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Predictive Lifetime Value: A Game Changer For Mobile App Developers

Written by: Juliana Casale, Director of Marketing

It takes a lot of time, energy and investment to create compelling virtual worlds that users can get lost in. Naturally, once a mobile app is ready for launch, game developers are anxious to see all the hard work pay off. Obsessively checking install rates and app store rankings is a logical next step – but that kind of laser focus on surface-level metrics can lead to trouble down the road. Yes, it’s important to build a new mobile game’s user base quickly, but what we’ve found working with 8 out of the top 10 game developers (by revenue) in the US is that’s equally as important to build a user base that will generate revenue over the long-term.

Free to Play, Tough to Monetize

We’ve seen this pattern over and over in the world of mobile gaming. App developers invest heavily in customer acquisition burst campaigns, with the objective of garnering as many cheap installs as possible for a new title. This approach of maximizing quantity may be necessary for building traction and word of mouth, but too much of a fixation on low CPIs leads to a whole bunch of downloads from game players with an unknown propensity for making in-app purchases, and constrains an advertiser’s ability to respond to low-supply scenarios (such as the holidays). As long as the F2P model dominates the mobile gaming industry, monetization will depend on app developers attracting high-value gamers.

What is Predictive Lifetime Value?

Predictive Lifetime ValueMaximizing user quality – and therefore return on investment – requires looking past CPA, where all new installs are weighted equally, to downstream actions, where repeat purchasers are differentiated from their less lucrative peers. Predictive Lifetime Value is empowering app developers to acquire more of those repeat purchasers, using value-based machine learning algorithms to optimize ad spend.

Here are three ways our software helps app developers like Zynga and Wooga optimize toward long-term revenue:

Affinity Analysis

Nanigans’ own lookalike modeling tool allows app developers to find new high-value customers at scale through identification of shared characteristics with existing best-performing mobile game audiences.

Maturity Curves

Nanigans combines historical data and results from paid media campaigns to create maturity curves for purchase behavior. This allows Nanigans Predictive Lifetime Value models to predict future revenue from purchasers based on their early activity.

Cohort Analysis

Understanding which customer segments generate the greatest lifetime value is critical to future campaign success. Our Cohort Analysis tool is a visual way of tracking in-app purchases – not just a few days after your ad campaign, but months down the line.

Predictive Lifetime Value in Action

Mobile gaming predictive lifetime value

When a leading mobile gaming company set out to achieve 49% ROI based on a CPA bidding model and mobile app install ads, Nanigans Predictive Lifetime Value was able to deliver the same ROI in half the time, and a 52% increase over the original goal by 7 days.

Smart direct response advertisers understand that there is no shortcut to high-quality customer acquisition; you get what you pay for. And in the case of cheap installs, in the long run you don’t get much.

eBook: Level Up Your Mobile App Install Game

This free eBook has social and mobile advertising best practices to make your next global game launch a huge success.

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