Plamen Stefanov is a User Acquisition Manager at Tactile Games, specializing in mobile games. His main responsibility is to acquire new users while meeting ROAS targets. Plamen's daily tasks involve monitoring campaign performance, assessing strategies, and identifying profitable investment opportunities. With his strong analytical skills and industry knowledge, he makes data-driven decisions to optimize user acquisition efforts. Plamen's expertise and commitment play a crucial role in Tactile Games' growth and success by expanding the user base and solidifying its position in the competitive mobile gaming market.
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User acquisition metrics are crucial to evaluating how casual mobile games perform. UA professionals track and analyze key performance indicators (KPIs) and other metrics to gauge the effectiveness of user acquisition campaigns. These metrics provide valuable insights into marketing performance, efficiency, and return on investment (ROI).
Still, UA managers don’t always know how to use these metrics to optimize performance.
This blog post will explore the fundamental user acquisition metrics and KPIs important for casual mobile games and how to leverage these metrics effectively.
1. CPI
Cost per install (CPI) measures the cost advertisers pay to acquire a single user. You can calculate CPI by dividing the total advertising spend by the number of installs generated. CPI gives you insight into the efficiency of your marketing campaigns. It also helps you compare the cost-effectiveness of different advertising channels and strategies.
Of course, a lower CPI indicates that you are acquiring users at a lower cost—this lowers the revenue you will need to drive from each user to turn a profit. We look at CPI when focusing on creative optimization. Considerations vary by region, but ad creatives with lower CPI indicate that users like the ad, and the creative can be scaled.
2. Retention Rate
Retention rate measures the percentage of users who continue to engage with the game over a specific period. It’s a metric for assessing user stickiness and long-term engagement. A higher retention rate indicates that users are interested in your game, playing it for longer, and are more likely to purchase or participate in a revenue event.
The longer the user engages with the mobile game, the higher their lifetime value (LTV) will be. By tracking retention rates, advertisers can identify their user acquisition campaigns' effectiveness in attracting engaged and valuable users. Improving retention rates through targeted campaigns and in-game features can significantly impact the success and profitability of user acquisition efforts.
When testing a new campaign, retention rates indicate how engaged your users are—and how well you’re targeting the right users. Watch how it impacts retention rates if you’re testing a new feature. If more users peel off, the feature may interfere with the app's experience.
3. Cost per retained user
The cost per retained user is not widely considered when evaluating performance. You can calculate cost per retained user by dividing the CPI by the retention rate. The metric measures the actual cost of acquiring engaged users with the game. It is important to pay attention to it in case of game changes that impact new users—or when testing different campaign types.
This metric is most useful when running campaigns optimized for in-app advertising revenue. These campaigns must acquire users for less, but at the same time, they must post good retention rates. This is because players must remain in the game longer to increase ad engagement.
4. CPA
Cost per action (CPA) measures the cost of acquiring a user who performs a designated action, such as making an in-app purchase. You can calculate CPA by dividing the total advertising spend by the number of users who perform the desired action.
CPA helps assess how efficient campaigns are at driving valuable users. A lower CPA indicates that users are interested in the game, and your users are more likely to convert and generate revenue.
When running CPA campaigns, knowing how much you will pay for the selected action to achieve profitability is important. You can optimize CPA by testing different campaign types. Typically, users will respond to ads that represent the game well. Presenting other features inside the game can also entice users to make in-app purchases.
5. Conversion rate
Conversion rate measures the percentage of users who take a desired action—for most casual/ match-3 games. This means making an in-app purchase. You calculate the conversion rate by dividing the users that convert on IAPs by all users acquired on a particular day.
It is a critical metric that indicates the effectiveness of user acquisition campaigns in driving users that monetize.
A higher conversion rate significantly improves the ROAS performance of a campaign—as this is one of the main KPIs directly related to the ROI. Track conversion rates when testing different IAP offers at different prices, new features, or monetization options in the game. Conversions help advertisers identify how attractive their IAP offers are. They can then optimize the offers to increase conversions and maximize ROI.
6. ARPU
The average revenue per user (ARPU) provides valuable insights into users' spending habits and value. Tracking ARPU allows advertisers to identify the maximum CPI they can afford to pay for a user, compare revenue performance across different user segments, and improve monetization strategies accordingly.
By monitoring changes in ARPU over time, advertisers can evaluate the impact of updates, events, promotions, or different tests on user buying behaviors and make decisions based on the increase in the revenue per user.
Fluctuations in ARPU directly impact ROAS, so understanding the minimum level required to achieve profitability is a good starting point for evaluating performance. If ARPU drops below the set threshold, advertisers need to understand why. It could be because of a dip in conversion rates or an ARPPU drop. Depending on the hypothesis, different tests can be conducted to improve at least one of the two metrics.
7. ROAS
Return on ad spend (ROAS) is a crucial KPI that measures the revenue generated for every dollar spent on advertising. It helps determine the effectiveness of user acquisition campaigns in driving revenue.
A higher ROAS indicates that a campaign targets the correct audience and that the marketing efforts generate sufficient revenue, resulting in positive ROI. It also indicates where to allocate advertising budgets—for instance, by focusing on specific acquisition networks or campaigns for higher profitability. Advertisers can adjust budgets accordingly depending on ROAS goals, whether the campaign is over or underachieving.
8. LTV
Lifetime value (LTV) estimates the revenue generated by a user over the entire duration of their engagement with the game. LTV allows advertisers to understand the long-term profitability of their user acquisition and retention efforts and, based on those, make informed decisions about how much they can afford to spend on user acquisition.
You calculate LTV by multiplying the ARPU by the average lifespan of a user. Maximizing it is crucial for long-term profitability and ensuring the sustainability of a game. LTV is mostly measured against targets for achieving 100% revenue return on the selected breakeven period. In other cases, a pLTV model can be built and serve as a guiding metric for profitability —instead of actual ROAS.
Monitoring metrics for greater success
Tracking and analyzing user acquisition metrics and KPIs is essential for running successful marketing campaigns in casual gaming apps. The above metrics provide valuable insights into user acquisition efforts' efficiency, effectiveness, and monetization potential. But remember, tracking them is just a starting point. A lot goes into figuring out why campaigns perform and don’t perform.
By monitoring key metrics and leveraging data to optimize campaigns, advertisers can ensure that user acquisition strategies are backed by evidence and deliver measurable results to drive long-term success.