In this article we will provide a guide for app marketers to the most important mobile app performance KPIs to monitor in order to successfully achieve app growth. We’ve chosen these metrics based on our experience with advertisers from different app verticals such as fintech, shopping, subscription and mobile games. Indeed, please note that advertisers from different verticals may not give the same weight to a specific KPI.
The phenomenal success of mobile apps is in plain sight of everyone as we are approaching 2023. Mobile apps have become part of our daily lives in many different ways, growing the entire mobile app ecosystem and increasing the revenues of all players involved. However, the other side of the coin is that competition is growing too, making it really difficult to stand out for app developers and advertisers. That’s why we’ve decided to put together this comprehensive guide to mobile app performance KPIs.
We’ve divided the KPIs based on the three stages of the average app’s lifecycle:
- Acquisition;
- Engagement;
- Monetization.
Now let’s dive deeper into the matter and see which are the most important KPIs each app marketer should follow.
Acquisition
Acquisition is at the bottom of the funnel for every app. Advertisers can acquire users both organically and through paid user acquisition activities such as app install campaigns. When monitoring acquisition KPIs, it is crucial to attribute each install to the right source which has generated it. Indeed, paid installs may come from different marketing channels and attributing installs through an MMP (Mobile Measurement Partner) is essential to evaluate each channel.
Acquisition becomes the most important stage in the funnel when app developers are big brand-based companies, mostly focused on growing their user base and increasing their ranking in app stores. Since for these companies monetization often happens way down in the user journey, acquisition is the primary goal of their app marketing efforts.
CPI: CPI stands for cost-per-install and it is a common pricing model in performance marketing activities like app install campaigns. It measures how much you are paying in order to acquire a user who installs and opens the app. CPIs vary based on app verticals, targeted locations, operating system versions and other similar factors. Additionally, CPI can be a target and a KPI at the same time. It is a target when the CPI is fixed, negotiated by advertisers and marketing partners. Instead, it is a KPI when it varies based on performance and seasonality.
eCPA: similarly to CPI, eCPA is a pricing model employed in performance marketing app campaigns and it stands for effective cost-per-action. By action, advertisers can set any post-install event they desire, be it registration, purchase, deposit, etc. Advertisers usually choose post-install events linked to their revenues, such as in-app purchases and they compute the eCPA as the ratio between the total advertising spend and the number of times the chosen post-install event has been generated.
Registrations: many apps ask users to sign-up or register right after the install, allowing them to access all the apps’ features only later. Therefore, the number of registrations and the install-to-registration rate can be two relevant metrics to monitor. This example can be applied to fintech apps, which always require registration in order to use the app, along with an identity verification process known as KYC (Know Your Customer).
Engagement
User engagement can be measured in many different ways, and it can vary depending on the app vertical. For example, the way a user interacts with a fintech app is different from the way a user interacts with a mobile game. However, there are some more generic metrics, which we will discuss here.
MAU/DAU: MAU and DAU respectively stand for Monthly Active Users and Daily Active Users. These two metrics count how many users have at least one interaction with an app in a month (or 30-day time frame) or in a single day. App developers can monitor MAU and DAU in order to understand how many users are satisfied with the app and come back to use it.
Sessions: sessions are the interactions a user has with an app in a certain period of time. By measuring the number, frequency and length of sessions you can have a better idea of the engagement users have with your app.
Retention Rate: Retention rate is a very common metric in many businesses. In the mobile app ecosystem, it measures how many users keep logging in the app after a given time period, compared to the number of users who logged in the app at the beginning of the same time period. Retention rate can be computed through the following formula:
(Number of users who use the app at the end of a given time period / number of users who used the app at the beginning of the same time period) x 100
The most common time windows in which our advertisers prefer to monitor the retention rate are day 1, day 7 and day 30.
Churn Rate: Churn rate is the exact opposite of the retention rate, because it measures the rate of users who stop using an app after a given time period, compared to the total users who logged in the app at the beginning of the same time period. The formula for calculating the churn rate is the following one:
(Number of users who stopped the app at the end of a given time period / number of users who used the app at the beginning of the same time period) x 100
Monetization
The last step of our article focuses on monetization, which is how mobile apps generate revenues through their users. According to our mobile games advertisers, monetization is king and it is achieved through advertisements or in-app purchases. Therefore, you can find below the most common monetization KPIs that our advertisers monitor in order to assess and improve their app monetization strategy.
ARPU: ARPU stands for average revenue per user, and, as the name suggests, it computes the revenues each user has generated over a given period of time. ARPU can be computed as the ratio between the total revenues generated over a given period of time and the number of users acquired within the same time period.
LTV: LTV, which stands for Lifetime Value, is often used interchangeably with ARPU, even though their meaning is slightly different. Indeed, LTV, based on data and statistical analysis, predicts how much money users will spend in-app during their entire lifetime as app users. As a result, app developers can identify the most valuable users as the ones with the highest LTV. This is a metric taken into account especially by our mobile gaming advertisers, who aim at acquiring high-LTV users in order to have a positive ROI in the shortest amount of time.
CAC: CAC stands for customer acquisition cost, which is exactly how much app developers spent in order to acquire a single customer over a given time period. CAC is not necessarily the same as CPI, because some companies may not consider all their app’s users as customers, which are the ones generating revenues. CAC is especially important when it is compared to ARPU, allowing app developers to compute the return on their advertising spend (ROAS).
