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Feb 17 2023
Mobile users in major markets spend four to five hours per day on apps, providing app companies with a wealth of potential data to work with. If you want people to spend time on your app, you need to know what works and what doesn't so you can improve the user experience at every stage of their journey.
In this article, we'll look at some of the most important key performance indicators (KPIs) for apps in three categories, as well as how to track them.
The abbreviation for "key performance indicator" is KPI. In a nutshell, a KPI is any measurable piece of data that can be linked to a user. KPIs tell you how well your app performs in key areas by tracking data, processing it, and reporting back to you. KPIs for mobile apps allow us to track every aspect of a user's interaction with an application.
KPIs are important because they allow you to measure the performance of your app to see if you're meeting your goals. Your company can use app KPIs to set goals, develop a strategy to achieve them, and track your progress along the way.
Consider it like a road trip: you set the destination, plan your route to get there, and double-check along the way to ensure you haven't gotten lost or deviated from the path.
Because of the amount of time people spend on apps on a daily basis, mobile app KPIs are becoming increasingly valuable. To put this into context, the average amount of time people spend on apps in the top mobile-first markets increased by more than 30% between 2021 and 2022, reaching 4.8 hours per day.
KPIs and app metrics are both quantitative measures, but KPIs are related to business targets, whereas metrics are related to company processes.
That may sound like semantic wrangling, so consider an example. With a KPI of increasing app engagement, you could track metrics like:
A metric is typically owned by a single department or person, whereas a KPI is contributed to by multiple departments and people within the company. For example, if your company wants to sell 30% more subscriptions in a given quarter, multiple departments will almost certainly be involved.
The bread and butter of any successful app is acquiring new users and generating revenue. Accurate measurement of these KPIs allows you to improve them over time, increasing your company's profitability.
Let's take a look at a few of them.
Cost per install (CPI) calculates how much you spend to acquire customers after they see an advertisement for your app. Paid installs are more important than organic installs in this case because CPI allows you to see how effective your paid ad campaigns are.
An advertiser pays the network only after the user installs the app (rather than just after they see the ad, which is known as cost per mille, or CPM). As a result, CPI encourages ad networks to place your ad in high-converting locations and to target specific audiences. As a result, you get more bang for your buck and less bloat in your ad spend.
How do you calculate it? Ad spend / Total number of installs directly tied to the ad campaign
ROAS is the amount of revenue generated for every dollar spent on advertising. If your ROAS is low, it means that your ad spend isn't generating enough revenue in comparison to what you're investing. Your ad campaigns are yielding a positive return on investment if your ROAS is high.
How do you calculate it? [Revenue gained from advertising / Cost of advertising] x 100
PF is the number of times customers buy from you in a given time period.
Because they generate more revenue than new users, loyal users are critical to your company's success. According to a Manta and BIA/Kelsey report, "a repeat customer spends 67 percent more than a new customer."
Knowing how frequently customers return to purchase will provide you with a better understanding of your success in converting them into repeat customers, allowing you to make more informed decisions about your customer retention strategy.
How do you calculate it? Total number of purchases over a time period / Total number of users during the same time period
OCR refers to your conversion volume from unpaid app discovery, which includes organic search, influencer marketing, related apps in app store listings, and social media word-of-mouth.
How do you calculate it? Total number of conversions – Total number of paid conversions
LTV is the most important KPI for calculating gross revenue. Unlike click-through rates, downloads, and session time, LTV provides a comprehensive view of your customers' worth.
If your customers do not convert, spend money in-app, or subscribe, you know your granular interactions aren't working. Calculating and optimizing your LTV assists you in optimizing your marketing and conversions.
How do you calculate it? Total revenue generated since install date / Total number of users who installed on that date
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Metrics of engagement show how users interact with your application. By examining them, you can learn how users interact with your app, how long they stay with you, and where you need to improve.
Because it is less expensive to sell to existing users than to acquire new ones, measuring and improving existing user engagement is essential.
An MAU is a user who logs an app session within a month or 30 days. Keeping track of whether your MAU count is increasing or decreasing is a broad but useful way to determine the effectiveness of your customer retention program. Define your criteria for an active user first, then calculate how many users met that criteria in a given month.
How do you calculate it? Total number of users who meet your criteria monthly
DAU is a measure of your app's popularity and growth potential. It refers to the number of daily users in your app. Businesses that expect users to interact with an app on a daily basis (such as medication tracker apps) should monitor DAU.
While different definitions of active interaction exist, a common example is account login. An online banking app, on the other hand, might define an interaction as a transfer, whereas an eCommerce app might define it as adding an item to their cart.
How do you calculate it? Total number of users who meet your defined criteria daily
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Retention rate is the percentage of customers staying with your company over a defined period. With apps, retention means keeping app users engaged with your app. Because you have more granular data about when and why users leave your app, knowing your retention rate will help you increase LTV and improve your in-app events.
For our purposes, we'll look at range retention, which compares the number of users from a previous week, month, or other date range to the next equivalent date range, allowing you to see how many users have been retained. To calculate range retention, simply divide the number of users from a recent time frame (say, the previous month) by the number of users from a previous time frame (say, the month prior to that).
How do you calculate it? Total number of active users who were active on a specific period of time since installation / Total number of users who launched the app for the first time during the selected date range
Uninstall rate refers to the rate at which users uninstall your app within a defined period. It enables you to compare user quality based on marketing channels, individual ads, countries, or other criteria.
Uninstalls can occur for a variety of reasons, including:
The funnel conversion rate describes how quickly people move through the funnel of your app. To determine this, you must first identify key in-app events in your funnel. The conversion rate between any two defined events is then calculated (for example, install to purchase).
How do you calculate it? [Total number of desired event conversions / Total number of initial events in the app] x 100
Performance KPIs are inextricably linked to engagement KPIs because an app that frequently crashes will, inevitably, lose users. Users are more likely to stick around if they can easily click a link in an email and get exactly where they need to go in the app.
The time it takes for users to interact with your app is referred to as app load speed (in other words, how long between when they tap and when the action actually starts).
Many factors can play into this critical part of app performance, including:
If your app takes too long to load, you will lose users, so measuring and improving this KPI is critical to the success of your app.
How do you calculate it? Measure your app’s load speed by using KPI monitors that record messages the app sends when defined events occur. The back-end development this requires is worth it because you’ll know exactly how long your users are waiting between events.
Crash reports detail the exact time, cause, and location of a collision. These reports are critical for optimizing your app development and maintenance processes. Furthermore, they allow your organization's developers to spend less time troubleshooting in-app bugs.
As time passes, app users' expectations for app performance rise, and reducing crashes will reduce uninstalls. Track and improve your crash rate to retain more users.
How do you calculate it? The number of app launches in a period / The number of crashes in the same period
Deep linking in the context of apps refers to delivering users to specific in-app content from wherever they are. A deep link can be embedded anywhere, such as in a text message, an email, an Instagram post, or a QR code. Your company can use a deep linking engine to send an email to existing users with a link that takes them to an in-app product page.
Use a tool like AppsFlyer to implement deep linking, which allows you to easily create deep links to boost installs, retention, and in-app purchases, among other events.
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What are you going to do with all that data now that you've gathered it? Here's how to analyze your key performance indicators and track your progress:
There is no single foolproof method for turning data into campaign success; otherwise, the marketer's job would simply be to check a few boxes in the correct order and then sit back and watch the conversions roll in. However, the KPIs listed above can help to paint a clearer picture of how well your mobile marketing efforts are progressing and where you may want to focus your efforts to drive future improvements.
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