{"id":54,"date":"2022-07-16T13:11:48","date_gmt":"2022-07-16T13:11:48","guid":{"rendered":"https:\/\/persona.ly\/glossary\/performance-metrics\/the-cornerstone-kpis-for-mobile-ua\/"},"modified":"2023-01-04T11:35:50","modified_gmt":"2023-01-04T11:35:50","slug":"the-cornerstone-kpis-for-mobile-ua","status":"publish","type":"page","link":"https:\/\/persona.ly\/glossary\/performance-metrics\/the-cornerstone-kpis-for-mobile-ua\/","title":{"rendered":"The Cornerstone KPIs for Mobile UA"},"content":{"rendered":"\n<h3 class=\"wp-block-heading\">Valuable KPIs for running mobile ad campaigns<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">KPI stands for Key Performance Indicator. KPIs have a measurable value that helps companies understand the effectiveness of their efforts in achieving their key business objectives. In mobile marketing, KPIs are metrics that are used to assess the performance of a marketing campaign.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">In this entry, we will focus on mobile marketing KPIs and which indicators are the most valuable for both established apps as well as growing apps and why they are crucial for success.<\/p>\n\n\n\n<figure class=\"wp-block-image size-full is-style-framed\"><img loading=\"lazy\" decoding=\"async\" width=\"720\" height=\"511\" src=\"https:\/\/persona.ly\/glossary\/wp-content\/uploads\/2020\/07\/Illustration_kpi.png\" alt=\"KPIs Illustration\" class=\"wp-image-53\" srcset=\"https:\/\/persona.ly\/glossary\/wp-content\/uploads\/2020\/07\/Illustration_kpi.png 720w, https:\/\/persona.ly\/glossary\/wp-content\/uploads\/2020\/07\/Illustration_kpi-300x213.png 300w\" sizes=\"auto, (max-width: 720px) 100vw, 720px\" \/><\/figure>\n\n\n\n<h2 class=\"wp-block-heading is-style-tape-blue\">The importance of KPIs<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Setting the correct KPIs is essential to improving app performance and mobile ad campaigns. Examining retention, ROAS, or mid-funnel events (like game levels)\u00a0 can help understand where further improvement can be driven from &#8211; if there\u2019s an isolated issue that warrants changes to improve the in-app user experience or if there\u2019s a required change to the way the campaign is managed.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The most basic KPIs are the <strong>campaign indicators:<\/strong> impressions, clicks, installs, CTR, and cost. Then there are the <strong>in-app indicators:<\/strong> retention, monetization, active users, and events, and the <strong>relative and predicted KPIs:<\/strong> LTV and ROAS.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Each app uses different KPIs to measure the success of marketing campaigns, according to its goals. Different apps that rely on different business models may set different KPIs &#8211; an app that relies on ad revenue will most likely set retention rate as the most important KPI, while an app that relies on IAP might focus more on ARPU.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Retention Rate<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">One of the most commonly used KPI is the retention rate. Retention rate is calculated as the ratio of users who opened the app in several time points: install day (day 0), day 1, day 7, and day 30. This metric is used by all apps, regardless of their monetization model, it\u2019s easy to calculate, and provides useful data (such as general app performance, correlation with ROI).<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">It\u2019s an extremely useful KPI in the increasingly competitive environment of app development &#8211; it indicates users\u2019 loyalty to the app (higher retention means users keep choosing to come back to the app instead of its competitors), and when <a href=\"https:\/\/www.adjust.com\/blog\/what-makes-a-good-retention-rate\/\">around 70% of users abandon apps on the first day of use<\/a>, retaining users is challenging and critical, and therefore, retention should always be measured.<\/p>\n\n\n\n<div class=\"wp-block-group is-style-note\"><div class=\"wp-block-group__inner-container is-layout-constrained wp-block-group-is-layout-constrained\">\n<p class=\"note-title wp-block-paragraph\"><strong>Retention Wars<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Industry changes like the increasing number of apps available for download, resulting in greater competition, the capabilities of new devices, and the decrease in attention span all cause a greater challenge to retain users.<\/p>\n<\/div><\/div>\n\n\n\n<p class=\"wp-block-paragraph\">Retention rates are important but do not stand alone. There are some caveats to it.<\/p>\n\n\n<aside class=\"inline-cta\">\t<div class=\"lead lead--inline\">\n\t\t<p class=\"lead__title\">Looking for app growth opportunities?<\/p>\n\t\t<p class=\"lead__text\">Leave your email and we\u2019ll get back to you!<\/p>\n\t\t<form class=\"lead-form\" novalidate data-placement=\"inline\">\n\t\t\t<label class=\"screen-reader-text\" for=\"lead-email-1\">Work email<\/label>\n\t\t\t<input class=\"lead-form__email\" id=\"lead-email-1\" type=\"email\" name=\"email\" autocomplete=\"email\" placeholder=\"Enter your email\" required>\n\t\t\t<button class=\"button button--green lead-form__submit\" type=\"submit\">Get in touch<\/button>\n\t\t\t<p class=\"lead-form__error\" role=\"alert\" hidden>Please enter a valid email address.<\/p>\n\t\t<\/form>\n\t\t<p class=\"lead-form__thanks\" role=\"status\" hidden>Thank you for your interest! Our team will contact you with more details.<\/p>\n\t<\/div>\n\t<\/aside>\n\n\n\n<h3 class=\"wp-block-heading\">The limitations of Retention Rates<\/h3>\n\n\n\n<ol class=\"wp-block-list\">\n<li>While it doesn\u2019t take long to gain retention rates (D1 retention is also meaningful), this KPI itself does not stand on its own.<\/li>\n\n\n<li>The retention rate does not account for the length of the session (which may indicate the quality of the user or the quality of the app).<\/li>\n\n\n<li>The retention rate does not factor in the cost to acquire or retain a user. It can be used to deduct the cost of a \u201cretained\u201d user, but retention alone is not enough to conclude costs.<\/li>\n\n\n<li>Following the previous points &#8211; high retention rates don\u2019t necessarily guarantee to generate value for the business. Having a lot of users continuously using the app but not making any in-app purchases is nice to have, but not always sustainable as a business model.<\/li>\n<\/ol>\n\n\n\n<h2 class=\"wp-block-heading is-style-tape-purple\">Predictive KPIs &#8211; How to realize your acquisition potential<\/h2>\n\n\n\n<h3 class=\"wp-block-heading\">ARPU (Average Revenue Per User)<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">The average revenue per user (ARPU, AKA ARPDAU\/average revenue per daily active user) is another useful KPI for mobile marketing. ARPU can help predict the maximum amount that should be paid to acquire a new user and raise a red flag when a campaign is predicted to be unprofitable.<\/p>\n\n\n\n<div class=\"wp-block-group is-style-note-warning\"><div class=\"wp-block-group__inner-container is-layout-constrained wp-block-group-is-layout-constrained\">\n<p class=\"note-title wp-block-paragraph\"><strong>ARPU Requires Stability<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Since ARPU is the <strong>average revenue<\/strong> it can only be used to predict profitability in stable apps &#8211; where users\u2019 behavior is somewhat constant. If there are significant changes in the app or it\u2019s still in early development stages, it may be misleading.<\/p>\n<\/div><\/div>\n\n\n\n<h3 class=\"wp-block-heading\">ROAS<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">ROAS (Return on ad spend) is probably <strong>the most commonly used KPI for predicting profitability<\/strong>. ROAS is considered to be more useful than retention rate and ARPU since it incorporates core inputs of profit: revenue generation, as a percentage of the cost. Another advantage of ROAS is that it\u2019s easy to calculate (unlike LTV).\u00a0<br>Specifically, week 0 ROAS is as common a KPI as D7 retention. Since it takes only one week, while still capturing data from the different days of the week (thus factoring in the effect different days have on the performance of an ad campaign), and provides predictability, i.e actionable insights.<\/p>\n\n\n\n<div class=\"wp-block-group is-style-note-blue\"><div class=\"wp-block-group__inner-container is-layout-constrained wp-block-group-is-layout-constrained\">\n<p class=\"note-title wp-block-paragraph\"><strong>Cohort Your Users<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">When using metrics such as ROAS and ARPU\\ARPUDAU make sure to cohort your users. Cohorting your users ensures that you understand their actual revenue generation in the intended time frame and that the results aren\u2019t skewed by users who are generating revenue from other acquisition cohorts.<\/p>\n<\/div><\/div>\n\n\n\n<h3 class=\"wp-block-heading\">LTV (Life Time Value)<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">LTV is at the top of the KPI list and is known for being the most useful KPI for quickly assessing whether a campaign will turn a profit down the line. LTV encapsulates both user retention and monetization, and once it\u2019s established, it\u2019s fast to predict profitability &#8211; once CPI or cost per paying user are established.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The reason it\u2019s not as common and widely used as the #1 KPI might be related to some of its disadvantages:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>It requires the app to be established and stable. Even when it\u2019s based as an app, it takes more time and effort to calculate and maintain (requiring dedicated analysts or data scientists), compared to other KPIs.<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li>There are innumerable ways to calculate LTV and no guarantees as to which way is the most accurate, as with any prediction, it\u2019s an ongoing process with plenty of trial and error.<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Once you have an LTV model you must maintain it &#8211; making sure it\u2019s well trained but not overtrained, i.e that your predictions show actual results from a realistic group of users and not the skewed results from your most loyal and lucrative users.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading is-style-tape-blue\">Choosing your key KPIs<\/h2>\n\n\n\n<h3 class=\"wp-block-heading\">The move from D7 ROAS to LTV<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">When choosing which KPIs should determine your course of action and lead forward your UA campaigns, every marketer needs to consider the state of their app (an established stabilized app, an established app that recently went through a significant change, or an app in growth, that still requires a lot of \u2018figuring out\u2019) and choose accordingly.\u00a0<br>If your app is still at its early stages and if you\u2019re still changing and developing as you grow, focus on retention and ROAS. Connect them to meaningful events in the user journey and use them as <strong>potential indicators, not a full-proof source of truth for the future.<\/strong>\u00a0<br>If your app is established and stable, i.e has an established user journey &#8211; make use of predictive KPIs, become a <em>soothsayer<\/em>, know what to expect. This is the time to start using LTV and gain insights into the value of your users <strong>in the long run<\/strong>.\u00a0<br>ROAS, as previously mentioned, is a useful KPI. It\u2019s not too hard to calculate, it&#8217;s predictive (to a degree), it incorporates both cost and revenue, and it can be pretty quick to provide conclusions. LTV is quite a bit more complex and that\u2019s why some app developers may abstain from using it.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Why LTV is worth the effort:<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Since mobile app marketing is on the rise and data is becoming more granular, companies need to use the tools at their disposal and choose KPIs that are as relevant as possible to the company\u2019s bottom line.\u00a0<br>LTV is not easy to determine (there\u2019s no one way that is the correct way) and will likely require adjustments as the app undergoes major changes, but when it\u2019s set correctly, it can measure gross-revenue and performance over time.\u00a0<br>It\u2019s easy to invest time with the KPIs that are right in front of you, like downloads, CTR, impressions, and so on, but if your users aren\u2019t converting, aren\u2019t spending money in-app (or buying a subscription &#8211; depending on the monetization model), these interactions have no long-term value. LTV provides an overview of your users and helps determine what are realistic CPAs and CPIs.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Valuable KPIs for running mobile ad campaigns KPI stands for Key Performance Indicator. KPIs have a measurable value that helps companies understand the effectiveness of their efforts in achieving their key business objectives. In mobile marketing, KPIs are metrics that are used to assess the performance of a marketing campaign. In this entry, we will [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"parent":12,"menu_order":2,"comment_status":"closed","ping_status":"closed","template":"","meta":{"gl_intro":"","gl_hero_image":0,"gl_subtitle":"","gl_icon":0,"gl_bullet":0,"gl_terms":"UA KPIs","gl_related":[],"gl_sidebar_items":"[{\"type\":\"note\",\"text\":\"In-app events speak louder than installs.\",\"color\":\"pink\",\"url\":\"\"},{\"type\":\"image\",\"image\":30,\"frame\":\"none\",\"caption\":\"\",\"url\":\"\"},{\"type\":\"cta\"}]","gl_autolink_off":false,"gl_hidden":false,"footnotes":""},"class_list":["post-54","page","type-page","status-publish","hentry"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v28.6 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>The Cornerstone KPIs for Mobile UA - The UA Glossary - Persona.ly<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/persona.ly\/glossary\/performance-metrics\/the-cornerstone-kpis-for-mobile-ua\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"The Cornerstone KPIs for Mobile UA - The UA Glossary - Persona.ly\" \/>\n<meta property=\"og:description\" content=\"Valuable KPIs for running mobile ad campaigns KPI stands for Key Performance Indicator. 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