LTV: The Heart of App Marketing [Mobile Story Part I]
Measuring the lifetime value of an app should be at the very heart of a successful app marketer’s routine. It does not just represent half of the ROI formula (revenue-cost), it is the basis of a smart, data-driven user acquisition strategy as it informs marketers exactly how much they can afford to spend on a user. This information is vital in today’s market where media costs are rising and the success of an app is mainly determined by quality rather than quantity. There is no money to waste!
For example, if the average user LTV of app x is $4.2, the app can theoretically pay up to $4.19 to acquire a user and still be ROI positive. It’s as simple as that. Of course LTV measurement is not that simple but it is certainly not complicated. By measuring incoming revenue from in-app purchases, in-app advertising and other sources, in addition to user churn and the lift from organic users, you will be one step away from measuring your true ROI.
The following presentation explores why and how you need to measure the LTV of both your organic and paid users to help you succeed in a fiercely competitive marketplace. Enjoy!