To set the basis for the success of your app business, you need to decide which KPIs to monitor. And of course, you should take measures to improve them. In this blog post, I will summarize the most crucial app marketing KPIs.
WHAT IS A MOBILE APP KPI?
A key performance indicator is a measurable metric that shows a mobile app’s performance regarding business goals. It is a piece of information that stakeholders can use to identify weak points in the app or the app marketing, make decisions, and adjust strategies. Usually, KPIs are either total numbers or percentages.
You can sort app marketing KPIs into these 5 categories:
USER ACQUISITION KPIs
To build a successful app business, your first marketing objective is user acquisition. And to find out whether you focus your efforts on the right means and channels, you should keep an eye on the following metrics.
App Store Optimization is the best free way to acquire new users. With the proper keywords, you can push your app into search results pages on the App Store or the Google Play Store. The number of search impressions indicates your success in doing so. If it is too low, you might have picked the wrong keywords.
For iOS apps, you can find this number on App Store Connect. Unfortunately, Google Play does not provide it.
For paid user acquisition, the number of impressions is important as well, because it indicates whether your bids are competitive or not. A low or declining number should prompt you to increase CPI– or CPC-bids, or reconsider your targeting.
Usually, the number of impressions is reported by the ad network, so look it up in their dashboards or ask their representatives to report them to you.
Click-Through Rate (CTR)
To evaluate the quality of your creatives (banners, videos, and text ads), you need the click-through rate. It tells you which percentage of people who see your ads actually click them. If it is low, redesign your creatives, and also check whether you use the right channels and placements to approach your audience.
Ad networks calculate and report the CTRs for their campaigns, so there is no extra effort needed on your side to learn about them.
The total number of downloads is a growth metric. It tells you how many new users you acquired. Usually, it refers to a specific period of time. Comparing download numbers by channel month-over-month or year-over-year shows you how successful your user acquisition strategy is for each channel.
You can find the number of downloads in App Store Connect and the Google Play Developer Console. To compare them by channel or partner, an attribution tracking tool is necessary.
Retention is the first and lowest level of user engagement. Only people, who come back to use an app again, can become loyal long-term users or -in the best case- paying customers. Thus, you should monitor retention KPIs and optimize them to grow your userbase.
Learn more: 12 METHODS TO INCREASE MOBILE APP USER RETENTION
The retention rate shows which percentage of users return to an app within a predefined period of time. Low rates can point to technical problems or weaknesses in the app onboarding process. But they can also indicate that your app does not meet users’ expectations.
To learn your users’ retention rates, you can use app analytics or tracking tools.
Users who uninstall your app are even worse for your business than users who do not return to your app (but still keep it on their devices) because you have fewer measures available to reach them. For instance, you cannot send them push notifications anymore. High numbers (or ratios) of uninstalls are signs for a low-quality app that disappoints users so much that they want to get rid of it. If you experience high numbers of uninstalls, check your app for significant bugs. Also, make sure that you do not annoy users with ads that are too intrusive.
The number of uninstalls is available in the Analytics section of App Store Connect and in user acquisition reports on the Google Play Developer Console.
Active Users (DAU / MAU)
While the number of downloads or installs indicates the success of your user acquisition efforts, it does not say anything about your actual userbase. To understand how many people use your app and how your userbase develops, you need another metric: active users.
The number of daily active users (DAUs) tells you how many people use your app on a daily basis. This metric is great to see the impact of short-term retention measures, but also to understand on which weekdays people use your app primarily. On the other hand, a declining number can indicate severe technical problems that discourage users to keep using your app.
The metric of monthly active users (MAUs) shows the number of people that open your app on a monthly basis. Comparing MAUs month-over-month enables you to see the results of your combined user acquisition and retention marketing efforts.
If you implement an analytics tool like Google Analytics, you will be able to monitor both DAUs and MAUs.
USER ENGAGEMENT KPIs
Retaining users are great, but still not really valuable. You must transform them into loyal users that are deeply engaged with your app. For this purpose, you can use many different app KPIs. Here are some of them.
Session length is a good indicator of both user retention and engagement. Long sessions are signs of an interesting app that is easy to understand. But short session length could mean that your app lacks content, is hard to understand, or frustrates users with bugs, crashes, or similar technical problems.
The easiest way to measure session length is the implementation of an analytics tool like Google Analytics.
Engagement rates are similar to retention rates. But instead of showing which percentage of your users returns to your app, they tell you which percentage perform specific events that you want them to perform.
For instance, the tutorial completion rate in a game shows how many players complete the onboarding process. As doing so is the basis for players’ long-term commitment, it is a valuable event for the app owner. Every other valuable event makes a good engagement indicator. Be aware that you need to monitor separate engagement rates for every single event to understand at which points in their journey users might need more encouragement to continue.
Tracking engagement rates reliably requires the implementation of a tracking tool. If you attribute events to your user acquisition partners, you can also calculate engagement rates per partner. This information helps you allocate your marketing budgets to those channels that deliver the best quality users.
Conversion to Payer Rate
The conversion rate of users to payers (who spend money for IAPs) is a crucial app KPI because it is an indicator of the monetary success of your app. Low conversion rates might be the result of insufficient monetization measures. Check if your IAPs actually provide additional value to users, are priced fairly and promoted properly in your app.
Like engagement rates, the measurement of conversion rates also depends on a proper tracking system.
Your app’s average rating on the App Store and the Google Play Store shows you whether users like your app or not. In general, a rating of 4.0 stars or more is great. If it is lower, you should focus more on your app’s quality. Consider implementing features that your users ask for.
You can find the rating on your app’s product pages on the stores.
Number of Social Shares
A loyal community that promotes your app is one of the most valuable assets in app marketing. When users share your app (or the results they achieved with your app) on social media, they can generate new users that you might not have reached otherwise. If users do not share your app, double-check the implementation of sharing mechanics. Incentivize users to use it by giving them rewards.
To track social sharing activities, you have to implement a tracking tool into your app.
Number of Support Requests
The number of requests for support is another indicator of your app’s quality. A high number might be caused by serious bugs but also by confusing or missing explanations for your app’s functionalities. In the latter case, rework your app onboarding process and implement better in-app guides.
The total number of support requests is NOT the sum of single messages or phone calls as users might text or call multiple times because of the same problem. So better count the number of cases or tickets instead.
User acquisition and retention marketing are not free. Thus, you need to keep an eye on costs, so you do not spend more money than you can afford. The following metrics help you do so.
Cost per Click (CPC)
When buying traffic from ad networks, you will in many cases pay based on clicks. The CPC tells you the price for each click. High CPCs might be the result of choosing the wrong user acquisition channels or placements.
CPCs are reported by ad networks, so you do not need to take additional measures to track them.
Cost per Install (CPI)
The cost per installs tells you how much money you have to pay for a new user on average. If the CPI is much higher than the industry benchmark, this might be the result of a bad user acquisition strategy that focuses on the wrong channels.
To calculate the CPI, you need to sum up your spendings for user acquisition as well as the total number of paid installs. For the latter, you need an attribution tracking tool.
Customer Acquisition Cost (CAC)
The CAC shows you how much money you need to invest on average to acquire one paying user. It is especially relevant for shopping apps and all apps that offer in-app purchases. If the CAC is very high, reconsider your monetization strategy, but also your user acquisition efforts.
To calculate the CAC, simply add up your user acquisition costs and divide it by the number of paying users.
Making money is the final goal of an app business. So you need to track your financial success to be able to optimize your monetization strategy.
Effective Cost per Mille (eCPM)
If you use in-app advertising to monetize your app, you need to monitor the effective cost per mille. It tells you how much money you make per thousand ad impressions. In case the eCPM declines, reevaluate your monetization partners. Check if the ads they show in your app are appropriate and interesting for your audience. Reconsider the ad types you use as well as the ad placements in your app.
You can calculate your eCPM by adding up all revenues from your monetization partners and dividing it by the total ad impressions.
eCPM = Revenues from Ads / (Ad Impressions / 1,000)
Average Revenue per User (ARPU)
The average revenue per user shows how much money you make per user within a specific period. This metric includes revenues from in-app purchases, in-app advertising, and other monetization strategies. The ARPU always refers to a specific period, for instance, one month. Changes in the ARPU show the success of your monetization measures.
To measure ARPU, you need to sum up revenues from in-app purchases but also from in-app advertising and other monetization strategies within the predefined period.
Lifetime Value (LTV)
The average lifetime value is a similar metric like the ARPU that sums up revenues from in-app purchases, in-app advertising, and other monetization strategies. But it tells you how much money you earn from users from their first open until the last usage of the app, not only within a delimited period. If this value is low or declines over time, you have several options to increase it:
- increase the percentage of paying users
- encourage users to spend more money on IAPs
- extent the user lifetime with measures to increase retention and engagement
Return on Investment (ROI)
The return on investment sets your earnings in relation to your spendings. It lets you know whether you make money or lose money with your app marketing measures. If the ROI is too low, you should reconsider your monetization measures or cut your spendings. Given that most businesses do not generate a positive ROI within the first years after launching, you should not panic if yours is low too.
To calculate the ROI, you need to know your total revenues and total costs:
ROI = (Revenues – Costs) / Costs
With the 20 metrics I introduced in this article, you will be able to gain helpful insights into the crucial aspects of your app marketing strategy. Depending on your app and business goals, not all of them might be useful, though. For instance, if your app is a premium app, tracking users’ lifetime value does not make sense, because it always equals the app’s price. So before you drain yourself in numbers, consider which metric actually is helpful and which is not.