App Economy

Understanding App Performance Metrics

May 08, 2017

Ballz

Apptopia Marketing

May 08, 2017

Driving downloads is key to making an app successful but it can be complicated to achieve. So how do we optimize an app for today’s app economy and get those downloads? To create a worthwhile investment, publishers must have some form of data to analyze and act as a jumping off point. Without data, we’re just shooting in the dark. Using guess and check might work but it will exhaust your funds and create inefficiency. The first step is to understand your competition. Before you can conquer an app store, you must conquer your category. If you know your competition, great. If not, look at the category rankings to see the apps above and below you - these are your competitors and you should start tracking their performance. Performance data includes downloads, active users, rank, revenue and more. Once you’re an actionable data wiz, you can drill down into more granular items such as country and demographic breakdowns.

The Right Metrics and App Rank Optimization

Tracking performance data of competitor apps will help identify which tactics are working and which ones are not. In addition to the aforementioned data points, other key metrics to consider are:

  • Average Revenue Per User (ARPU): The average return from each individual user helps identify pricing models such as cost-per-action (CPA) [equates to profit from app registration], in-app purchases, etc. Knowing the ARPU can aid return-on-investment and identify break-even points. ARPU is determined by dividing total revenue generated since launch by the total number of users.
  • Conversion Rate: A measurement of how many users move from one action to the next, such as clicks to installs or installs to in-app purchases, sign-ups, or other actions. The actual processes monitored differ based on the monetization model and the product’s focus.
  • Monthly Active Users (MAU): The number of unique app users during the past 30 days, who may have accessed the product X number of times. This metric is essentially a vital sign for the app.
  • Daily Active Users (DAU): Similar to MAU but on a daily basis. The number reveals how indispensable the app is for people.
  • Daily Sessions per DAU: Reveals how often customers use an app daily. Social media apps tend to have more daily sessions; when this value is divided by the number of daily active users, the answer reveals whether people are returning to the app as frequently as the publisher desires.
  • Lifetime Value (LTV): A measurement of the total value of each user from when they install the app to completing all the actions they take. A common method of calculating LTV is to multiply the average value of a conversion by the average number of conversions, by the average customer lifetime. 

Further metrics to understand include retention rate and churn. Retention is a ratio of people who install an app to those who use it within a specified number of days. Churn rate is the inverse. It shows how many users stop going back to the product over a certain time period.