What is CPA and CTR Part 1 | Explanation of App Marketing Terms

A must-see for app marketing beginners! There must be many people who have a vague understanding of advertising terminology, but are unable to use it in their daily operations. This time, for such marketers, we will provide practical explanations that can be used from today, such as how to think about when numbers change as well as factors to focus on and improve. If you read this article, you will be able to understand the meaning of the terms along the flow until installation!

‍1. What is IMP (Impressions)?

IMP (impression) indicates the number of times an ad is displayedIn order to increase the chances of installs, it is premised on displaying ads to increase the chances of contact with users, so it is an indicator that marketers should always pay attention to!

 Factors behind increase/decrease in impressions

So how do impressions change? There are many factors that increase or decrease the number of impressions when operating ASA. 

 ✓Increase/decrease in impressions due to internal factors(Changes in keywords to be bid on)

 As you can imagine, among many keywords, there are keywords that are easy to search for and others that are not. For example, if there are keywords “movies” that are searched 50,000 times a month and “Korean dramas” that are searched 30,000 times a month, it goes without saying that increasing the distribution of “movies” with a high number of search parameters will increase impressions. The numbers are likely to grow.  In this way, the number of impressions changes depending on the search parameter of the bid keyword. *Regarding the keywords to be bid on, it is necessary to consider indicators other than the number of searches.

✓ Increase/Decrease in Impressions Due to External Factors(Competitor's Bid Status)

As an external factor, the competitor's bid status has a lot to do with it. When considering the number of impressions and bidding status, it is important to understand the "auction",  since that is how ASA ads are displayed! In ASA, you can purchase ad space through an auction, and impressions are generated by winning the ad space. In ASA, where there is only one ad slot, winning or losing the auction is directly related to the increase or decrease in the number of ad impressions. For example, if there is a keyword that is searched 100 times a day, and Competitor App A strengthens its bid and the number of impressions increases from 20 to 40, the number of impressions for your app will decrease. In this way, competing bids will take away the advertising space that you have won so far, so if you see an increase or decrease in the number of impressions, first check the bid status of other apps 💡

 Bid on keywords in "Discover”

If the number of impressions increases only for a certain period of time , rather than a constant change like bidding, be suspicious of keyword listing in Discover. This "Discover" is an item that always displays 6 keywords in the search tab, and you can jump to the search results by tapping the keyword! So when the keyword you're bidding on appears in Discover, your impressions will increase. Our research shows that the "Discover" keyword often changes in about 4 hours, and in some cases, the number of daily impressions has more than doubled!

 Media exposure

 In addition, when your app is introduced in the media, more users will search for your app's title and relevant keywords, increasing your impressions. Depending on the time of day and the scale of the program, TV impressions can be nearly 10 times higher than usual! Therefore, when the number of impressions suddenly increases, check whether the app has been introduced on TV, commercials, YouTube, SNS, net news, etc.

2. What is CTR (click-through rate)?

CTR (Click Through Rate) is the click-through rate, which indicates how often the displayed advertisement is clicked.

 CTR (%) = (number of clicks / IMP) x 100

 For example, if an ad is displayed 1,000 times and clicked 100 times, the CTR of that ad is 10%!

CTR = (100 ÷ 1,000) x 100 = 10%

 This index makes it possible to measure whether the searched keyword is highly relevant to the app and whether the direction of the advertisement is correct. CTR figures vary depending on the campaign, but Liberteenz, which has been in charge of over 100 app promotions, uses the following figures as rough standards and guidelines. Please use it as a reference!

 Factors that increase or decrease CTR

In ASA, as advertisements, we will basically post these:

• Icon
• App title
• Subtitle
• Part of screenshot or preview video
• Review rating (depending on the case)

Therefore, changes in the above five will lead to an increase or decrease in CTR. Also, when the developer updates the app, users will search for the title name etc. to update the app, so there will be a temporary increase in ad clicks and a tendency for brand keyword CTR to rise!

 Based on these, the factors for CTR increase/decrease are as follows 💡

• ‍CTR increase: Text and creative change, review rating increase, updating‍
• CTR decrease: Text and creative change, review rating decrease

 Synonymous with "TTR" in ASA. Also, in ASA, Click is written as Tap, so it is written as TTR (Tap Through Rate) instead of CTR (Click Through Rate).

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 3. What is CPC (cost per click)?

CPC (Cost Per Click) is the advertising cost per click, and the calculation method is as follows.

 CPC = total cost / number of clicks

 For example, if an ad costing $10,000 is clicked 200 times, the CPC is $50.

CPC = $10,000 ÷ 200 = $50

 Factors behind CPC increase/decrease

There are a number of factors that can change your CPC, but the most likely is a change in your competitors' bids. Also, to understand the relationship between CPC and competitive bids, you need to know how second-price auctions work!

 A second-price auction is a mechanism that allows you to submit a manuscript for an amount that is +¢1 above the amount offered by the app that came second in the auction. For example, App A in the above figure has the highest offer price, so you can win the ad space. And the actual bid amount is not $150, but $100.01, which is the bid amount of the second place application B + ¢1! Here, if application B changes its bid from $100 to $120, application A still wins, but the amount submitted will be $120.01 and the CPC will increase. As mentioned above, when a competing app bids a high amount, the increase in the amount of submissions equals an increase in CPC. Synonymous with "CPT" in ASA. In addition, ASA introduced that Click is expressed as Tap, but CPC (Cost Per Click) is also expressed as CPT (Cost Per Tap) .

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 4. What is CR (Conversion Rate)?

CR (Conversion Rate) refers to the conversion rate, which indicates the percentage of clicked users who converted .

CR(%) = (CV ÷ number of clicks) x 100

 For example, if an ad is clicked 100 times and then 20 installs occur, the CR is 20%.

CR = (20÷100) x 100 = 20%

Factors behind CR increase/decrease

So how does the change in CR occur? When considering the increase or decrease of CVR, it is necessary to consider user behavior up to installation, and it is expected that the flow will be advertisement → app product page → install. Considering the above flow, it can be said that CR is important whether the product page is attractive. Also, according to a survey by Apptentive, it is known that about 70% of users who have installed an app check reviews before installing it, so reviews are also an important item! In addition to the above, there are many factors that increase or decrease CR, so the possible factors can be summarized as follows.

• Changes in creative
• Changes in text
• Changes in reviews
• Implementation of updates
• Timing (e.g. CR of an airline ticket reservation app rises during long vacations)
• Bid on keywords in “App Store Discover

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 5. What is CPI (cost per install)?

CPI (Cost Per Install) is the advertising cost per install .

 CPI = cost / number of installs

 For example, if an app spent $10,000 on advertising and got 50 installs, the CPI would be $200!

CPI = $10,000 ÷ 50 = $200

 Factors driving CPI increase/decrease

Furthermore, if you subdivide the formula of CPI = cost ÷ number of installs, you can express cost = number of clicks × number of CPC installations = number of clicks × CR , so you can also calculate with the formula of CPI = CPC ÷ CR!  Based on the above formula, the factors that cause the CPI to rise or fall are as follows. CPI increase (↑): CR decrease (↓), CPC increase (↑) CPI decrease (↓): CR increase (↑), CPC decrease (↓). Synonymous with "CPA" in ASA. ASA refers to an install as an Acquisition, so CPI is shown as CPA (Cost Per Acquisition) .

6. What is CPA (cost per acquisition)?

CPA (Cost Per Action) refers to the advertising cost for one contract.

 CPA = Cost ÷ Closed contract

 Also, be aware that CPA's A (Action) has various definitions depending on the characteristics of the app! For example, in the case of subscription-type apps, where the monthly price is often the same, Action = paid membership registration, and in travel booking apps, Action = Reservation.  *In the case of travel, since the unit price of each reservation varies, it may be viewed in conjunction with other indicators such as ROAS (cost-effectiveness of advertising, explained in the second part of the article)! In this way, CPA is used as a metric to not only acquire users but also to monetize afterwards !

Summary

In this article, we have explained not only the meaning of the terms, but also explanations for a deeper understanding of related indicators and phenomena when numerical values ​​change! You can maximize the advertising effect by evaluating the flow from users to installing and using the app with various indicators and taking action. Please be aware of this when operating app advertisements.