What happens if you just switch your ad network? What if you stop just the one ad? If you see a big difference, you know it was linked to that one change.
How to calculate CPC: Cost Per Click
Your marketing cost is for an individual piece
If you write an advertorial on a news site, then look at how much that specific post cost you. If you run a bunch of ads, how much does each one cost you?
You can go broader, if you like. You can cost up an entire campaign and look at how many clicks the whole thing got you. But we tend to find that if you go more specific – ad by ad – you can figure out the campaign later by just adding them together. You can’t go the other way.
How to calculate CPM: Cost Per Mile (1,000 impressions)
Mile just means 1,000 impressions
Cost per mile comes from the romance languages where mille means 1,000. So that’s why it’s got a silly acronym. It just means how much it costs per 1,000 views.
CPM is how much it costs you
Use it to figure out how much it costs for people to see your ads. It’s useful to compare this to your click-through rate and see how many of those views actually turn into action.
It’s worth remembering that just because you don’t get immediate clicks, doesn’t mean the advert isn’t working. As we said with CPI, people might download your game later, without clicking your ad. (You can spot if your players tend to do this if you’ve got a high CPI but a low click-through.)
So whether you’re a new or seasoned publisher, with creation of each ad campaign it’s essential you ask yourself which billing model works for your needs. CPC is considered a low-risk and reliable way to get more conversions, especially if your ads do not have a very specific audience. As a bonus, you get ‘free impressions’ while you pay only for results. On the other hand, CPM can be a cost-effective way for getting desired results while reaching out to a much broader audience
How to calculate eCPM: Effective Cost Per Mile
eCPM is how much you earn
Your eCPM is the other side of the CPM coin. You use CPM when you’re the one paying to advertise your game, while you use eCPM to see how much the ads you show inside your game are earning.
It’s not technically right, but we always imagine the ‘e’ stands for earnings.
eCPM is a valuable metric to compare costs across all your campaigns, regardless of their billing method, CPM, or others. It is useful to understand what those ad impressions that you’re paying for are generating for you. When it comes to eCPM, every little increment matters when you have a large audience. It is useful to understand what ad formats work the best for your game and optimise your ad strategy to shoot up eCPM
How to calculate CTR: Click-Through Rate
CTR is a percentage
So you’re finding how many of your impressions are turning into clicks.
While low CTR can suggest that your ads aren’t relevant to your audience, don’t be disheartened if this looks really low. According to WordStream in 2018, the average click-through rate across every industry was 3.18% for Google Adwords search. (And as low as 0.46% for Google display ads.) So it’s worth benchmarking your CTR against the average in your industry/sector to better understand if you’re on the right path.