CPI, or Cost Per Interaction, is a digital marketing metric that calculates the cost incurred by an advertiser each time a user interacts with their advertisement. This interaction could be a click, a view, a download, or any action that a user might take in response to the ad.
The CPI metric is used extensively in the field of online advertising. It provides advertisers with a measure of how much they are spending to get users to interact with their ads. This is crucial for assessing the effectiveness of an ad campaign and determining whether the cost of running the ad is justified by the level of user engagement it generates. The CPI is calculated by dividing the total cost of the ad campaign by the number of interactions it generates.
In the context of mobile app advertising, for example, the CPI would be the cost incurred each time a user installs the app after viewing the ad. This would give the advertiser a clear idea of how much they are spending to acquire each new user.
CPI refers to the cost per interaction, while CPC refers to the cost per click. While they may seem similar, the key difference is that CPI takes into account all forms of interaction, not just clicks. This includes views, downloads, and other forms of engagement.
The CPI is calculated by dividing the total cost of the ad campaign by the number of interactions it generates. This gives the advertiser a measure of how much they are spending for each user interaction.
Some software tools that can help in calculating and tracking the CPI of an ad campaign include Google Ads, Facebook Ads Manager, and AdRoll.
The main benefit of the CPI metric is that it allows advertisers to accurately measure the cost-effectiveness of their ad campaigns. By knowing how much they are spending for each user interaction, they can make more informed decisions about where to allocate their advertising budget.
In conclusion, the CPI is a valuable tool for any advertiser looking to optimize their online ad campaigns. It provides a clear measure of cost-effectiveness, allowing advertisers to maximize their return on investment.