15 Metrics Every Gaming Company Must Know

While most of the world struggles to fill time because of lack of work, game marketers are struggling to find free time.

The COVID-19 lockdowns have boosted user engagement with video games and esports. Game creators are mopping up users and revenue at a breath taking speed. Marketers are scrambling to decode the massive amount of data generated and devising strategies to retain customers post lockdown.

So what are the 16 Metrics, every marketers must know to effectively analyse Marketing and Users data and create sticky retention plans:

Acquisition Metrics

1. Effective Cost Per Mille (eCPM):

Revenue Generated Per 1000 Impressions.

eCPM helps evaluate the value of traffic and determining CPM. CPM is the rate an advertiser is willing to pay for for 1000 impressions, while eCPM is the publisher earnings per 1000 impressions.

eCPM = (Total Ad Revenue /Total Impressions) x 1000

2. Cost Per Install (CPI):

The cost of generating one new install.

CPI is affected by many variables, such as geography, platform, and device, and is used to determine the price of acquiring a new user. This is perhaps the most important parameter every marketer must know.

3. Install Per Mille (IPM)

The number of installs generated for every 1,000 impressions. IPM is calculated by dividing total installs by total impressions and multiplying by 1,000.

IPM = (Total Installs / Total Impressions) x 1,000

IPM helps evaluate the performance of a campaign. Higher the IPM, the more effective it is. A low IPM may indicate Ineffective proposition and communication, low differentiation or relevance or Campaigns/Communication targeting the wrong TG.

4. Organic Conversion Rate

Percentage of conversions driven by non-paid channels - organic search, social media, press, etc.

Organic Conversion Rate informs your non-paid distribution power and highlights opportunities to drive new users to your app without spending on UA.

5. K-Factor

K-Factor tells you how many organic users you get as the result of a paid UA campaign.

For example: If a game has an option for a multiplayer experience, and a user invited three friends to join who subsequently installed the app, you just earned three new ‘free’ users.

K = number of invites sent by each user / conversion rate of each invite

A high K-Factor indicates the virality of your app and enables you to reduce your average UA spend per user. In the long term it helps you optimize your ad budgets.

Usage And Engagement Metrics

1. Retention Rate

The percentage of players that return to your app during a defined period of time after the initial install (typically measured at 1, 3, 7, 14, and 30 days).

Retention rate is a key indicator of your app’s performance over time. A high rate demonstrates your game provides value to users generating repeat usage. It is the basis of monetization and a key factor in prediction models. 

Retention is another key factor in evaluating the quality of your users. It helps you create UA strategies and plan budget distribution between the different media sources you work with.  

Let’s say you have two media sources, A and B. On day 14 of a campaign, you notice that users coming from A have a 15% retention rate while users from B only have a 10% retention rate. Being a smart game marketer, you immediately funnel budgets from campaign B into A. After all, a higher retention rate signals better users and more revenue over time!

If users coming from Media Source A have a 15% retention rate on Day 14, and users coming from Media Source B have a 10% retention rate on the same day, it is preferable to shift more budget toward media source A. That way, you will gain higher quality users that will play your game for a longer period of time and generate more revenue.

2. Churn/Uninstall Rate

The rate at which users uninstall your app within a set number of days following an install.

Games suffer from the highest uninstall rates in the mobile app industry. Analyzing this KPI allows you to drill down into factors that may have led to app deletion – for example, poor segmentation or game difficulty at different levels. It also helps you to calculate your losses for acquiring those users but failing to retain them. 

A high uninstall rate after a specific level or promotion may indicate that something is broken in the game flow.

3. Daily Active Users (DAU)

Definition:

The number of unique users who use the app at least once per day (e.g. A single unique user who launches the game 3 times a day is counted as 1 daily active user).

DAU shows the proportion of the number of users who have installed the game and play it every day. It helps evaluate the game’s potential if you increase engagement and retention. 

Cohorting DAU can also help evaluate the success of a specific new feature within the game or a feature showcasing your game in an app store.

4. Monthly Active Users (MAU)

The number of unique users who engage with the app over the course of 30 days (e.g. A user who engages with the game on five different days within 30 days counts as 1 monthly active user).

MAU Indicates the size of your user base and gives a wider perspective about this base than DAU. Besides helping with user base growth evaluation, MAU is used to calculate an important quality KPI, stickiness.

5. Stickiness

The number of days users visit your app within 30 days. Stickiness can be calculated by dividing DAU by MAU and multiplying by 30.

Stickiness = (DAU / MAU) * 30

Stickiness indicates how addictive your game is and how relevant it is for users. High stickiness shows high interest in your game and makes users visit it more frequently.

Monetization Metrics

1. Average Revenue Per User (ARPU)

ARPU is calculated by dividing the total revenue generated by the total number of users for a given cohort over a given time frame (e.g. Day 30 ARPU is the average revenue generated by a user within 30 days of an install).

Average Revenue Per User is a basic KPI that’s used to monitor user value over a specific period of time, evaluate quality, and determine performance at various levels of a game. 

2. ARPU = Total Revenue / Total Number of Users in Cohort

ARPU is used to evaluate player value and plan UA budgets. ARPU includes all revenue-generating events in the app, such as purchases, ads, subscriptions, and paid-for apps.

3. Average Revenue Per Paying User (ARPPU)

Average Revenue Per Paying User only measures players who made a purchase in the game. Accordingly, the formula is the total revenue divided by the total number of users who generated revenue.

4. ARPPU = Total Revenue / Total Number of Revenue-Generating Users

ARPPU is used to evaluate the efficiency of existing in-app purchase (IAP) events and the success of new IAP events introduced to the game flow, as well as the effect of other events on IAP revenue (e.g. the option to see an ad rather than pay).

5. Lifetime Value (LTV)

Lifetime Value is the revenue a user generates over the course of the entire time they play a game. It’s calculated by taking the number of days of engagement and multiplying it by average spend per day.

LTV = Number of Days of Engagement * Average Spend Per Day

LTV (together with ARPU) helps evaluate the total revenue, or value, of a game or user and is the strongest indication of how much can be spent on UA to meet the condition LTV > Cost.

6. Time to First Purchase

The time it takes a user to make their first in-app purchase after installing a game.

Time to first purchase helps plan IAP placements and timing during the game flow, and informs if and when to mix in-app advertising (IAA) as another to improve performance. When planning IAP placements and timing, the marketer decides when and where in the game the purchasing option appears. In some cases, adding another monetization model (i.e. in-game ads) will improve performance..

7. Share of Paying Users

The percentage of installers who ended up making an in-app purchase within a given time frame since the install.

This is an indication of quality users driven from media sources, as well as a way to measure the performance of your monetization model.

8. Return on Ad Spend (ROAS)

Return on Ad Spend is the metric of profitability. It is calculated as the money spent on marketing divided by the revenue generated by users in a given time frame (e.g. A Day 7 ROAS of 50% means that a player generated revenue that was 50% of the money spent to acquire that user).

ROAS = Total Marketing Spend / User-Generated Revenue in Given Time Frame

As a measure of profit, ROAS is the most important metric on which UA managers are judged.

For better or for worse, Gaming marketers today have no choice but to spend large budgets on UA. By constantly comparing their income to ROAS, they can better evaluate the performance of their campaigns and the quality of users they acquire.  

This article was created on basis of a Appsflyer blog by Igal Frid

Appsflyer is a great platform to measure success of your game and get insights into growing your game and retaining customers.