How developers should think about CPM, CPC and CPI with regards to advertising.

CPM - Cost Per Mille (1000 impressions)
CPC - Cost Per Click
CPI - Cost Per Install

These are the three main ways that in app advertising is bought and sold.
I find that developers are often confused about the differences so let me try and explain.

I'm thinking particularly about adverts for apps here. Specifically as part of a user acquisition strategy.

Let's start by looking at the "user acquisition funnel".

It's a simple concept.
Lots of people see the ad. Some of them click on the advert and then some of them install the app.

With this in mind there are three ways we can get more installs of an app.
1. Get more people to see the advert.
2. Get more people who see the advert to click on it.
3. Get more people who go to the store to install it.

These three ways of increasing installs relate to the three ways of paying for advertising. - Don't be surprised, this isn't a coincidence.


If I want people to see an advert I can pay (CPM) for the advert to be shown. I can pay more for the advert to be seen by more people. I can also, potentially, pay more for the adverts to be displayed to people who are more likely to click on it. In this scenario the person selling the advertising space just needs to provide the space to show the advert. How successful the app is in getting people to click on it is my responsibility as it will come down to how the advert looks and what it says.

If I pay just for the people who actually click on my adverts (CPC) I will expect to pay a bit more but there's a change in responsibility and the relationship between myself and the person selling the advert space. We now both have an interest in the advert being clicked on. For the ad seller the clicking on the advert is the end in itself. For me it's just a means to an end. We want different things from the advert. If I'm creating the advert and it's not as successful as it could be the ad seller is missing out on revenue. If they create the advert it will likely be optimised for getting people to click on it regardless of whether they have an ultimate interest in installing the app or not.

For many people, paying on a CPI basis is appealing as it removes the guesswork and responsibility from running adverts. You don't have to pay for adverts that no-one clicks on, or that are clicked on but don't lead to people installing the app. In this situation you're paying for results and not just things that should lead to the ultimate result you want. As with paying on a CPC there is a conflict in terms of who created the adverts. In that they are being paid for each install that is driven by an advert (the real value of the advert in a CPI scenario is as a way of tracking where the install came from) the incentive to produce the best advert should be on them. After all, the better the advert the more installs the app will get and the more money they'll earn. Of course, it's not just about the advert, how the app appears in the store will also affect if people install the app. Do you let them produce everything in the store listing too? What about all branding, icons and screenshots? Good screenshots that clearly show the value of the app and how good it is can help persuade people viewing the store listing to actually install the app. Taken to its extreme this may mean them wanting to redesign the app so that more people will install it. While this would be good for the app it's not something any ad company is offering. Yes, some will let you advertise on a CPI basis but it's not always the ideal situation it may seem.

All three ways of paying (or charging) for ads each work to serve the ultimate aim of getting more people to install, and hopefully use, an app. Just be aware what you're actually paying for and where the responsibility for success lies.

Advertising your app can be a challenging task but that isn't a reason not to do it though.

Create better ads for your apps

As an app developer you're probably not an expert in advertising (I'm not either), but over the last couple of weeks I've been running such an experiment with the creators of  a few apps in store to help us all, hopefully, learn a few things about what makes a good app advert.

Let me start by introducing the apps:

Digi Clock Plus Digi Clock Plus is all you need whilst at home or travelling to transform your phone into a functional digital alarm clock with fun added extras. This is one of the most comprehensive clocks in the marketplace and delivers some of the top requested features - photo frame, weather, personalised alarm music and speech.

Grid Ref UTM Pinpoint your current map reference location anywhere in the world, using the Universal Transverse Mercator geographic coordinate system. (UTM) App Provides: UTM Grid Ref, Hemisphere, and WGS84 Latitude and Longitude values. The Accuracy of Readings, as indicated by your device, will also be shown. Grid Ref UTM - Your Grid Refrence App!

MetroSpec MetroSpec is a fully featured 16K/48K Sinclair ZX Spectrum emulator for Windows Phone. Relive the 80's & early 90's by playing the classics, on the 8-bit micro that, kick started the home computer boom. The ZX Spectrum was an 8-bit computer released in 1982, as the successor to the ZX81. Based around a Zilog Z80 CPU, 48Kb of RAM, 16Kb ROM, beeper sound, rubber keyboard, and tape loading, the ZX Spectrum was a true classic, and now you can relive the experience, bring back your old memories, or beat that final boss you found so hard before.

Night Chopper Silly and weird little chopping game! Tap tap tap, and chop down that tree under the moonlight to nice piano sounds. The viewpoint is bottom-up, and you have 4 positions to chop from. Avoid those sharp branches!

Yaht 3D If you like Yahtzee then this game is for you! Yaht 3D is based on the dice game called 'Yacht' which is the predecessor to Yahtzee. Play this simple and fun game against your friends in hotseat mode or try to beat the phone. Yaht 3D takes advantage of the performance of the Windows Phone to bring you accurately simulated dice rolls. See the 3D dice leap out of your phone, spinning, colliding and tumbling under the forces of gravity.

Each of the above apps are currently available in store and are part of the AdDuplex cross promotion network.

For the experiment we ran two versions of an advert for each app for a week to see how different wording would impact how successful the ad was in persuading people to click on it.

To keep things simple all ads were text ads.
If you're not familiar with how these work: "Text ads are automatically animated to show blocks of 2 lines at a time. Line 1 and 2 are displayed together on one panel of the ad and lines 3 and 4 on the second panel."

Here are the ads we used:

Digi Clock Plus

Option 1		Option 2
Digi Clock Plus all you need whilst at home or travelling transform your phone into a functional digital alarm clock with fun added extras		Digi Clock Plus Free app transform your phone into a functional digital alarm clock with fun added extras

Option 2 produced a CTP that was 13% higher.
The only difference between the two ads is the second line. Highlighting that the ad was for a free meant more people clicked on the app.


Grid Ref UTM

Option 1		Option 2
Grid Ref UTM gives you UTM Coordinates, Zone, and Hemisphere information, on your Windows Phone Know where you are with UTM / MGRS information simply presented, on your Windows Phone handset		Never get lost again, thanks to your phone lookup your current UTM location, zone.. ..hemisphere, and latitude/longitude coordinates, simply presented, on your Windows Phone handset.

Option 2 produced a CTP that was 6% higher.
There's not a lot in it but the more successful option is shorter and starts with a clear description of the value the app provides. "Never get lost again" is easier to understand than "gives you UTM Coordinates......" and makes it clearer what the app can do for the potential user.


MetroSpec

Option 1		Option 2
Love Retro gaming? Love 8-bit? Relive the 80’s MetroSpec Sinclair ZX Spectrum Emulator		Remember the good old days? Manic Miner, Sabrewulf, Highway Encounter Play them again, and more, with MetroSpec Sinclair ZX Spectrum Emulator

Option 1 produced a CTP that was 2% higher.
It's hard to draw a conclusion from this as while the two ads are different they were both equally effective. They didn't just produce the same level of results they were amongst the highest of all the ads listed here.


Night Chopper

Option 1		Option 2
Night Chopper tap tap and chop down that tree! Night Chopper avoid those sharp branches!		Night Chopper - FREE and downloaded by 250.000! Relaxing game with beautiful piano songs Nigh Chopper - Rated 4.5 stars by 2.000! Listen to anime, TV/movie themes++ while playing

Option 1 produced a CTP that was 15% higher.
This result actually surprised me. In adverts, at least, showing how many downloads the app has had, or the ratings it's been given didn't lead to more clicks.
The more successful advert was simpler and, I think, intriguing.


Yaht 3D

Option 1		Option 2
Yaht 3D Like Yahtzee? Try this 3D dice game. Yaht 3D brings ultra realistic dice physics Download full game for FREE!		Yaht 3D "A fascinating and beautiful game" - 5 stars Tap here to download "I am hooked. This game is so much fun :-)" - 5 stars

Option 1 produced a CTP that was 8% higher.
As with Night Chopper, highlighting the star ratings that other people have given it didn't lead to better results.
Also, as with Digi Clock Plus, highlighting that the app is free was a successful strategy.


Summary
So, to recap, what have we learnt from all this?
I think we can draw the following recommendations:

• If you're advertising a free app make sure that you highlight this in the ad.
• Having less text in an ad is better than having more text.
• Have a clear value proposition. - Make it clear what will people get from your app.
• Don't bother focusing on how good other people thought the app was by listing your reviews and number of downloads. Tell people what's in it for them.

Hopefully these tips will help you improve the copy in the ads for your apps.
I'd encourage you to test whatever text you use in your ads though.

If you're in the UK, already have an app in the AdDuplex cross promotion network and are interested in me running some ads for your apps on your behalf please get in touch. The only deal is that you agree to me sharing the results of the test like above.
What have you got to lose?

SO: What is the difference between different ad providers for Windows Store Apps?

This question was recently asked on StackOverflow.
The question relates to the different ad providers available and how they compare.
If you're interested, you can see my answer about why you shouldn't use a single ad provider and how AdDduplex and AdMediator compare.