I recently came across a fantastic post by Jeff Gurian. Those of you who don’t know Jeff, he is the Director of Marketing at Kongregate. In his post he brings up a super important point – you can double your traffic by Tracing the Ad LTV or “counting the ads” in the language of the article.
Doubling your traffic only takes a 25% increase in LTV
According to Kongregate’s experience with user acquisition, Jeff explains, the correlation between how much traffic you can get and the bids you place is not linear but rather a power function. “There is always a tipping point where your traffic will increase exponentially relative to the increase in your bid.” says Jeff.
The chart in the post does a good job in explaining this point:
In this example – acquiring traffic with bids of $12.5 as opposed to $10 will allow you to get twice the amount of traffic. In other words, a bid increase of 25% transatles to a volume increase of 100%.
Tracing Ad LTV allows more room in your CPI bids
Not all games have ads but the ones that have added in-game advertising are seeing between 10% to 80% of their revenue coming from ads. 25% is a typical scenario in many games and is also close to the ratio reported by public companies such as Glu and Zynga. The example given in the article (see image below) is showing that tracing Ad LTV can modify your ARPU / LTV analysis by 25%-30%. As we know, higher LTV means that we can afford to pay higher CPI which leads to twice as much traffic per the explanation above.
Let SOOMLA do the work and get you the accurate Ad LTV
Many companies skip the Ad LTV since the process for calculating it is often complicated, time consuming and in many cases it is not accurate enough. Their claim is that none of this matters if you are miscounting your Ad LTV. Counting impressions can lead to significant errors in LTV calculations which means your ROI analysis can be off and end up losing money for the company.
Fortunately enough, SOOMLA has developed a solution that automates the Ad LTV calculation and we do that with much greater accuracy so now you can enjoy the benefits of SOOMLA and double your traffic without worrying about accuracy or extra development effort.
To save valuable resources and ensure you are getting the Ad LTV correct for every cohort you need a specialized system like SOOMLA. The platform traces the ad revenue and sends it to your attribution partner or in-house BI.