Measuring Mobile Marketing LTV ROI Guide AppsFlyer

The Complete Guide to
MEASURING MOBILE
MARKETING LTV & ROI
September 2016
Chapter Whats in the Guide Page
1 INTRO: THE GOLDEN FORMULA...................................3
2 USER LTV..............................................................................5
Monetization........................................................................................................5
Retention............................................................................................................ 12
Organic / Virality............................................................................................. 18
10 Tips to Optimize Your LTV.......................................................................... 22
3 USER COST.........................................................................27
Cost Measurement.............................................................................................28
6 Media Buying Tips for App Advertisers...................................................... 30
4 FINAL THOUGHT ON ROI.............................................. 37

Measuring Mobile Marketing LTV & ROI
CHAPTER 1
INTRODUCTION
App marketing is a daunting task. There are around two million apps both
in the App Store and Google Play, and the app discovery process is largely
broken. In fact, 99% of developers can no longer rely on organic traffic to
grow their app.
Mathieu Nouzareth of music trivia game SongPop, was recently quoted in

TechCrunch with a precise description:
There are only a few ways you can have your app discovered:
a) You pray and hope that a miracle happens
b) You are featured by Apple
c) You reach out to journalists
d) You take matters in your own hands and you decide
to invest in marketing campaigns.
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And heres the challenge -- and the catch: a developer cannot rely on organic
installs, but still needs them to be ROI positiveeven if the organic multiplier
is as low as 1:0.3 (when 1 non-organic install generates 0.3 organic installs).
Ultimately, it all comes down to one golden formula:
User Lifetime Value (LTV) > User Cost* = Positive ROI**
* Refers to all marketing costs including UA and retargeting

** ROI only includes return on marketing spend
The good news is that mobile measurement has come of age so app
marketers today can track the effectiveness of their campaigns from
A-to-Z. This guide will show you how each component of the formula can
be properly measured and optimized to reach a positive ROI, and beyond.
STILL LEARNING THE ROPES OF MOBILE ATTRIBUTION?

CLICK BELOW AND GET OUR BEGINNERS GUIDE
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CHAPTER 2
LTV
Lifetime value is the cornerstone of your marketing budget. Youll know your
spend cap if you know how much value to expect from your average user.
There are a few ways to measure LTV but regardless of the exact formula,
there are three factors you need to look at: monetization, retention and
organic (virality).
Monetization
App monetization is tough. In fact, 60% of app developers are poor.

To avoid the app poverty line, developers must capitalize on any
available source of revenue: in-app purchases, advertising, paid-for
apps, and subscriptions.
In recent years, weve seen a clear trend dictated by a freemium-

dominated model: in-app purchases and in-app advertising are climbing,
whereas paid-for app revenue is dropping.
100
75
Share of Revenue
50
25
0
2011 2012 2013* 2014* 2015* 2016* 2017*
Advertising In-app purchases Paid-for
Sources:
Gartner, TechCrunch
Statista 2015
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Revenue Measurement
In order to be in a position to properly optimize your revenue streams,

it is highly recommended to track every single revenue event with your
measurement partner, and connect it to attribution data so you know
which source is responsible for that revenue. But what constitutes
a revenue event and what types of revenue events can be measured?
Lets break it down.
Standard in-app purchase event: By adding a few lines of code

from your measurement partner into the SDK within your app, youll
know when a user made an in-app purchase and which media source
acquired/re-engaged that user. If you want to run an action-driven
CPA campaign, youll need to set this up to get proper reporting on
post-install conversions.
It is also important to ensure that your media and service partners

(i.e. analytics, A/B testing, automation) are integrated with your
measurement provider and that this data is sent to them for the
purpose of optimization as well as the ability to use the data in
advanced audience targeting campaigns (with select partners).
Rich purchase events: Keeping your in-app event tracking at a basic

level will only scratch the surface of what you can do with your
data. So instead of measuring only standard revenue events, which
basically tell you whether a purchase was made, you can enrich the
event by adding multiple parameters that will tell you so much more
about who, when, where, what is being bought, for how much and
how often.
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For example:
TRAVEL BOOKING EVENT
Booking Booking
Purchase type (flight)
Class (Business)
Destination (Madrid)
Revenue (499)
Currency (USD)
Customer user ID (1234)
Date (4/29)
BOOK BOOK
Basic In-App Event Rich In-App Event
GAMING PURCHASE EVENT
In-App Purchase In-App Purchase

Purchase type (extra moves)
Revenue (0.99)
Registration method (FB)
Currency (EUR)
Customer user ID (5678)
Date (4/15)
PURCHASE PURCHASE
Basic In-App Event Rich In-App Event
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Custom revenue events for paid apps and subscriptions: If your app is
right for these models, set up a custom revenue event to measure incoming
revenue and understand how successful your strategy is (or isnt).
Although the paid model is in decline and the market is dominated by free
apps, charging for your app can work if your content is unique, if your app
is licensed by a top brand and / or if your app operates in an area where
there is more demand than supply.
When it comes to subscriptions, Apple placed this model in the spotlight in

its recent Worldwide Developers Conference, announcing that developers
of all types of apps will be able to monetize through this model. It also said
developers would get a larger cut after one year (increasing from 70% to
85%).
The subscription model makes LTV modeling much more predictable, and
as a result youll be able to increase the capacity to spend money profitably
on paid marketing. However, dont forget that this model works best with
apps that provide ongoing value to users or offer regularly updated features
or content. Consumers dont want to pay a monthly fee for simple utility
apps like flashlights, currency converters, etc.
Also, remember to dedupe activations from different devices that go

through the same account (in most cases, charges are per account, not
per device).
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Out-of-app revenue events: If a user acquired by a specific media source

went on to make purchases on your brands desktop or mobile website,
or even in the physical store, youll want to know about it as it will have a
significant impact on that users LTV and the LTV of the acquiring source.
This is done by setting up a server-to-server In-App Events API, which

will allow you to automatically send these events to your measurement
partner. The following illustration explain how this works:
User buys out of app

User clicks on User installs User registers
(uses unique ID like
app install ad app in-app
email or loyalty card)
Attribution company Developer matches Developer sends

sends developer attribution ID to its own revenue event
unique identifier identifier entered during to attribution provider
registration (email,
loyalty card number)
Out-of-store revenue is connected to acquiring source for

accurate measurement of its value and the users LTV
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Ad monetization measurement
Like in-app purchases, the use of in-app advertising as a revenue channel
is growing as developers seek to monetize their own inventory. This
can be done by working with:
yy Ad networks: Act as intermediates between advertisers and publishers,

and help package and bundle, and sell ad inventory from multiple
apps or media properties to media buyers.
yy Mediation platforms: Connect publishers with multiple ad networks

simultaneously while streamlining the integration process. Mediation
enables sellers to set priority for serving ad networks demand
depending on their price, geography and other parameters. This
technology is ideal for big publishers with lots of impressions to sell;
but make sure you understand and have control over how different
ad networks are ranked and prioritized.
yy Supply-Side Platforms: Technology platforms that are used by

publishers to programmatically sell ad inventory. SSPs connect to ad
exchanges, and may consolidate different sources of demand. SSPs
can be used to sell inventory at scale and optimize fill rate, and may
go hand in hand with a mediation solution.
Networks/mediation platforms often fall short when it comes to reporting.

The vast majority of them provide analytics on an aggregated level only,
with breakdown by geo and date. That leaves app developers in the dark
as they dont have data thats sliced by acquisition source.
Furthermore, without user level data, an app developer wont be able to

measure ROI properly. If the app made $10k on its inventory during July,
it wont know which users contributed to this ad revenue, and what was
their acquisition cost.
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With their mission to offer app developers complete transparency and the
deepest insights in real-time or near real-time, some mobile measurement
companies provide deeper analytics, including breakdown by specific
acquisition source and LTV measurement that incorporates ad monetization
revenue. This enables UA managers to optimize their campaigns based on
accurate ROI figures.
In addition, knowing that specific users acquired from a particular media

source generated ad revenue enables app marketers to be far more precise
in their selection of UA sources, while contributing to the optimization of
their own inventory (for example, by excluding users who never engage with
ads, and rewarding the users who produce significant revenue from ads).
Once you have revenue data properly measured from all sources, you can
decide how you want to calculate the average revenue per user: ARPU;
Average Revenue Per Daily Active User (ARPDAU - for daily usage apps);
Average Revenue Per Monthly Active User (ARPMAU - for non-frequent
usage apps). More importantly, with troves of revenue data at your finger
tips, you can optimize what is at the heart of your business.
Retention
With more options than they can handle, people are using less and less
apps and when they actually use apps they do it less and less often. This
harsh reality holds true for the vast majority of apps.
Since retention is the basis of monetization, maximizing the value of your

users without measuring it will range from difficult to impossible. Tracking
is done by setting up a standard app open event (some providers offer
this built-in their SDK), which will tell you the circumstances under which
users came back to your app, as well as the media source they originally
came from (by extension, youll also be able to determine which users did
not come back).
To put yourself in a position to maximize your retention rates, youll need

to measure usage on a granular level. This starts with setting up the app
open event, after which you should:
yy Measure more campaigns, GEOs, cities, media sources, publishers,

sub publishers, ad groups, etc. The more you break down your
retention data, the deeper youll be able to dive in order to pinpoint
key insights. For example, if a specific geo is underperforming, break
down to city level, locate the poor performers and remove them.
yy Define KPI milestones to understand the relationship between

retention and funnel progression (e.g. in gaming: tutorial completion,
registration, level 5 success, level 10 success, in-app purchase; or
in e-commerce: category, product, add-to-cart, purchase). It is
particularly important to know at which point an active user suddenly
becomes inactive so you can encourage them to continue using
your app by offering a special promotion, a discount, etc. And on an
aggregated level, if youre seeing a significant drop after a certain
stage in your funnel, you probably need to change something in
the app itself.
Product visits
Add-to-cart visits
Category visits
Purchases
Define activity cohorts: Cohort analysis tells us if user engagement

is actually improving over time or only appears to be improving
because of growth metrics (with standard retention, the inactivity
of old users can easily be hidden by growth driven by new users).
There are two types of cohorts: acquisition cohorts and activity

cohorts. Acquisition cohorts divide users by when they first started
using your app so you can understand which users leave and when.
But if you want to reach the next level you need to understand
why. For that purpose, there are activity cohorts. These divide
users by actions performed in-app within a given time period. For
example, Install, app open, uninstall, initiated checkout, transaction,
transaction value, or even custom events like used feature X or
did not use feature Y.
Once again, the more you measure, the deeper you can go in your
analysis and the more options you have to optimize. So when defining
an activity cohort you should filter by specific GEOs, media sources,
campaigns, cohort size, ad groups, etc.
The following chart shows an activity cohort sliced by media source:
Average Sessions Per User
Network A
Network B
Network C
Network D
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 Days
Ensure deeplinks are in place so you can properly measure

communication with existing users through owned channels like
email and push notifications (86% of emails are opened on a mobile
device, while push messages improve retention by 2X). This form
of dialogue is a key element in continued usage and good retention
(or lack of it if youre over-exposing your users).
Deeplinking and deferred deeplinking will also deliver a streamlined

user experience as its what users have come to expect. Any glitch
or friction in the experience, and you risk losing users. For example,
users will get frustrated if they click on your email promotion and
get taken to the app store, even though they already have your
app installed. Or if a user clicks a promotional link and has your app
open in the home screen instead of a specific screen relevant to
the content or promotion, you are not meeting user expectations.
How can we prevent these glitches from happening? This is done

by querying the conversion data from your attribution provider so
you know which page to show the user when the app opens (this
may sound trivial, but it certainly isnt in apps). Conversion data
opens the door to personalization as you can customize the user
experience based on all the information on the tracking link, so
theres no need for a promo code.
Lets explore the following example of a tracking link:
http://___.com/id12345678?pid=applift&c=camp12&sub1=15&sub2=
18&dp=scheme://Path
App ID = 12345678
Media source = AppLift
Campaign 12 = Spring Sale
Sub 1 = % of discount
Sub 2 = Category type
Path = Scheme of landing page within app
Based on the configuration determined by the advertiser, this scenario describes

a user clicking on an app install ad for app 12345678 offering a 15% Spring
Sale discount for [category type] running shoes. The user then installs the app
and, on first launch, the app opens in the running shoes category screen with
a 15% discount.
yy Measure retargeting (re-engagement) attribution and post interaction

engagement: With retention rates dwindling, and the understanding
that holding on to your existing users - especially the valuable ones - is
key, the use of retargeting on mobile has almost doubled from 54% to
82%. Measuring mobile retargeting attribution is done by matching the
attribution providers parameters on a deeplink, or through a device ID
if a deeplink isnt available. Once the attribution is registered, any post
interaction engagement is tracked to measure the value of the retargeting
campaign and the total user LTV beyond the initial re-engagement.
Deeplinking technology and the ability to query conversion data can also
turn a retargeting campaign into a personalized retargeting campaign.
As such, when a user searches for a flight to London and then later
clicks on an ad with a London flight offer, a screen appears displaying
that relevant content when the app opens, ensuring much higher
conversion rates (check out 6 Hacks to Make the Most of Retargeting
on Mobile for more).
yy Track uninstalls: When users uninstall an app, its much worse than
simply not using it. This can often signal a serious breach in trust or
a poor experience. Tracking high or low uninstall rates to a media
source offers important marketing insights. In addition, knowing when
and why users uninstall apps is another KPI you need to measure,
so make sure your attribution providers SDK includes this ability.
Organic (virality)
In the early days, paid acquisition was primarily used to boost the
number of organic installs through burst campaigns. This was possible
because the number of installs had a significant weight in the app
stores discovery formula. But in the last couple of years, this factor is
far less important, while quality-driven parameters like ratings, reviews,
usage, and uninstalls are pulling more weight.
As a result, the organic multiplier (the number of organic installs a

developer can expect from a non-organic install) is well below what
it used to be a mere two years ago (0.2-0.4 is not an uncommon
occurrence nowadays). To make matters worse, with 1.5-2 million apps
in Google Play and Apples App Stores, app discovery has become
largely broken. As such, non-organic app installs, especially by valuable
users, are now a vital part of the mix on their own, and not simply a
tool to drive organic traffic.
Despite the diminishing prospects of getting organic traffic, you still

need it to be ROI positive. Even if the multiplier is at a low point, you
must optimize towards getting as many organic users as possible. With
CPI rates ranging from $1-$4, its extremely unlikely that the LTV of the
average user can surpass that, so you need to get those free users to
reduce your Effective CPI (eCPI).
Heres what you need to do to properly and accurately measure organic

data so that you can be in a position to maximize its potential:
yy Work with Facebook and Twitter Measurement Partners: Without a

Mobile Measurement Partner (MMP), you wont be able to separate
organic from non-organic traffic on these social networks. Instead,
youll see non-organic installs as organic ones. Being able to accurately
identify organic users coming from two of the top media sources
in the ecosystem is an absolute must. Beyond that, an MMP will
allow you to:
yy Measure organic traffic from Twitter without a tracking link so if

users share an app store link with their friends, it can be tracked
yy Calculate Twitter and Facebooks organic multiplier so you know

how many organic users a paid social user can generate
yy Automatically configure advanced audience campaigns for your

organic users to maximize their potential. For example, Custom
Audiences to keep them engaged, and lookalike targeting to find
more quality users like them
yy Utilize rich in-app events to granularly measure what your organic

users are doing in your app
yy Set up deeplinking to properly track user invites: Know which

GEOs, platforms, channels, and types of promotions deliver the
highest number of invites (and which do not).
For example:
http://___.com/id88888888?pid=applovin&c=campA1&sub1=987
654321&sub2=US&sub3=SMS//Path
App ID = 88888888
Media source = AppLovin
Campaign = A1
Sub 1 = user ID
Sub 2 = Geo
Sub 3 = Channel
Path = Scheme of landing page within app
Based on the configuration determined by the advertiser, this link

will inform an advertiser that a user was acquired through campaign
A1 (April Friend Connect), that it happened in the US via the SMS
channel, and that the invite was sent by customer 987654321 so
the advertiser can reward him/her with a $10 gift card for their next
purchase.
yy Make sure you gain access to organic raw data reports so you can
slice and dice the numbers at any level to find key insights about
your organic users
yy Track keywords that drove organic installs from Google search and
Google Play to gain valuable insights that can inform your keyword
optimization
yy Test multiple variations of your app store page with different

keywords, descriptions, titles, images, videos etc. to find the top
converting version/s
yy Define and track organic cohorts to understand what characterizes

organic users and what kind of activities they perform in-app and
under which circumstances
10 Tips to Optimize Your LTV
1. Go beyond last click attribution: Just because a source did not deliver
the last click does not mean it does not have value! On the contrary,
understanding the impact of previous touchpoints will change your
ROI calculations. After all, for users to convert they have to be driven
down the funnel. So if a media source delivered 125 so-called install
assists and 75 installs as the last click, the return from that media
source is obviously higher than the 75 installs.
FIRST ASSIST
User is exposed to an ad for the
first time on network X
SECOND ASSIST
User clicks on an ad but
doesn't install the app
THIRD ASSIST
User clicks on a similar ad for the
same app but still doesn't install it
LAST TOUCH - GOAL!

User searches for the app, clicks on a text
ad and completes the installation
2. Set Up An API: Setting up a push API is the best way to make the
most of data at scale. Practically all big players and those who are big
on data rely on a push API that feeds data into their internal BI systems
in real time so they can make rapid changes in their campaigns.
3. Separate UA from retargeting in LTV calculation: Understanding

the effectiveness of each activity offers important insights.
The following example best illustrates this point:
UA Re-engagement +3 days +10 days +32 days

campaign install campaign $10 Purchase $12 Purchase $21 Purchase
click click+app open
30-day re-engagement attribution window
Lifetime install attribution window
In this case, credit will be given to the re-engagement campaign after

the user clicks and opens the app. But when it comes to LTV calculation,
there is a clear distinction between UA and re-engagement:
Event A (+3 days) Event B (+10 days) Event C (+32 days)

Campaign Attribution Attribution Attribution
LTV
UA True True True $43
Re-engagement True True False $22
To prevent duplication, make sure any events that occur within the
re-engagement window are marked as Primary to enable simple de-
duplication.
4) Ensure best possible fraud protection: Whether your own safeguards,

those of a specialist anti-fraud provider and / or your measurement
company, youll need to have the right tools in place to minimize fraud.
Without them, your LTV calculations can be significantly tainted. This
includes prevention mechanisms (such as active IP filtering), detection
tools (centered on access to raw data to track anomalies) and in-app
receipt validation to remove illegitimate purchases as they happen. On
a different note, only run campaigns with media sources you trust, and
demand complete transparency from these partners including a site-
level drill-down. (For more on fraud, check out our Mobile Ad Fraud:
What You Need to Know guide.)
5) Set frequency caps based on user type: Dont show more than a
couple of ads per day to your paying and other quality users. Instead,
show the non-paying and low LTV users more ads per day. In any case,
track your exposure carefully to find the ideal number of ads to serve
to each segment and never overexpose.
6) Pass metadata such as gender, age, zip code, latitude/longitude,

income and any other data point that your users have clearly agreed
to share. Your app will often be eligible for more campaigns if you pass
available metadata with each ad call. This data will be used to connect
your users with relevant advertising based on the data they choose to
share with you. The greater the relevancy, the higher the eCPM, and
that means more money for you.
Also remember that its important to look at eCPM and fill rate. If an
ad network has a really high eCPM but a low fill rate, it may make you
less money overall compared to an ad network with a lower eCPM, but
higher fill rate (assuming impressions are equal).
7) Minimize discrepancies to ensure accurate LTV calculations:

Since different platforms use different timezones, discrepancies happen
- especially if data is sliced by hour or day. What often happens is that
data tracked by one platform spills over to a previous or following day
or hour in another platform. For example, lets say platform A records
timestamps based on a GMT timezone, while platform B is set to a
PST timezone. In such a case, data from 12:00am-6:59am GMT will be
marked as 17:00pm-11:59pm in PST the previous day!
If alignment between different platforms cannot be achieved, it is

recommended to use a wider time frame (but not too wide) so the
hourly difference between timezones becomes negligible two weeks
can be good (click here for more examples of discrepancies and how
to minimize them).
8) Use a centralized ROI dashboard: With all your ROI data in one
place, you will be able to compare apples to apples and avoid trying
to consolidate data in excels from multiple sources - which only
cause multiple headaches as a best case scenario, and errors in ROI
calculations in the worst case scenario. In addition, when your ROI
data is centralized under the roof of your attribution partner, youll
know that cost is only recorded after an install is driven by a network
with the last click (if running on a CPI model). A networks dashboard
will record cost upon install, even though it may have not delivered
the last click.
9) Leverage the power of your CRM data to run smarter re-engagement

campaigns targeting your existing or dormant users. Your 1st-party
data can also boost the number of organic installs by telling you exactly
which rewards / messages best resonate with which type of users so
that you can better optimize your user referral program. After all, your
best customers are helping you drive leads and acquire customers.
Knowing who is referring new business to your app, tracking their
referral activities, rewarding them, and forecasting LTV with referral
activity makes your CRM a mighty revenue driver.
10) Measure Properly! At the risk of repeating ourselves, put yourself

in a position to have a trove of granular revenue-related data that you
can analyze and act upon to boost your average users LTV (look no
further than this guides previous section for much more).
CHAPTER 3
USER COST
The part where money pours out of your pockets plays to a very different
tune than when money comes into your pocket. So far, weve discussed the
latter with revenue measurement and optimization. Now, well focus on an
equally important part of the equation: the measurement of cost and how
to be as efficient as possible in order to boost your ROI.
Native $2.5 CPM Banner $1 CPM
Video $3 CPM Search ad $2 CPM
Cost Measurement
There are three main methods to monitor your cost data: manually on
your own excel dashboard, on your media partners dashboard, or the
dashboard/API of your mobile measurement partner.
Whatever the method, it is important to properly define the business

model and different rates you agreed on with your media partner, including
breakdown by geo, quality of inventory (incentivized vs. non-incentivized,
premium vs. non-premium). Dont forget to continuously monitor that
you are billed accordingly.
Other considerations to take into account include:
yy Breakdown of cost: Dont settle for getting cost data per campaign;
instead demand access to cost data by ad group, creative variation,
and also by geo and publisher. The greater the granularity, the more
data youll have to work with for optimization.
yy Tracking cost in your measurement partners dashboard: It is highly

recommended to have all your cost data in a single dashboard. This
will enable a proper apples to apples comparison, and ultimately a
proper measurement of your effective cost across different partners,
channels, campaigns, etc. It will also dramatically reduce the risk of
error when trying to consolidate it all on your own.
yy Passage and tracking: Demand your media partner to pass cost

data to your measurement provider. Make sure that the former can
dynamically pass different cost parameters like pricing model, value
and currency on the link (or API if supported), and that the latter
can properly track this information, and record it as money spent if
the media source in question is credited for the install or post-install
conversion (in CPI and CPA campaigns, respectively).
yy Cost data from Facebook and Google: The top two networks in
mobile advertising require a unique integration through an API to
pass cost data to their official measurement partners.
6 Media Buying Tips for App Advertisers
In a crowded marketplace, many mobile media companies have significant

overlap in their offering to the market. While some consolidation has occurred
in recent years, the mobile app ecosystem will still lack standardization,
transparency, and accountability for the foreseeable future. Here are
some tips to help you navigate the jungle of todays mobile media buying
environment:
1) Understand the mobile ad value chain: Its not uncommon for providers
to fulfill or appear to fulfill various roles both on the demand and
supply side. That creates all sorts of problems, especially since a lack
of standardization in terminology and technology can make it hard
to understand who exactly does what. For example, an app publisher
may offer ad inventory directly through an in-house sales team, and a
supply-side platform may be connected to an entity that sells media to
advertisers. For this reason, it is more important than ever for marketers
to get a thorough understanding of the specific services their potential
user acquisition partners offer, their affiliations with other parties, and
their business model.
DEMAND SUPPLY
Data Management
Platform
Demand-Side
Platform Ad Exchanges
Supply-Side
Platform
Advertiser
Agency/ Publishers
Trading Desk
Meditation
Platform
Ad Networks
2) Balance pricing models that reflect your UA goals with scale:

While significant progress has been made in evolving from the traditional
cost-per-mille (CPM) pricing for digital ads, focusing on pricing models
that truly reflect their UA goals can be a challenge for app advertisers. It
is clear that for most advertisers, the install is secondary in importance
to a relevant in-app action like adding an item to a shopping cart or
creating an account. This means that in most cases, cost-per-action
(CPA) pricing can be seen as the superior model for value-driven UA.
Nonetheless, cost-per-install (CPI) remains the dominant pricing option
for user acquisition campaigns.
There are multiple reasons for this: Most importantly, there are fewer supply
sources that support CPA pricing compared to other models. Because
there are so many takes on what defines a qualifying user action, its very
difficult to compare or predict CPA performance.
Even setting this aside, if the action is located deep in the user funnel, it
can seriously hurt the chances of an ad winning an auction, even with a
very high CPA cost as the conversion rates are low. This is especially true
in the programmatic world, where most auctions are based on a CPM or
cost-per-view (CPV) model. In these settings, the conversion into CPI or
CPA-based pricing may be done by demand-side-platforms, which then
assume the risk of not meeting their conversion goals.
For advertisers, this means that they may have to combine multiple pricing
models to achieve significant reach and scale with their campaigns, and
then monitor and compare the quality of the incoming traffic against their
actual conversion goals using their mobile attribution tracking provider.
3) Get a realistic outlook on campaign reach and targeting: Working with

as few supply partners as possible makes for a simpler media buy. This is
why many ad networks make audience reach numbers a key component
of their sales pitch. While scale is certainly a factor to consider, you should
be wary of inflated projections for how many relevant users an ad network
can reach for your specific app.
The ubiquity of ad networks and the competition for advertising dollars

has created a situation where publishers usually work with multiple supply
sources to maximize their ad revenue. For advertisers, this means that there
can be a significant overlap in audiences between different ad networks.
It may also mean that, while an ad network is technically integrated with
a specific publisher, it cannot guarantee that it can actually place ads in
their app.
Thats why its a good idea to inquire directly with the ad networks about
the performance of past campaigns for apps similar to yours. You should
also try to get a good understanding of what individual apps are included in
the media plan offered to you, and how much traffic each app is delivering
once your campaign is running. This helps you assess whether your ads
are seen in the right apps, and at the scale you expect.
December 2015 Mobile Media Plan
4) Allocate resources to monitor your media buys: Weighing the desired

level of control over your mobile user acquisition strategy versus the
associated cost is a major consideration for any app advertiser. While
mobile-first advertisers tend to dedicate in-house resources and build up
a highly specialized UA team, working with a mobile agency to handle
the media buying can be a viable solution.
In some instances, ad networks will have policies in place that limit the
advertisers options in choosing between managed and self-serve media
buying. For example, some smaller networks may provide very little
transparency into where specific ads are running, and therefore push
advertisers to always go managed. On the other side of the spectrum,
larger players may impose relatively high spending minima before offering
an advertiser to move from their self-serve platform to a dedicated
account manager.
No matter which setup works best for you, it is imperative that you allocate
in-house resources to cross check KPIs reported by ad networks with
the data from your mobile attribution provider. This way, you can act
on optimization opportunities on the spot either from your self-serve
tool, or in collaboration with your mobile agency or account manager.
5) Consider a user-focused approach to media buying: The traditional

form of mobile media buying revolves around a service provided by
ad networks by which advertisers can purchase pre-packaged ad
inventory at scale. It can be based on many criteria, including vertical
(i.e. casual gaming apps), user demographics (i.e. apps used mainly
by young females in the US), and more. In recent years however,
the increasing automation of the media buying process through
programmatic technologies made it possible to execute transactions
on a per-user level.
Rather than targeting the entire audience of a specific media property,

ads can be delivered only to a set of users who are most relevant
to the advertiser. Today, this form of media buying has become the
dominant model in the digital industry, both on mobile and desktop,
and increasingly on TV.
US Mobile Programmatic Display Ad Spending, 2014-2017

billions. % change and & of total mobile display ad spending
234.3% $21.22
$15.45
118.2%
$9.68 78.0%
69.0%
$4.44
60.0% 59.6%
46.0%
37.3%
2014 2015 2016 2017

Mobile Programmatic Display Ad Spending
% change % of total mobile display ad spending
Note: mobile display ads transacted via an API, including everything from
publisher-erected APIs to more standardized RTB technology, includes
native ads and ads on social networks like Facebook and Twitter;
includes ad spending on tablets
Source: eMarketer, April 2016
www.eMarketer.com
Advertisers can greatly benefit from a user-focused approach to media buying

if they leverage capabilities to specifically target (and re-target) users that
are most valuable to them, independent of traditional demographics and
verticals. At the same time, a more automated media buy both enables and
requires a truly data-driven approach. For mobile user acquisition campaigns,
attribution providers deliver this data with consistency for every impression, in
real time. By connecting advertisers with their buying tools, data management
platforms, and their media sources, they provide transparency and fuel an
informed media buy.
6) Leverage your buying power on private programmatic marketplaces

Programmatic buying is often equated with an open auction model, and
Real-Time Bidding in particular. While it is true that many programmatic
technologies make use of the ability to create an open marketplace where
multiple sellers and buyers are bidding on inventory in near real-time,
creating a pricing structure shaped by supply and demand, this view is
far from complete.
The desire from advertisers and publishers to differentiate premium from

remnant inventory has led to the emergence of a number of alternate
types of programmatic markets, from Invitation-Only (auction with limited
number of select advertisers who get first-look option) to Automated
Guaranteed (direct selling of inventory at a fixed rate through an automated
system), and Unreserved Fixed Rate (first-look option provided to select
advertisers at a fixed rate with no obligation to buy).
On these markets, advertisers with high user acquisition spend, or who are
represented by sizable mobile agencies can leverage their buying power
to get better deals, access to quality publishers with premium inventory,
guaranteed performance or exclusivity, and more while benefiting from
a streamlined programmatic buying process.
Type of Pricing Participation Other Terms Other

Inventory (Fixed, (One Seller-One Buyer, Used in Market Considerations
(Reserved, Auction) One Seller-Few Buyers,
Unreserved) One Seller-All Buyers)
Programmatic guaranteed
Programmatic premium
Automated Guaranteed Reserved Fixed One-One
Programmatic direct
Programmatic reserved
Prefered deals Prioritization

Unreerved Fixed rate Uneserved Fixed One-One Private access in the ad server
First right of refusal Deal ID
Data usage
Private marketplace Transparency
Private auction to buyer
Invitation-only Auction Uneserved Auction One-Few Price floors
Closed auction
Private access
Real-time bidding (RTB)

Open Auction Uneserved Auction One-All Open exchange
Open marketplace
Source: Interactive Advertising Bureau
CHAPTER 4
FINAL THOUGHT ON ROI
The first mobile app wave was all about user acquisition and getting
as many users as possible to download an app. At present, were in the
midst of the second app wave, which is centered on engagement and the
understanding that getting users to download an app is only step one.
More importantly, step two is about getting users to actually use an app,
continuously, among a sea of apps out there.
The third app wave is about monetization and ROI. Its about maximizing the
value of engaged users and measuring each and every users contribution
to an apps bottom line. However, the vast majority of app developers and
marketers have yet to jump on this wave. But with the understanding that
measuring mobile ROI is completely within reach - which is exactly what
this guide has sought to communicate - it is only a matter of time before
they catch the perfect wave.
About AppsFlyer
AppsFlyer is the leading mobile attribution and marketing analytics
platform, measuring more than $4 billion in mobile ad spend annually. Over
10,000 app marketers, agencies and brands use our proprietary solutions
to measure and optimize their performance. With over 2,000 integrated
ad networks, and as an official measurement partner of Facebook, Google,
and Twitter, AppsFlyer provides marketers with unbiased attribution,
smart deeplinking, mobile campaign analytics, in-app tracking, lifetime
value analysis, ROI and retargeting attribution for over 250 billion mobile
actions each month. Clients include Playtika, IHG, Alibaba, Baidu, Trivago,
Macys, Samsung, DeNA, and HBO.
WANT TO LEARN MORE ABOUT

MOBILE ATTRIBUTION?
VISIT US
About the Author

Shani Rosenfelder is the Content Marketing Lead at
AppsFlyer. He has over 10 years of experience in key
content and marketing roles across a variety of leading
online companies and startups. You can follow him on
LinkedIn.
Contributing Writer
Jasper Radeke is the Director of Marketing, North America
at AppsFlyer. With 7+ years of experience in mobile and
digital marketing, his goal is to drive the evolution of
mobile advertising by making it more transparent and
measurable. You can follow him on LinkedIn.
VISIT US IN:
Berlin
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The Complete Guide to

1 INTRO: THE GOLDEN FORMULA...................................3

10 Tips to Optimize Your LTV.......................................................................... 22

6 Media Buying Tips for App Advertisers...................................................... 30

4 FINAL THOUGHT ON ROI.............................................. 37

Mathieu Nouzareth of music trivia game SongPop, was recently quoted in

a) You pray and hope that a miracle happens

b) You are featured by Apple

c) You reach out to journalists

d) You take matters in your own hands and you decide

to invest in marketing campaigns.

Ultimately, it all comes down to one golden formula:

User Lifetime Value (LTV) > User Cost* = Positive ROI**

* Refers to all marketing costs including UA and retargeting

STILL LEARNING THE ROPES OF MOBILE ATTRIBUTION?

GET THE GUIDE

App monetization is tough. In fact, 60% of app developers are poor.

In recent years, weve seen a clear trend dictated by a freemium-

Advertising In-app purchases Paid-for

In order to be in a position to properly optimize your revenue streams,

Standard in-app purchase event: By adding a few lines of code

It is also important to ensure that your media and service partners

Rich purchase events: Keeping your in-app event tracking at a basic

TRAVEL BOOKING EVENT

Basic In-App Event Rich In-App Event

GAMING PURCHASE EVENT

In-App Purchase In-App Purchase

Basic In-App Event Rich In-App Event

When it comes to subscriptions, Apple placed this model in the spotlight in

Also, remember to dedupe activations from different devices that go

Out-of-app revenue events: If a user acquired by a specific media source

This is done by setting up a server-to-server In-App Events API, which

User buys out of app

Attribution company Developer matches Developer sends

Out-of-store revenue is connected to acquiring source for

yy Ad networks: Act as intermediates between advertisers and publishers,

yy Mediation platforms: Connect publishers with multiple ad networks

yy Supply-Side Platforms: Technology platforms that are used by

Networks/mediation platforms often fall short when it comes to reporting.

Furthermore, without user level data, an app developer wont be able to

In addition, knowing that specific users acquired from a particular media

Since retention is the basis of monetization, maximizing the value of your

To put yourself in a position to maximize your retention rates, youll need

yy Measure more campaigns, GEOs, cities, media sources, publishers,

yy Define KPI milestones to understand the relationship between

Define activity cohorts: Cohort analysis tells us if user engagement

There are two types of cohorts: acquisition cohorts and activity

The following chart shows an activity cohort sliced by media source:

Average Sessions Per User

Ensure deeplinks are in place so you can properly measure

Deeplinking and deferred deeplinking will also deliver a streamlined

How can we prevent these glitches from happening? This is done

Lets explore the following example of a tracking link:

Based on the configuration determined by the advertiser, this scenario describes

yy Measure retargeting (re-engagement) attribution and post interaction

As a result, the organic multiplier (the number of organic installs a

Despite the diminishing prospects of getting organic traffic, you still

Heres what you need to do to properly and accurately measure organic

yy Work with Facebook and Twitter Measurement Partners: Without a

yy Measure organic traffic from Twitter without a tracking link so if

yy Calculate Twitter and Facebooks organic multiplier so you know

yy Automatically configure advanced audience campaigns for your

yy Utilize rich in-app events to granularly measure what your organic

yy Set up deeplinking to properly track user invites: Know which