App Marketing is a thriving business industry, which has undergone a massive growth over the last year alone. In 2022, advertisers have chosen to invest billions of dollars in mobile advertising, thus confirming the great value of a well-made mobile user acquisition strategy to reach successful results.
However, to reach such effective outcomes it is crucial to define your User Acquisition KPIs (Key Performance Indicators). What are KPIs? They are measures that support your UA strategy and set clear goals for your team, so as to reach the most successful outcomes for your business. In this article I will show you some of the most important Key Performance Indicators for your UA strategy.
In addition to that, KPIs are used to carry out a deeper analysis of performance, to make sure not to spend money on increasing installation volumes but making the expenditure profitable by acquiring high-quality users.
Keeping track of the Return On Ad Spend is a helpful way to understand whether your User Acquisition campaign is successful and whether you are attracting high-quality users to your app. To give an example, as a KPI advertisers can have ROAS > 10%, meaning that they will consider it a positive performance if it reaches that value. Calculating your ROAS means to actually understand if your efforts are generating more revenues than the money you are spending on acquiring new users.
Tracking your ROAS is crucial to optimize your User Acquisition campaign, this metric will indeed help you to acknowledge how much your users spent post install and it will underline which channels have delivered the highest-value users. Monitoring your ROAS can have big benefits for your campaigns, such as choosing the best channels or optimizing your creatives. However, ROAS is focused on the short term rather than the long one. It gives you insights on a specific campaign to help you understand whether it is contributing to the overall profit.
Just as much as ROAS, ROI (Return on Investment) is a measure used to help you understand whether your User Acquisition campaign is effective or not. And yet they are quite different. ROI calculates the total cost of the advertising campaign, it means that it is basically calculating your net income. This metric is more focused on long-term profitability, in fact it takes into account the Lifetime Value(LTV) of the users rather than the ARPU (Average Revenue Per Unit). Long story short, ROI is an important KPI to be aware of, especially when thinking about optimizing your User Acquisition strategy.
Mobile games developers often assess their acquisition campaigns by tracking the ROI of newly acquired users, in a specific time frame (Day-0, Day-7, Day-30). In other words, by measuring the in-app revenues generated by new users, they calculate their ROI on the same day of installation, within 7 days of installation, within 30 days, and so on. They choose the time frames at their discretion, depending on how indicative they consider them to be of the users' LTV.
CPI (Cost Per Install) is probably one of the most used KPI, it indicates how successful your User Acquisition campaign was at producing app installs. CPI is basically a fixed cost advertisers pay every time a user installs their app as a result of an ad campaign. CPI calculation depends on several factors, such as geos and platforms.
CPI is highly influenced by users’ location, because the economic status of a particular population has an impact on how much they are willing to spend while using an app. Therefore, as proof the average CPI in the US is $5.11, whereas in LATAM stands at $0.30.
The platform utilized by users also has an effect on CPI. Generally speaking, app downloads of an iOS user are most likely to generate a higher number of in-app purchases. It is indeed considered that iOS users have a higher purchasing power, compared to Android’s ones. Therefore the CPI value for iOS app install will be higher as opposed to Android.
LTV (Lifetime Value) is a golden metric for your User Acquisition strategy, which calculates how much profit is generated from a user over their whole “life” within the app. Arguably, it is the most crucial KPIs because it can help optimize your revenue streams, such as in-app purchases. This allows marketers to allocate the budget on UA strategies without loss. This metric not only has advantages for marketers, but also for advertisers. The latter can indeed estimate the profit they are making out of an app install campaign.
To calculate LTV, app developers use in-house software and algorithms that predict how much value the user will generate during his or her entire "life" inside the app based on specific actions he or she undertakes (how many times they open the app, how much they spend during the first few days, how long they play on average each day, etc.)
On top of that, calculating LTV allows you to make more strategic user acquisition decisions, besides it is important to optimize your app install campaign and to identify the best strategies and the best channels to acquire such high-quality users.
To sum up
Key Performance Indicators (KPIs) are metrics that are calculated in order to get an accurate understanding of how well your Mobile User Acquisition campaign is doing over a span of time.There are several effective Key Performance Indicators examples that you can use to determine the success of your ad campaign, therefore, establishing the most effective set of KPIs will create an analytical foundation for strategic decision making and will help you focus your attention and budget on what is vital for your UA campaign. Let’s sum some of them up:
- ROAS (Return On Ad Spend) is crucial for app campaign optimization, it is the sum of revenue you earn for each dollar spent on a campaign.
- ROI (Return On Investment) is a metric that can help you understand whether your User Acquisition campaign is effective or not. It is focused on long-term profitability rather than short one.
- CPI (Cost Per Install) is an effective indicator of the success of your campaign, since it helps you understand how good your UA campaign was at generating installs. The higher the install rate, the more successful your campaign was at reaching the accurate target.
- LTV (Lifetime Value) is a key optimization tool, because it can support you to make better UA decisions.