16 metrics Gaming app marketers should measure
Mobile gaming marketers live and breathe measurement — eCPI, ARPU, DAU, and so many other three-to-five-letter acronyms.
However, not all metrics are created equal.
Given the variety of KPIs to choose from, only careful selection of the right combination leads to the meaningful insights used to drive important marketing decisions.
To point you in the right direction, we’ve covered 16 metrics spanning the entire user journey.
In this post, we’ll cover:
- KPIs to measure (detailed ahead in this blog!)
- Which and how many in-app events to configure
- Selecting media sources to run with
- Creative variations
- Recommended segments
Acquisition metrics
The first hurdle of mobile marketing is to drive installs. With over 5 million apps worldwide, it’s safe to say every dollar counts.
Gaming is a particularly driving force of the app economy, with 35% of non-organic installs coming from this vertical in 2019.
One key to coming out on top is knowing the effectiveness of your ad spend in order to reduce it per user and improve ROI. That’s where the following KPIs come into play:
Effective cost per mille (eCPM)
Definition: The revenue generated per 1,000 impressions
To calculate eCPM, divide the total earnings from advertising by the total number of impressions and multiply by 1,000.
eCPM = (Total Ad Revenue / Total Impressions) * 1,000
Why it matters:
eCPM offers a basic approach to evaluating the value of your traffic and determining your CPM. Cost Per Mille is the rate a given advertiser is willing to pay for 1,000 impressions, while eCPM is the publisher earnings per 1,000 impressions.
Cost per install (CPI)
Definition:The cost of generating one new install
CPI = (Total ad spend / Total app installs from a given campaign)
Why it matters: CPI is affected by many variables, such as geography, platform, and device, and is used to determine the price of acquiring a new user.
Install Per Mille (IPM)
Definition: The number of installs generated for every 1,000 impressions. IPM is calculated by dividing total installs by total impressions and multiplying by 1,000.
IPM = (Total Installs / Total Impressions) * 1,000
Why it matters: IPM helps evaluate the performance of a campaign. The higher the IPM, the more effective it is. A low IPM may indicate low user engagement with a given creative, which means you should try and optimize targeting or change the creative itself (read more about IPM and conversion rate optimization.)
Organic conversion rate
Definition: The percentage of conversions driven by non-paid channels, such as organic search, social media, press, etc.
Organic conversion rate = (Total Organic Installs / Total Organic Clicks) * 1,000
Why it matters: Organic Conversion Rate informs your non-paid distribution power and highlights opportunities to drive new users to your app without spending on user acquisition.
K-Factor
Definition: K-Factor tells you how many organic users you get as the result of a paid UA campaign.
For example: If a game has an option for a multiplayer experience, and a user invited three friends to join who subsequently installed the app, you just earned three new ‘free’ users.
K = number of invites sent by each user / conversion rate of each invite
Why it matters: A high K-Factor indicates the virality of your app and enables you to reduce your average UA spend per user. If, for example, you paid $3 for one install, and that one install triggered two additional organic installs, you actually paid $1 dollar for those three installs (read more about organic multipliers).
Usage and engagement metrics
Retention rate, DAU, and churn help highlight the way in which users interact with your app — how often they are using it, for how long, and over what period of time. These metrics indicate whether or not you are bringing the right users and help identify problems with poor segmentation, specific level difficulty, and functionality.
By benchmarking and observing these metrics long term, you will be able to boost your segmentation and monetization strategies, as well as build a loyal user base that keeps returning to your app.
Retention rate
Definition: The percentage of players that return to your app during a defined period of time after the initial install (typically measured at 1, 3, 7, 14, and 30 days).
Why it matters: Retention rate is a key indicator of your app’s performance over time. A high rate demonstrates your game provides value to users generating repeat usage. It is the basis of monetization and a key factor in prediction models.
Retention is another key factor in evaluating the quality of your users. It helps you create UA strategies and plan budget distribution between the different media sources you work with.
Let’s say you have two media sources, A and B. On day 14 of a campaign, you notice that users coming from A have a 15% retention rate while users from B only have a 10% retention rate. Being a savvy mobile marketer, you immediately put more budget into A and tone down spend on B. After all, a higher retention rate signals better users and more revenue over time!
If users coming from Media Source A have a 15% retention rate on Day 14, and users coming from Media Source B have a 10% retention rate on the same day, it is preferable to shift more budget toward media source A.
That way, you will gain higher quality users that will play your game for a longer period of time and generate more revenue.
Churn/Uninstall Rate
Definition: The rate at which users uninstall your app within a set number of days following an install.
Churn = (Users at the beginning of a period - Users at the end of a period) / Users at the beginning of a period
Why it matters: Games suffer from the highest uninstall rates in the mobile app industry. Analyzing this KPI allows you to drill down into factors that may have led to app deletion — for example, poor segmentation or game difficulty at different levels. It also helps you to calculate your losses for acquiring those users but failing to retain them.
A high uninstall rate after a specific level or promotion may indicate that something is broken in the game flow.
Daily Active Users (DAU)
Definition: The number of unique users who use the app at least once per day (e.g. A single unique user who launches the game 3 times a day is counted as 1 daily active user).
Why it matters: DAU shows the proportion of the number of users who have installed the game and play it every day. It helps evaluate the game’s potential if you increase engagement and retention.
Cohorting DAU can also help evaluate the success of a specific new feature within the game or a feature showcasing your game in an app store.
Monthly Active Users (MAU)
Definition: The number of unique users who engage with the app over the course of 30 days (e.g. A user who engages with the game on five different days within 30 days counts as 1 monthly active user).
Why it matters: MAU Indicates the size of your user base and gives a wider perspective about this base than DAU. Besides helping with user base growth evaluation, MAU is used to calculate an important quality KPI, stickiness.
Stickiness
Definition: The number of days users visit your app within 30 days. Stickiness can be calculated by dividing DAU by MAU and multiplying by 30.
Stickiness = (DAU / MAU) * 30
Why it matters: Stickiness indicates how addictive your game is and how relevant it is for users. High stickiness shows high interest in your game and makes users visit it more frequently.
Monetization metrics
You’ve targeted the right users, identified problematic areas in the app flow and figured out how to acquire users for less. Time to sit back and relax, right? Not so fast…
Maximizing revenue is the key to longevity in an industry plagued by some of the highest uninstall rates around. Did you know that after three months, non-organic Gaming users are still not at the break-even point? The 100% mark often takes 6, and even 9, months to reach, depending on the Gaming app.
Let’s dig into the KPIs that will help you stay ROI-positive.
Average Revenue Per User (ARPU)
Definition: ARPU is calculated by dividing the total revenue generated by the total number of users for a given cohort over a given time frame (e.g. Day 30 ARPU is the average revenue generated by a user within 30 days of an install).
Average Revenue Per User is a basic KPI that’s used to monitor user value over a specific period of time, evaluate quality, and determine performance at various levels of a game.
ARPU = Total Revenue / Total Number of Users in Cohort
Why it matters: ARPU is used to evaluate player value and plan UA budgets. ARPU includes all revenue-generating events in the app, such as purchases, ads, subscriptions, and paid-for apps.
Average Revenue Per Paying User (ARPPU)
Definition: Average Revenue Per Paying User only measures players who made a purchase in the game. Accordingly, the formula is the total revenue divided by the total number of users who generated revenue.
ARPPU = Total Revenue / Total Number of Revenue-Generating Users
Why it matters: ARPPU is used to evaluate the efficiency of existing in-app purchase (IAP) events and the success of new IAP events introduced to the game flow, as well as the effect of other events on IAP revenue (e.g. the option to see an ad rather than pay).
Lifetime Value (LTV)
Definition: Lifetime Value is the revenue a user generates over the course of the entire time they play a game. It’s calculated by taking the number of days of engagement and multiplying it by average spend per day.
LTV = Number of Days of Engagement * Average Spend Per Day
Why it matters: LTV (together with ARPU) helps evaluate the total revenue, or value, of a game or user and is the strongest indication of how much can be spent on UA to meet the condition LTV > Cost.
Time to First Purchase
Definition: The time it takes a user to make their first in-app purchase after installing a game.
Why it matters: Time to first purchase helps plan IAP placements and timing during the game flow, and informs if and when to mix in-app advertising (IAA) as another to improve performance. When planning IAP placements and timing, the marketer decides when and where in the game the purchasing option appears. In some cases, adding another monetization model (i.e. in-game ads) will improve performance.
Share of Paying Users
Definition: The percentage of installers who ended up making an in-app purchase within a given time frame since the install.
Why it matters: This is an indication of quality users driven from media sources, as well as a way to measure the performance of your monetization model.
Return on Ad Spend (ROAS)
Definition: Return on Ad Spend is the metric of profitability. It is calculated as the money spent on marketing divided by the revenue generated by users in a given time frame (e.g. A Day 7 ROAS of 50% means that a player generated revenue that was 50% of the money spent to acquire that user).
ROAS = Total Marketing Spend / User-Generated Revenue in Given Time Frame
Why it matters: As a measure of profit, ROAS is the most important metric on which UA managers are judged.
For better or for worse, Gaming marketers today have no choice but to spend large budgets on UA. By constantly comparing their income to ROAS, they can better evaluate the performance of their campaigns and the quality of users they acquire.
Measuring success
While many KPIs are available for measurement, these 16 are essential for analyzing the full lifecycle of your Gaming app.
That said, each marketer is likely to have different needs: you may need to measure more, or less, depending on the sub-category you are in and the nature of the app itself.
Just keep in mind two things:
- Installs are only the tip of the iceberg. To be successful, you must look below the surface.
- Don’t over-complicate it. Less is more when it comes to measuring data over time and across user segments.
Rather than taking our word for it, take a look at the data holistically. Is it telling a story? Are you able to identify trends? With every action, your users are signaling to you what to measure. This should be your best indication of what’s important now and what will matter tomorrow.
Thanks for reading this post! Leave a comment below if you have any questions. Be sure to follow the By all measures publication to get the latest tips, tricks and insights on digital marketing, app growth and mobile UX.
This was originally posted on the AppsFlyer blog
