Calculating ROI/lifetime value per install

Trying to figure out with its worth paying to acquire new users, but not quite sure the best way to figure out the lifetime value per install. I’ve monetized my app with some affiliate income, so I know clickthrough rates, install/uninstall ratios etc but how do I link all the bits of info up so I can say how much each install is worth?

There’s quite a few factors I can’t get my head around like my app drop off rate over time

To be honest… it’s shitty to try calc this. REALLY shitty.

Concerns:
Even if you know the lifetime value of a user, what does that really get you ?

  1. CPC campaigns are useless until you know how many clicks = 1 install.
  2. PPI campaigns are mostly useless because often users install an app to get points in their favorite game. Those users don’t represent your ROI value. They will probably uninstall it tomorrow.
  3. Organic traffic. Yeah, it’s great, but how much will your advertising push you up the charts so you get decent organic traffic ?

Like I said… it is a shitty calculation unless you have already done this calc for 2-3 games and have all the metrics to KNOW what really happened. And if you do… you are NOT going to share that info.

Lets say you determine how much money you get per install i.e. $0.01. It does not mean that if you pay more than you are losing money, cause you have to consider the indirect (and greatest) effect of those downloads: to rise in the rankings. To advertise will cost you at least 0.5 dollar for a non incentivized install, i dont think any app makes close to that much money per install. But if those installs makes you reach the top rankings it may be economically justified. So i could imagine there is an optimal value for the number of paid instalations; too few and you don’t get any impact in the rankings so you lose your money, too many and your are unnecessarily paying for advertise when you already got the number of installs to get to you the rankings therefore neutralizing the benefits of advertise in the first place. And there is the perfect value where the cost of that last paid installation is equal to the revenue that download generates (direct and indirectly).

Thanks, I did acutally calculate each install currently being worth about $0.01 or less. Does seem the maths for each install doesn’t really add up. I see what you’re saying though as in it could be profitable just to get you to the top of the rankings if it manages to keep you there.

Eurgh just like adsense, seems to me people are paying far too much

I think you’d be surprised :slight_smile: More than a year ago I had a simple, casual game that was making ARPDAU in the region of $0.02-0.03 so it was enough for me to retain a player for 25 days to get to $0.5 LTV (which obviously would be hard, but it was long time ago, when in-app billing wasn’t that popular on Android). And I know that game was monetised very poorly.
Last week one game dev told me they are getting $0.08-0.10 ARPDAU, on Android, in a casual game. So I would speculate that mid-core and hard-core games are making 2-4x that on a per user basis.

As for calculating LTV, it might be worth to calculate it per cohort as that would bring you a very detailed insight into what is happening in your game. Calculating LTV on a “global” basis is nice as it’s fairly simple and gives you some high-level overview but cohort analysis, especially for users acquired for $.

When it comes to drop-off rate, google D1, D7, D28 retention, it’s easy to calculate if you have decent analytics tool.

Hope it helps. Very interesting question :slight_smile:

Cheers,

Tom

Yeah on the macro-level it seems like it’s not worth it to advertise. But you gotta investigate it more to really find a profit pocket.

  • Advertise in specific countries (to reach top list for a specific country).
  • Find certain ad networks that only allow app install advertising (like Admob, Chartboost, and Appbrain). I haven’t tested, but I would guess other networks are more expensive because you’re competing with affiliates with higher margins.
  • Cut out non-converting apps you’re advertising in (like those with a lot of misclicks or nonconverting users).
  • Figure out how much you make per user on average, check out retention rates, etc.
  • And a lot more.

There are affiliate programs for app installs too, they pay anywhere from 1.00 to 2.50 an install. If you can find a network with CPI instead of CPC (like Chartboost), you may be able to churn a profit as an app install affiliate without doing too much homework.

Also, Adsense is ridiculously expensive to advertise in because it’s hyper-targeted. Advertisers are willing to pay 0.5-2.00 or more because clicks are more likely to convert.