This post was written to help bring more clarity to mobile marketers who want to find a KPI for analyzing profitability from marketing campaigns.
In case you haven’t got time to read the whole post, bookmark it and keep this set of steps in mind to ensure your campaigns are in the best shape to run profitably:
- Start by ensuring you know what time period you want to become profitable within (e.g. 1 year). This is important for giving your calculations a clear goal that can define success/failure.
- Select a KPI and correlate what the minimum acceptable level in this KPI is, in order to turn a profit within your target period of time. Some common mobile marketing KPIs include:
- Retention rate
- ARPU/ARPDAU (this is flipped, so that you may pay no more than this amount per user)
- LTV (this is flipped, so that you may pay no more than this amount per user)
- Be sure to assess your predictions within sensible user segments. For example, don’t apply the same prediction to both Android and iOS campaigns.
- As your campaigns scale, feed new data into your prediction system and continually assess your profit prediction to ensure your profit forecast is still on-target, given the latest data.
- If you feel comfortable, try exploring other methods to raise the accuracy of your model, including different attribution models and K-Factor and organic uplift analysis.
Reviewing the 4 Common KPIs
The Easiest KPI: Retention Rate
When it comes to mobile marketing KPIs, retention rate is an old stalwart and one of the most commonly used metrics for assessing success in mobile app marketing. Generally, retention rate is calculated as a ratio of users who opened the app to install-day users on a 1-day, 7-day, and 30-day basis.
Retention rate is popular because it is calculable for every app regardless of monetization method, it is easy to calculate, it can correlate decently well with ROI, and it is plentiful in data points. Yet in the grand scheme, retention rate is rather basic, and there are several downsides to retention rate:
- Retention rate can take a while to obtain final results (7-day and 30-day).