In Appodeal, our goal is your profit, and the triumph of all your apps!
We thrive on your success, and we work very hard to fuel your apps with smart and efficient ad monetization. But first, you must boost your app’s growth and make it noticeable for your potential consumers. You must create successful UA Campaigns!
However, this task may come harder than it looks. Our support team usually receives requests from our partners, publishers & developers, asking us how to optimize their marketing campaigns better and achieve the success they deserve.
Most of the questions and tickets we’ve received go in the same direction:
- “How do I know if my UA campaign is successful?”
- “What metrics should I be watching for my UA campaigns?”
- “What is the max CPI (Cost per Install) I should pay for my app?”
- “How do I calculate the LTV of a user segment?”
- “What can I do to increase my chances of success?”
We’ve heard from you guys and, after an in-depth examination of this topic, we’ve decided to approach this question in depth.
We’re bringing you a series of articles that will help you boost your User Acquisition Campaigns: Top Strategies to Grow the Retention Rates of your Mobile Games, dedicated articles focused on Improving the CPI & ARPU of your Mobile Games, and even tips to create Video Ad Creatives for Mobile Games that just work.
And today, we’re talking about the LTV in Mobile Games; its importance in your User Acquisition Campaigns; and strategies & techniques to improve it.
Summary of this article:
- LTV: The King Metric of a successful UA Campaign!
- How to Calculate the LTV of your Mobile Game
- Improve your LTV: Track your Retention Metrics
- Improve your LTV: Optimize for Long-Term Engagement
- Improve your LTV: Segment your Rewarded Ads
- Improve your LTV: Targeted & Personalized Offers
- Improve your LTV: Data from your UA campaigns
- Improve your LTV: Virality & Shareability
- Mastering the LTV is 100% doable for Mobile Developers & Publishers
LTV: The King Metric of a successful UA Campaign!
First, we must define what “successful” means. For this article, since our focus is app monetization and User Acquisition Campaigns, we will consider that a mobile app is successful when can generate positive ROI (Return on Investment) and ROAS (Return of Ad Spending) for its marketing campaigns.
Having that in mind, as the title of the article suggests, the LTV (Life-Time Value) will be your primary revenue metric. It represents your application or mobile game’s financial value and how much each one of your users is worth during all the time that he will spend on it.
You should also have in mind the CPI (Cost per Install) that you are paying on each campaign and the ARPU (Average Revenue per User) acquired from them.
This article focuses on LTV, but you can calculate your UA campaign’s success with other relevant revenue metrics. We are going to talk about them in future articles.
How to Calculate the LTV of your Mobile Game?
There are many ways to calculate the LTV, and you must find the one that fits best your mobile app and your goal.
Calculate the LTV will be more or less challenging, depending on how many revenue sources (In-App Purchases, Advertisement, Subscriptions, etc.) your mobile app has integrated, and how many sinks have to cover (business structure, marketing campaigns, etc.)
The easiest way to calculate the LTV is to multiply your app’s ARPDAU (Average Revenue Per Daily Active User) per your users’ average lifespan. That will get you a first estimate of your LTV. However, it may not be the most accurate one.
Also, to calculate the average lifespan of a user, you need to collect data from your app, and that may be a bit difficult if your app is still not in the app stores (in tech or soft launch). In case you already have launched the app, you can create a user cohort for all the D1, D7, D15, D30 & D90 days and check the average. You could also use historical data from similar apps or user segments, though.
Still, it will depend a lot on your type of app or game, and since we do not want to extend anymore on this topic, here you have a few useful links of people that go deeper into how to calculate the LTV:
- How to Calculate the LTV, by Eugene Matveev
- Two Methods for Modeling LTV with a Spreadsheet
- How To Calculate LTV in Mobile Apps and Games
- Insights for Evaluating Lifetime Value for Game Developers
Ways to improve the LTV of your Mobile Game!
When you know your players’ value and worth, you truly understand what kind of efforts and strategies you have to elaborate on to make your game profitable.
The mobile gaming industry keeps changing every day. While more new game developers keep launching games that become super successful, it is also harder to generate income and increase the LTV.
Therefore, we have prepared a few tips and strategies to boost your users’ LTV, aligned with your User Acquisition Campaigns.
Track your Retention Metrics
You want to understand which UA campaigns are performing better and, later on, optimize and improve the most successful ones. For that, you must keep track of your retention metrics.
Your retention metrics tell what your user segments are doing. Align them with your User Acquisition Campaigns.
Identify those user segments with high long-term retention rates and find from which User Acquisition Campaigns they come from. Once you detect those UA campaigns that deliver high-value users, you can optimize them or even redistribute your overall budget to increase their reach.
Track those user segments with higher retention rates, those that surpass the industry averages, and plan different strategies for each user segment that your game has.
If you want to learn more about this topic, we have a super detailed article on Top Strategies to Grow the Retention Rates of your Mobile Games that you should definitely read.
Optimize for Long-Term Engagement
Retention is the holy grail of LTV, and optimizing your long term retention is a must.
If you have checked the previous article about top strategies to grow the retention rates, you will notice that we focused a lot on short & mid-term retention. Retention metrics is a topic where developers usually struggle. But in terms of LTV, you should look beyond the 30D retention. Create user cohorts such as D30 to D60, D30 to D90, or D30 to D180.
Once you segment them, you can check how they behaved in your mobile game and look for similar patterns in your newly acquired users from your marketing campaigns. This will help you to identify potential VIP users that, if approached gently and with care, may raise your LTV.
For that, you must plan ahead, create rich & fun content for high-level users. Do not hinder their progress too much, and develop features that are still amusing, even after hundreds of gameplay hours.
That does not mean that you shouldn’t care about your onboarding, FTUE (First-Time User Experience), or tutorial stages. Those are essential phases of the user experience that should not be ignored either, but remember that we’re focusing on LTV (Life-Time Value).
Pro-Tip: Do not push too much your IAPs (In-App Purchases) at the very beginning of the user experience, or they may think that your game is too restrictive.
You can also give a more gentle experience to those segments with the potential to become VIP. Introduce them to your game mechanics, and seduce them. Once they’ve fallen in love with your game, you’ll have plenty of time and opportunities to show them how your game can become much more with just a bit of “economic commitment.”
I understand. You want to make money, but don’t forget that your other goal is to create an amusing, joyful, and entertaining mobile game.
Segment your Rewarded Ads wisely
This strategy goes in a very similar direction to the previous section. Since you will only monetize around 2% of your user base with IAPs (In-App Purchases), It is evident that you must place ads on your game.
You should take special care with Rewarded Ads. They can boost your LTV by their super high eCPMs and increase overall engagement with specific user segments. Usually, for those users who engage with rewarded video ads during their FTUE (First-Time User Experience), the chances they spend money on IAPs (In-App Purchases) are x5 times higher.
Rewarded Ads are hard to integrate into a mobile game. When done wrong, the rewards from ads can unbalance your game economy and alter your user experience.
To avoid headaches, from Appodeal, we highly recommend you to A/B the placement, frequency, and availability of your rewarded ads. You can do that pretty quickly from the Segments section of your Appodeal Dashboard.
If you get stuck or doubt how to properly A/B test your Rewarded Ads, just take a quick look at our Wiki or contact our support team. We will guide you through it.
Targeted & Personalized Offers
Again, this is one of the things that you will have to A/B test like a mad man -or woman-. Each user segment has a different willingness to pay for each virtual product.
In mobile games, it goes without saying that the price of your IAPs should have an inherent discount when offering higher amounts of the product. If your game offers 10 coins for 1$ -or any other in-game currency-, your user will expect to get, for 2$, at least 21 coins (or at least 20 coins + something extra).
But that’s not the kind of in-game offers that will make a difference in your LTV (even though they help). Here, you must emphasize the First Purchase and the winning UA Creative.
The First Purchase is a critical metric in the user experience. You must tweak it and adapt it to each segment if you want to boost your User LTV (Life-Time Value). If you get your users to make their first purchase, you will significantly decrease your churn rates.
Game marketers often use the First Purchase Time to predict the potential LTV of a segment. Purchasing an IAP is an act of commitment, and the sooner you get it, the better.
This last suggestion may seem contradictory to what we were saying about not pushing the user to buy too often. It is, and it isn’t. We could say that you must not force the user into the first purchase, but you have to set it all properly, so the user feels pulled into spending money in your app. It’s a game of balances.
A Way to do that is to present an overwhelmingly discounted, short-time limited, one-time-only “super 80% offer”. Let’s imagine this user segment: they have just finished the tutorial and are already familiarized with your game mechanics. They get an 80% discount offer: a super bundle pack, only available for the next 2 hours.
There are only two possible outcomes:
- They purchase your Super Welcome Offer: those are probably users that know the genre, maybe have tried other games like this, or games developed by you and trust you, and they may become high-spending users.
- They don’t purchase the Super Welcome Offer: Not a lot of people will buy that. They haven’t spent that much time in your game, they’re not that involved, and they won’t even feel the value of that offer.
Once the offer expires, those who don’t purchase it may feel a bit regretful to let themselves miss that fantastic opportunity. Next time you offer them something, they may still remember the feeling of regret. Don’t show them the “Super 80% Offer” again. Now, just give them a “Still impressive 70% something”.
By decreasing to a “70% discount”, you will make them remember the opportunity they lost. They may not want to miss that offer again. And if they don’t purchase, keep lowering the price-discount while leveraging rewarded ads to tease them with the fantastic premium stuff they’re missing.
Customize with Data from your UA campaigns
In the previous example, we said that you would send a second personalized offer: the “Still impressive 70% something”.
Personalize, not only the discounted price, but also the “thing” you are offering. Let’s talk a bit more about that “something” you’re offering at a 70% discount.
Be specific. While the first bundle was very generic, the following offers have to adapt to the user’s needs. Try to offer “something” more personalized and adapted to the user’s behavior. They will perceive it as more valuable.
But how to personalize in such an early stage the game experience? The players have barely played your game, and behavioral predictions with low amounts of in-game data are tricky.
How lucky you are that you’ve acquired them through your User Acquisition Campaigns. Use the UA data to find their tastes. Look at: what your ad creatives were showing/saying, which audience the ad set targeted, which game features you were promoting, the theme of your ad campaign (such as calendar events like Christmas, or in-game events like the end of the season).
Pro-Tip: Use the information from your User Acquisition campaign to customize your in-game offers and IAP prices!
Let’s say you have three active UA campaigns promoting three different features of your game. Then, offer each user segment something that goes in the direction of the feature that each ad was promoting.
You get the point, right? Use that “something” you already know your user likes, and make each segment happier with a personalized offer. Those are the kind of things that boost your LTV.
And, of course, combine it with your In-App Advertising strategy to maximize the results.
Don’t forget about Virality & Shareability
When we say that a game has a high virality, it means that the game has mechanics or features that invite people to share the game or their experiences with their friends, family, and fools.
Users can share your game through direct recommendations, social media, or even word of mouth. Just think of the early days of Candy Crush, and everybody on Facebook requesting lives to their friends.
If you’re able to develop content worth shareable, maybe even rewarding your users for spreading the word about your game, your Acquisition Costs will decrease, and your LTV will highly increase.
In this case, don’t just think about in-game mechanics. Think about Content. Content is the King, and it does not necessarily need to be attached to your game.
Here some examples:
- You can team with popular influencers that match your users’ values and style: Let’s say you’re about to launch a game where the user is a space cowboy that must solve puzzles and quests. Try to contact YouTubers or Instagrammers that talk about the new Mandalorian series or sci-fi related content.
- You can think of mind-blowing campaigns that connect with your audience: Now, imagine that you want to promote your game in other mobile puzzle games. Create an ad that destroys the puzzles of your competitors.
- Create cross-platform campaigns: Your UA Campaigns and Ads won’t just appear on other mobile apps, but also on social media, right? Adapt your communication and push the users to keep following your space cowboy’s adventures on your Instagram, Twitter, or whatever social media. A slight adaptation of the content can do wonders.
You will probably have to reassess your player LTV to these new characteristics. If you do, just keep it as simple as possible. You don’t want to break your head with complex statistical modeling, or it will become too hard to keep track of your LTV. The easier it gets to modify, the quicker you can react and make the next moves.
Summarizing: Mastering the LTV is 100% doable for Mobile Developers & Publishers
LTV is not just a Key Metric. LTV (Life-Time Value) is the King of revenue metrics, which is why it becomes so crucial for your UA (User Acquisition) campaigns.
There are so many ways to calculate your LTV! Choosing the one that fits your game best will depend on the game itself and the time and energy you want to spend on it. Sometimes you’ll have historical data to rely on, and some others, you will have to use a more probabilistic approach.
One way or another, you’ll end up with the User’s LTV. Or even several User Segment LTV depending on how precise you want to be. Once you have it, it’s up to you to boost it. A personalized and individualized experience is the key to success.
Be creative, get inspired with some of our examples, and A/B test as much as you can. Remember that Appodeal has many A/B testing tools 100% free and available once you’ve registered. You have our wiki, our support team, and in-depth guides on how to properly segment and test in-game features, ad placements, monetization networks, and much more.
Now that you know what to do, know that we’re here rooting for you, and we want you to become a top-earning hit!
And if you’ve found this article valuable, or you have any questions, comments, or suggestions, feel free to comment & share this article on your social media!