#CHEATSHEET | 5 Performance Marketing KPIs you should monitor

Monitoring the right metrics or KPIs is very important in performance marketing. But with the changing dynamics of user-behaviour and availability of advanced in-app analytics, new metrics are coming to light. This calls for a realignment of the marketing plan, which involves revisiting the marketing strategy, reallocating the budget, and also including additional parameters that need to be monitored.

In this blog-post, let’s look at 5 primary metrics that are still very relevant in performance marketing campaigns.

1) Cost of customer acquisition (CAC)

While running a performance marketing campaign, it’s important to evaluate the cost of acquiring users at every phase. Looking into your traffic sources and comparing their performance from time to time, can help you lower the CAC and optimise your marketing ROI.

For eg, if you spend Rs. 50,000 on your marketing campaign and acquire 500 users over a time period, your CAC is Rs. 100.

2) Customer life-time value (CLTV or just LTV)

If you’re serious about improving the retention and monetisation rates of your App, you must have all eyes on determining the CLTV (lifetime value) of your users.

LTV is defined as the total value or revenue generating potential of a user over his or her lifetime.

With the mounting cost of user acquisition, it is extremely important to evaluate the LTV of users.  In fact, a strategic mobile marketing plan would be to acquire users with LTVs greater than the cost per install (CPI).

While calculating LTV, a lot of important factors about the user is taken into account in the prediction model. Starting from how much a user is spending per visit, the total number of visits, all costs involved in acquiring the user, etc. After subtracting all the marketing or sales costs incurred on the user from the revenue generated by the user, you can determine the LTV of the user and predict the net profit that can be obtained from a future relationship with the user.

3) Cost of Retargeting

Another significant metric to be monitored here is the cost of retargeting. By this we mean the entire spends directed towards running retargeting campaigns aimed at users who have made purchases on your app, viewed a particular product or service, or probably even added items to their shopping cart but did not complete the transaction for whatsoever reasons. So as a mobile marketer, you might be reaching out to them by showing them relevant retargeting product offers once or twice or maybe a few more times.

This keeps adding to your marketing spends and as such, it makes sense to keep a tab on this metric. You may want to check if the user has finally made a purchase from those ads or not. If not, it will be in your best interest to try some other strategy for converting such users.

If your retargeting cost is high, it could imply:

• Incorrect user segment targeting,
• Errors in the ad copy
• Inconsistencies in time

4) Payback Time

On one side where you’re focused on acquiring new users, wouldn’t it help if there was metric that could determine how soon these users can start generating revenues? That’s why mobile marketers need to look at the payback time (pay back period) nowadays. This is because even after you know your CPI and pick the most efficient traffic sources for your marketing campaigns, you can’t usually gauge the ROI for every acquired user.

By looking at the first few days of user-activity on the app, a smart mobile marketer can always try to find out how quickly the new users can generate ROI.

This is done by looking at the ratio of LTV of users to CAC of users. The greater the ratio, the better it is.

5) User Retention Rate

So, we’ve covered all that matters when it comes to user-acquisition. But leaving our discussion to that would imply a half baked story.

This brings us to the most important metric over which most mobile marketers often lose their sleep. Yes, we’re talking about user retention!

You’ll agree with us when we say that monitoring app retention is a bigger challenge for marketers. Retaining users who actively use your app everyday to view in-app content and make purchases is the ultimate dream for every app owner or marketers. But to get to this perfect picture scenario and undermine Murphy’s Law, mobile marketers need to carefully monitor a lot of factors. This includes monitoring important in-app events like, frequency of app opens, the number of active user sessions, average time spent by the users on the app, DAUs & MAUs, in-app content consumption, volume of purchases in the app, amongst others.

Need some help with your mobile marketing campaigns?

Connect with the relevant audience & optimise your business prospects. Drop me a line at neelanjana@affle.com to explore strategic marketing solutions for your brand using Affle’s MAAS platform.

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About the writer:

Neelanjana Barua, Sr. Content Strategist, Affle

Bringing you the latest stories from Affle. Read about all that's new and happening in the mobile universe!