Today we are going to talk about one of the most polemic topics of the mobile industry when it comes to user acquisition: Fixed CPI/CPA campaigns!

Should you run this type of campaign? Advertisers tend to adopt this type of campaign because they believe they have no risk since the payment is done only after they receive an install or a certain event. Are fixed CPI/CPA campaigns truly riskless? 

After watching the video I guarantee that you will change your mind and understand why it might not be a good idea to run campaigns like this after all.

Below you can find the whole video trasncripted:

Hi guys, 

Rafa here! You are watching Share Knowledge.  Today we are going to talk about one of the most polemic topics of the mobile industry when it comes to user acquisition.

Fixed CPI/CPA campaigns!

Fixed CPI or CPA campaigns are the ones you pay a fixed price to your publisher once you receive an install (In the case of CPI campaigns or when you receive an event for CPA campaigns).Advertisers adopt this type of campaign because they say they have no risk since they are only paying after they receive an install or the event the campaign is focusing on. Sounds like a great deal, right? 

Actually, it is not, only in a few cases.

To understand this topic completely we need to discover how programmatic media buying is done.

Programmatic Media:

Basically, on programmatic you have 3 players  

DSP – Demand Side Platform, it’s a platform an Advertiser uses to buy ads. 

Ad Exchange – It’s like a huge market place, basically, a place where Advertisers and Suppliers meet to sell and buy ads, it’s where the auctions happen.

SSP – Supply Side Platform, it’s basically a platform to sell ads. 

Since there are so many players from the begging of the ad-buying until the actual ad being shown, they need to talk the same monetary language. That’s where the pricing models come in

Pricing Models: 

The most commons pricing models are CPM (Cost per Mille Impressions), CPC(Cost per click), CPI(Cost per Install)  and CPA(Cost per Action).

But we need to focus on this guy over here. CPM. CPM is the amount advertisers pay to publishers for every thousand impressions of an ad. Since most of the ad buying is made on impressions, CPM became the most common pricing model for ads.So… when you start running with a programmatic partner, I’m pretty sure that the whole media buying of your campaign happening on a CPM basis. So now that we understand a bit how programmatic and media buying works, let’s start demystifying the fixed CPI/CPA fairy tale.

The main question need to ask is the following: 

Who would like to buy inventory on a CPM level and accept only to be paid when they get an install or an event? Who would like to take that risk? 

That’s right, NO ONE!!!! 

But then how several media partners run on this type of pricing model?Here are a few to your answer to this question

Not Programmatic 

They are not running programmatic, they might be running with their own SDK traffic which is good or they are running with affiliates traffic which is bad. Affiliate means they are sharing your campaign with other companies and those other companies are sharing with other companies until some company starts sending traffic god knows from where to your campaign.

No Traffic

Some known media partners do run fixed CPI/CPA but they like to be safe in order to not lose money. So if your CPI price is high you will have installs, otherwise, you will have no volume.

Fraud

Some partner agrees with this type of campaign afterward they’ll intentionally deliver fraud. Because some negotiated CPI/CPA are kind of impossible to achieve with a usual campaign, so they just put their fraudster mode on and make a lot of money.

-Cheap Traffic

Why would someone take the chance of buying quality and expensive traffic if no one assures that it will generate an install? So normally on fixed CPI/CPA campaigns, they just buy millions of cheap impressions hoping to get installs intentionally, unintentionally, or by misattribution. 

-No Learning

When you are running a campaign the DSP, it’s algorithm will learn as time goes by, it will buy impressions in a smarter way every day, it’s always on constant learning. MORE DATA = MORE LEARNING. If you set a fixed CPI right from the start, you won’t be able to see the impact of that learn on the numbers of your campaign.

So before saying that you have no risk running fixed CPI/CPA, remember that a few shady things might be happening behind the curtains. So take control of your campaigns, know what traffic you are buying, ask your partners to be transparent, understand how they optimize, where do they buy their inventory from, or even what’s their monetary margin. Try running DCPM campaigns optimizing towards a CPI/CPA is normally the best decision you can make.

If you want to learn more about how how DCPM campaigns work or include these ideas to your app strategy contact our growth team.