Importance of LTV and Handy Tips for Rocking It

Lifetime value (LTV) is the total average revenue generated by a user from the day they started using the service, i.e. during a company’s entire relationship with a customer.

In the mobile monetization industry, the ‘service’ is the mobile app. We’re especially interested in ad LTV, which refers to the total revenue an average user generates by viewing and/or clicking on ads offered in an app.

There isn’t a single way to calculate LTV and various platforms use different methods. Soomla, for instance, has several formulas you could use for these purposes.

Q2 2019 AD LTV BENCHMARKS

The role of LTV

LTV is used for predicting how much profit a customer can generate, as well as for developing and optimizing strategies to attract new customers. It helps publishers understand the long-term health of their user relationship instead of only focusing on revenue. LTV also helps with marketing decisions as it allows you to identify your most valuable customers, the so-called ad whales.

Factors that affect LTV

There are plenty of reasons why one user’s LTV might be higher than the other’s. For example, one of the things we learned from our latest Ad LTV Benchmarks report, as well as from the previous studies, is that LTV can vary depending on the ad network, app publisher, region, device model, operating system version, demographics, and more.

To illustrate, let me just mention a few key conclusions from this report. First of all, the highest ad LTV in the observed period was generated by Facebook, Aarki, and Vungle ad networks. Second, Android is the operating system that delivered the highest ad LTV in most regions. Among Android device manufacturers, it was Google Pixel that stood out in generating the most ad LTV by US users. In terms of regional distribution, North America delivered the best results.

The report analyzed mobile ad LTV data for Day 7 and Day 30, broken down by traffic sources, device models, manufacturers, operating system, and countries. The information was gathered over the course of the second quarter of 2019 across more than 450 mobile apps.

Strategies to improve LTV

While you can influence some of these things with extra effort, others will be out of your control. So what are some easier tactics you can employ to increase your LTV? Here are some ideas:

1. Rewarded videos

Rewarded videos are optional video ads that provide a certain reward for users viewing them. This reward is usually an in-app currency, but can also be customizations, an extra chance for the player to continue using the app, etc.

Incorporating ads that reward users for viewing them has proven immensely effective in not only dramatically increasing user satisfaction, engagement, and retention, but also impressions and, as a result, LTV. 

This category of ads is beloved by the users because they give them an opportunity to keep engaging with a free app when they’re still not ready to start paying for it.

2. Smart push notifications

Increasing user engagement and retention (and consequently, LTV) can also be done through the deployment of push notifications. These notifications appear in the device’s status bar and remind the users of the app’s presence. Their role is to get users to interact with the app by informing them about its updates, benefits or bonuses.

While these notifications can be extremely useful, careful balancing is needed so the user doesn’t get annoyed with them and simply removes the offending app altogether.

Q2 2019 AD LTV BENCHMARKS

3. Deep linking

Implementing deep links in app re-engagement campaigns directs the users that might have forgotten all about your app toward specific content in it they might find interesting or useful. With such a strategy in place, you can seamlessly incorporate ads in social sharing, email campaigns, and more.

4. Onboarding process optimization

Onboarding refers to the user’s first in-app experience. Just like first impressions in everyday life, they are even more important in apps as your LTV depends on them. This is why you need to make this process as simple and interesting as possible, so as to get users to engage and stay around in the long run, generating revenue during that time.

Whichever onboarding techniques you decide to use, make sure to always use A/B testing to see how they work out. 

5. UA optimization

LTV is closely related to user acquisition. The better your user acquisition strategies, the better your users’ LTV will be. User acquisition can be optimized via several channels. These include:

  • App Store Optimization (ASO): all the things that affect your app’s visibility in app stores like ratings, images, keywords, etc.
  • Social media campaigns: utilizing popular channels to spread the word, useful for deep linking as well
  • Referrals: one of the most popular marketing strategies because people tend to value the recommendations of their friends and family

6. Communication with users

Keeping in touch with your users and making them feel like they’re being listened to will be awarded with their loyalty. This means answering all their questions and concerns, carefully reading through the app store reviews and addressing all the issues. If the issue is fixed, let them know. If not, tell them anyway and explain why. Honesty goes a long way.

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7. Having an unbiased attribution platform

Another important thing to keep in mind when trying to get the best possible LTV is that you can’t do it alone. You need the help of a good mobile attribution platform at your side to make sure your efforts don’t go to waste. Such a platform provides tools to measure your app’s installs and identify their sources. It will also help you discover the lucrative ad whales, a small group of users that generate the highest revenue for your app and have the highest LTV.

High LTV = success

LTV is the ultimate identifier of your app’s success. This is why it is important to employ all the best strategies to increase it. I’ve listed a few of the most popular and useful tactics, but there’s always room for more. If you’d like to explore your options with accurate and unbiased information, make sure to drop us a line, we’ll be happy to assist you in increasing your app’s LTV.

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