App LTV (lifetime value)
LTV, or lifetime value, is a key metric which estimates the revenue a single user generates throughout their lifetime using an app. Ultimately, LTV predicts a user’s monetary value over time.
For app developers, LTV gives a precise picture of how successful the current monetization strategy is. The goal is to have users with high LTV, which means higher retention and a more long-term loyal user base that brings valuable ad revenue and in-app purchases.
How do I calcualte LTV?
App LTV is calculated by looking at in-app purchases and in-app advertising - i.e. the number of ad impressions the user saw throughout their lifetime. As a function of monetization, retention and virality, app LTV can be calculated with this equation: LTV = ARPU x 1/Churn + (Referral Value).
What is a good LTV?
High LTV is a tough metric to crack in the ever-growing app ecosystem because of increasing competition. The key to increasing LTV is to acquire high quality users who will bring value to the app. One way to acquire these users is by reaching them at moments they’re primed to engage.
ironSource’s Aura puts your app in front of millions of users when they first open their device and throughout the device lifecycle. This leads to higher LTV because users are choosing apps they want to use over the long-term versus trying out an app they saw in an ad.