Basic Guide to Starting Mobile Marketing #2
In the previous article, we discussed the benefits of mobile marketing and the initial steps in implementing it, starting from determining objectives and managing KPIs. In this second part of the article, we will continue the discussion about the cost model.
Cost Model
In the previous article in the KPI section, we discussed several types of cost models, including Cost per Acquisition (CPA), Cost per Install (CPI), and so on. In addition to determining KPIs, understanding various types of cost models is very important.
Because this is directly related to one of the important elements in a business, namely the budget of costs and expenses. Understanding the cost model can help us to optimize the company’s operating costs to be more effective and efficient.
In this discussion, we will find out more deeply about the various cost models that exist in mobile marketing.
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Cost per Click (CPC)
Cost per Click is a cost model in which advertisers will pay each user to click on ads in an application. If the CPI campaign is more commonly used, this CPC campaign is an option. The price that must be paid varies and depends on several factors that affect the results, including geographical factors (the region where the campaign is run), application categories (types of applications advertised), publishers (who handle the placement of campaigns), and the developer of the application where the ad is placed You plugged in.
Cost per Install (CPI)
This cost model is most commonly used in mobile marketing. The main goal is to pay a number of costs so that users want to install the application they have. This fee also depends on the application, the user’s value, and their actions on the application. For example game applications that sell virtual goods at low prices should pay a lower cost for this type of campaign. Because spending or spending per user in the application is also relatively small. Unlike the case with applications with the possibility of high value user transactions, such as flight ticket booking applications, shopping applications, and so on.
Cost per Mille (CPM)
Use of this fee model is based on every 1,000 times your ad was shown. This model is commonly used to increase public awareness of a brand, or a campaign that focuses on reaching a broader audience, without a CTA (call to action) or encouragement to take a specific action (eg download an application, fill out a form, etc.). The price offered in running this model campaign also varies greatly, ranging from the very cheap to very expensive.
Cost per Action (CPA)
The purpose of campaigns with this cost model is to encourage users to take and complete one particular action that generates value in the process. The action required depends on the application category and your business goals. If you have a game application, the goal might be to direct users to buy virtual currencies and coins.
If you have an entertainment application, then that action might be related to subscribing to a service or signing up to become a member to get notifications. Or if you have an e-commerce application, obviously the goal is to make transactions or shop through the platforms that you have.
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Whatever choice you use, there are always additional benefits. You can also experience ROI (return on investment) directly. The price that needs to be paid is not always certain, and can be a combination of several campaigns. For example, the amount of costs incurred for a user to install the application plus the cost to encourage the user to make the first purchase in the application.
Effective Cost per Action (eCPA)
This metric measures the effectiveness of ad inventory purchased by advertisers or application developers through cost per click, cost per impression, or cost per thousand basis. In other words, eCPA tells advertisers how much they will pay if they buy CPA-based advertising inventory.
By studying this cost model, you can plan various mobile marketing campaigns with a better cost strategy. With the right metric measurements, you can see how your mobile marketing campaign is going and how well it works. When there is a campaign running at a high cost but with unsatisfactory results, you can analyze what makes the campaign ineffective (for example design, copywriting, targeting, etc.), and immediately replace what is needed, or even stop the campaign.
After learning the cost model, there are still a number of steps you need to take. The next step will be explained in the next article in the Basic Guide to Starting Mobile Marketing # 3
