When you’re a mobile app developer, there are multiple different monetization options that you can leverage to drive revenue. There are also different types of financial metrics that can give you insight into how much profit you’re driving and where it’s coming from.
Knowing which metrics to track and what they mean for your bottom line is essential, so let’s take a look at the eight mobile app financial metrics you need to be tracking to get an accurate understanding of your revenue.
Your “First-Time Payers” metric tells you how many new paying users have converted for the first time in your app during a set time period. It’s common to view first-time payers in weekly and monthly periods.
First-time payers can show you how effective your marketing campaigns are at driving high-engaging users who convert into paid users. This includes both subscription-based monetization options along with app purchases and in-app purchases.
In addition to watching your total number of first-time players in a month-over-month and year-over-year period, you’ll also want to keep an eye on first-time payers compared to the number of new users you’ve acquired in a set time period. This can help you gauge what percentage of users are likely to become paid customers, and you ideally want to see this number increase over time; at the least, you don’t want to see that percentage decrease.
How many users are paying daily? How many are paying weekly, and how many are paying monthly?
Daily paying users (DPU), weekly paying users (WPU), and monthly paying users (MPU) can be helpful to track this.
You may, for example, have a mobile app game like Last Fortress. Users can pay a monthly subscription for premium features. They can also make in-app purchases during gameplay to receive certain benefits, unlock characters, or buy in-game currency. In this case, you could have users paying daily and monthly. The ability to track both can help them assess which features are most valuable (and most frequently purchased) by users.
You want to know how many users are paying at different intervals, and you can also use this information to determine if special event, day-long in-app sales are effective at driving more in-app purchases.
You can also compare your paying users metrics with active users metrics. So you can, for example, compare your DPU number with your daily active users (DAU). If a drop in daily activity is happening, that could explain a decrease in DPU.
Your average revenue per user (ARPU) metric tells how you revenue the active user generates for your app on average within a specific time frame. It accounts for all monetization strategies, including monetization through payouts from ads being viewed or clicked in your app.
This metric is crucial to helping you understand how effectively you’re app monetization strategies are driving revenue from your active audience. It’s important to look at average revenue for all users— not just the paying ones— as part of your overall financial assessment for mobile apps.
Many users, after all, will choose to never become paid users and only stick to free version of the app, but that doesn’t mean that you can’t drive revenue from them. This is a good overall holistic metric.
Your average revenue per paying user (ARPPU) is just as important as your ARPU metric. It shows how much revenue you’re driving, on average, per paying user during a set time frame.
If you want to understand how much of your revenue is coming from paying users— and you want to know exactly what those numbers are— ARPPU is a crucial metric to watch.
Paying users are your highest value audience, and subscriptions and in-app purchases are going to be the fastest way to drive significant revenue compared to ad revenue. You want to be able to track this profitability over time.
It’s common for the ARPU and ARPPU to be tracked and assessed together. This shows you how much more profit you’re driving from your paying users compared to your userbase overall, and you can track how changes in your app impact revenue. You may find, for example, that a decrease in pricing leads to a drop-off in ARPPU but a significant boost in the ARPU along with an overall engagement or retention increase.
Your user lifetime value (LTV) metric can tell you the average lifetime value of both individual users and cohorts of audience segments. This is the total cumulative revenue per user since they first installed your app.
In mobile-app analytics, LTV is typically going to show revenue from users that was accrued during the specific time period in question.
Understanding the average individual LTV can be essential for making decisions regarding marketing channels, especially when you have to consider customer acquisition costs (CAC). It can help you identify sources of customers with higher LTVs so you can optimize those campaigns and invest more into those channels.
You want to watch your LTV carefully; a drop-off means your audience quality is dropping, and you want to resolve that fast. It may be due to targeting the wrong audience, but something like mobile app ad fraud could also be at play.
We can’t have a post talking about mobile app financial metrics without having total revenue on the list.
Total revenue tells you how much revenue you’ve generated within a set time frame. Gross revenue is the amount of money you’ve received as a result of your monetization strategies (as opposed to net revenue, which shows profit after expenses and costs have been deducted).
While it’s not uncommon to see different financial metrics shift around without significant consequences for your app (like a new balance of ARPU compared to ARPPU metrics), you do not want to see total revenue decreasing over time.
Keep in mind that it makes sense to analyze revenue per type of source. You want to monitor monetization-specific data to see which strategies are working best for you, and analyzing different types of revenue is the way to do this.
These metrics all fall under general revenue metrics, but singling out each one will be essential for improved optimization moving forward.
Your return on investment (ROI) tells you how much of a return you’re seeing after investing in an ad campaign. This helps you to assess how valuable different ad campaigns were, ensuring that you’re profitable overall.
You can calculate ROI by taking your total revenue driven from specific ads and dividing it by the total costs from that ad campaign over the same period. You want your ROI to be over 100% for profitability.
ROI is important, because your total revenue metric can be misleading. You may have an ad campaign or marketing channel driving a ton of downloads, but almost none convert into actual paying customers. Or, it’s possible that the ad costs of one campaign are significantly higher than another with the same quality of users.
Keeping a close eye on the ROI of your marketing campaigns will help you stretch every dollar of ad spend as far as possible, increasing profit overall.
Your return on ad spend (ROAS) tells you how much of a return in revenue you’re seeing on the money spent on ad campaigns.
You can calculate it by dividing the money spend on marketing by the total revenue generated by the marketing campaign in question.
Your ROAS is an important metric to watch to ensure that your ad campaigns are profitable. They can help you assess that you’re targeting and reaching a high-value audience that actually is converting into paid users, which is different (and more informative) than simply measuring for clicks and downloads alone.
Quality matters a great deal, and ROAS can help you assess the quality of your downloads.
There are plenty of financial metrics mobile app developers need to track, but these are nine of the most essential. They can give you a great understanding of how much revenue your app is earning, and what your strongest monetization strategies are (and how well they’re working).
The right mobile app analytics platform can help you track all of these financial metrics and much more. Make sure you’re choosing a tool that gives you well-rounded data, as well as letting you track custom events to best understand which actions and parts of the user journey are most effective at driving revenue.
Interested in getting started with financial metric tracking for mobile apps? MyTracker can help. See how we can help you analyze your app revenue using our free reports!