Key Metrics for App Monetization, App Retention and User Acquisition

Here are the key metrics any app manager for apps in particular for freemium apps should look at:
Please let me know in case I have forgotten some important metrics

Customer Acquisition
  • CPI = Cost per install  
  • CTR = Click through rates. Can vary from 0.1% to 15% depending on the invasive character of the ad 
  • Conversion rates 
    • Click to install 
    • Install to active user 
    • active user to paid 
  • CAC Customer acquisition costs = sum of direct marketing expenses of all channels 
  • Weighted CAC = In case you are boosting a game from zero to the top charts, you might want to factor in the zero CAC through organic installs.
The mobile gaming space has turned from a blue to a dark red ocean where publishers with big pockets are outspending competitors. In general the best monetizing games will justify a CPI of 70 cents. Not more. General rule of thumb: Don't spend more than 30 cents depending on the marketing channel. Users coming from an offer like Tapjoy usually will have a lousy monetization with unofficial deinstallation rates of ~80%

  • DAU = daily active users 
  • Retention (7days, 30 days) = Logins in a time interval and time usage thereof
Most mobile games level off after a couple months. Look at appannie data and you will be astonished. Mobile social games like Rule the Sky can have a life time of 18months. But this is largely due to 2 updates per month keeping users busy. Big hits like Anipang in the casual space seem to last at least 6months.

  • ARPU = average revenue per user per month
  • ARPPU = average revenue per paying user per month
  • ARPDAU = average revenue per daily active user
  • % paying users (to cumulative users) 
  • ARPDAU / DAU = ratio between average revenues per daily active user and daily active users
  • Life Time (Free and Paid) --> LTV Life Time Value
  • Time from free to paid user t{free --> paid}
  • eCPM = (revenues / total ad impressions) x 1000  --> In case you are in-app ads driven
 What I noticed are definitely some cultural differences as to how steep the balancing between free and pay can go. In Germany, users can turn the best made game launch into a total shitstorm because game balancing quite frankly started to suck after 1h of game play, forcing users to pay more than they would have ever paid for a premium game.

Profitability (Contribution margin 1) metrics
  • DAU x ARPDAU > Costs (--> Target margin)
  • LTV - CAC = Profit 
  • (LTV - CAC) / LTV = ROI 
  • NPV {LTV} Net present value of LTV --> would only make sense if you had a very long LT over two years, so that you would have to discount the cash flows. 
In case you are not having enough budget or inherent virality with the game that the average CAC per user becomes less than the total LTV, you need to control ROI right from start, especially when you have run some initial tests and now want to grow. So when you are able to boost yourself up to the top 10, a direct contribution margin might be lousy but offset by the free installations you get from organic store users.

 If you have more feedback, please add me on my David An Gplus account

Update note: 18March2014
I have found a good article called " Monetization-based Game Design: ARPDAU Contribution" 
http://quarterview.com/?p=228 with a good benchmark data


App Marketing Best Practices

I cannot think of any market in the internet economy that has the same degree of competitiveness than the app economy - in particular the mobile gaming space.

As I previously stated, the top 10 apps make of more than 44% app usage, half of revenues on iOS and Android go to 25 top publishers. This is equivalent to about 0.008% of app developers.

So I thought we need a little bit of best practice for app developers as to how they can successfully grow their user base:

Paid App Promotions 
  1. In-App Cross Promotion (using platforms like Chartboost, Applifier)
  2. In-App Advertisement (Admob, Inmobi)
  3. Incentivized Downloads (Tapjoy, Sponsorpay, Supersonicads)
  4. Special Deal Apps (FAAD, App gratis)
  5. Mobile Banner Campaigns (Adwords)
  6. Facebook Marketing (Buying fans or installations)
  7. Influencer Marketing

Public Relations 
  1. Special Interest app online magazines (Playandroid Magazine, Fettspielen Magazine)
  2. Online news magazines (like heise.de, or Golem.de
  3. Tech bloggers  (Techcrunch, Gigaom, Mashable)

Social Media 
  1. Twitter (especially working with promo codes)
  2. Weibo (leading chinese site)
  3. G-Plus (likely that it affects Google rankings)
  4. YouTube (Video trailer)
  App Store Marketing 
  1. Carrier Stores (there are 5-7 in China, 3 Stores in Korea with T-Store, Olleh, LG Uplus) 
  2. Portals (Opera, Getjar, Dolphin, Playandroid.com, Androidpit)
  3. OEM Stores (Samsung Apps)
  4. App Store Marketing Aggregators (there are companies who will do everything for you)

App Store SEO
  2. Number of reviews (stars) 
  4. Description, Name , Screenshots, Keywords

Social Graph Viral
  1. Messengers (like Kakao Talk, Line, Whatsapp APÌ)
  2. Social Networks (Facebook API, QQ)

Friends at Google and Apple 
  1. Can you bring you up to 50-60k per day per country per category 
  2. Only works if you have a top quality game

  1. Find app or website publishers who are willing to advertise your app for a revshare deal
  2. TinyCo has built the first internal program 
  3. Mobile-PS, a mobile game publishing solution and platform (not launched yet)

But most important: Have a great game that the world has not seen before!

Please comment below if you have further suggestions!