In today's digital landscape, the realm of advertising and marketing has become increasingly complex, accompanied by a plethora of jargon and acronyms that can leave even seasoned professionals scratching their heads. This article aims to demystify some of the most common adtech terms and provide a comprehensive guide on how to calculate key performance metrics in the mobile marketing arena.
CPI, or Cost Per Install, is a crucial metric for mobile app marketers. To calculate CPI, divide the total ad spend by the number of app installs generated through the campaign. This metric helps marketers assess the efficiency of their user acquisition efforts.
ROI reflects the effectiveness of your mobile advertising campaign. To calculate ROI, subtract the initial ad spend from the revenue generated through the campaign, then divide by the initial ad spend and multiply by 100 to get the percentage ROI.
CPM measures the cost of reaching one thousand impressions for a mobile ad campaign. Divide the total cost of the campaign by the total number of impressions, then multiply by 1000 to get the CPM.
LTV is the projected revenue a user generates throughout their engagement with your app. Calculate it by multiplying the average revenue per user (ARPU) by the average user lifespan.
CTR indicates the percentage of users who click on your ad after viewing it. Divide the number of clicks by the number of impressions, then multiply by 100 to get the CTR.
Retention rate helps gauge user engagement. Divide the number of users at the end of a period by the number of users at the beginning, then multiply by 100 to get the retention rate.
UAC quantifies the cost of acquiring a single user. Divide the total ad spend by the number of acquired users through the campaign to calculate UAC.
Engagement rate assesses the level of interaction with an ad. Divide the number of engagements (clicks, likes, shares, etc.) by the number of impressions, then multiply by 100 to get the engagement rate.
Conversion rate measures the percentage of users who complete a desired action (e.g., making a purchase) after interacting with your ad. Divide the number of conversions by the number of clicks, then multiply by 100 to get the conversion rate.
ARPU calculates the average revenue generated by each user. Divide the total revenue by the number of active users to get ARPU.
Ad frequency denotes how often a user sees an ad. It's calculated by dividing the total impressions by the number of unique users. High ad frequency can lead to ad fatigue and reduced engagement.
Organic growth refers to users acquired naturally, while paid growth involves acquiring users through advertising. Compare the number of organic and paid users over a specific period to assess their growth rates.
Churn rate measures the percentage of users who stop using an app over a certain period. Divide the number of users lost during that period by the total number of users, then multiply by 100 to get the churn rate.
The break-even point is where the revenue generated equals the ad spend. Divide the fixed costs by the revenue per user to determine the number of users needed to break even.
User growth rate reflects the pace of app user acquisition. Divide the difference in user count between two periods by the initial user count, then multiply by 100 to get the growth rate percentage.Understanding these adtech terms and their calculations is pivotal for making informed decisions in the mobile marketing landscape. By mastering these metrics, marketers can refine their strategies and optimize their campaigns for greater success.