Lifetime Value

The Lifeline of App Marketing

Lifetime value (LTV) is a KPI that’s at the very heart of app marketing. Knowing exactly how much revenue users generate throughout their lifetime informs marketing investment in user acquisition, engagement and retention. LTV is also essential to measuring the extent to which marketing investments deliver a positive ROI.

There are several ways to calculate LTV but regardless of the exact formula, there are three factors at play: revenue, retention and organic – all of which are provided by AppsFlyer for analysis, so marketers can measure and improve their performance. Let’s break this down.

Revenue

AppsFlyer uses rich in-app events to determine how much revenue the app has generated and which sources can be credited with having driven this revenue. Armed with knowledge, marketers can optimize their efforts and investments to deliver the strongest revenue.

Measuring incoming revenue is easy with AppsFlyer. Simply define the following post-install revenue events:

01.

Standard in-app purchase events

Knowing when an in-app purchase is made and associating this revenue with the marketing campaign that acquired and re-engaged the user allows marketers to optimize campaigns to improve purchase activity.

02.

Rich purchase events

To maximize revenue optimization, a deeper level of data is required. As such, AppsFlyer enables marketers to enrich a standard revenue event with multiple parameters. These rich parameters reports not only that a purchase has been made but also what was bought, at what price, by which user and more.

03.

Ad revenue attribution

AppsFlyer is the only mobile attribution platform to measure and attribute in-app advertising revenues back to the channel and campaign that drove each install. So you can optimize your campaigns to deliver user with the strongest total mobile LTV for the optimal ROI.

04.

Custom revenue events for paid apps and subscriptions

If the app uses these revenue models, a custom AppsFlyer revenue event will measure this type of app-store driven revenue. LTV modeling for paid and subscription apps is often easier since their revenue stream is more predictable.

05.

Out-of-app revenue events

In today’s omni-channel reality, app users often complete purchases via other channels (both online and offline). This activity significantly alters LTV calculations, and must be measured. To keep all performance data synched, marketers connect out-of-app revenue events with their app marketing data, and their app marketing data with their omnichannel business analytics platforms.

For more information, see our dedicated page on Omni-Channel Attribution and Measurement.

Measuring retargeting in LTV calculations

The AppsFlyer platform attributes any revenue event to the install source, regardless of how much time has passed since the initial install occurred. Our default retargeting (re-engagement) attribution window (for revenue events) is 30 days, and this is fully configurable (as desired).

Consider the following illustration:

ltvreportingillustration

In this case, credit will be attributed to the re-engagement campaign (after the user clicks and opens the app). When it comes to LTV calculation, there is a clear distinction between UA and re-engagement, based on the following:

ltvreportingchart

To prevent duplication, marketers can simply mark any events that occur within the re-engagement window as ‘Primary’ to enable deduplication.

Retention

It is often said that it cost far more to attract a new customer than to keep an existing one. Continued, ongoing retention is often a leading indicator of ongoing revenue and monetization, making retention a key component in LTV calculations. However, in an extremely competitive marketplace, retention rates have been dropping significantly. To combat churn, AppsFlyer’s advanced retention and cohort reports help marketers understand what drives app usage at a granular level.

Organic

User acquisition and engagement managers often pay close attention to their organic multiplier. The organic multiplier is the number of new organic installs for each paid install. Over the past two years, the organic multiplier has dropped precipitously. Despite this trend, organic lift is still an important metric for many app marketers and can have a strong impact on an app’s average user LTV, while reducing the eCPI and can be a key component in turning the positive ROI corner.

 

AppsFlyer gives marketers the organic edge they need with:

Comprehensive organic data

The AppsFlyer dashboard provides deep insights into organic data, including the number of organic installs and the lifetime revenue they generated. With our advanced cohort reports, marketers can define and track organic cohorts to understand what characterizes organic users, what kind of activities they perform in-app and under which circumstances. And our dynamic, custom dashboards allow marketers to compare and analyze their organic performance alongside their paid media or specific paid media sources.

Certification as a Facebook and Twitter Mobile Measurement Partner

Only certified Facebook and Twitter MMPs can accurately differentiate between organic and non-organic traffic coming from two of the top media sources in the ecosystem.

OneLink: perfect for user invites

Determine which GEOs, platforms, channels and types of non-paid promotions deliver the highest number of invites (and which do not) – it’s all part of our powerful OneLink solution.

Track keywords that drove organic installs

Determine which keywords from Google search and Google Play drove each install to gain valuable insights that inform keyword optimization efforts.

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