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Cohort Analysis: The Digital Advertiser’s Key to Unlocking Lifetime Value

Written by: Carolyn Berk, Content Marketing Associate

Advertisers looking for long-term success need to focus on the lifetime value (LTV) that particular campaigns generate — not just days after launch, but over the following weeks and months. To determine which campaign attributes (such as creative, targeting, ad type, geo-location, gender, or interests) are driving the greatest LTV, you need Cohort Analysis. This powerful reporting tool within Nanigans is the key to unlocking campaign optimization over time.

What Is Cohort Analysis?

Cohorts are groups of people who share certain characteristics. Cohort Analysis is a common and powerful methodology used by marketers to understand how different groups behave over the long-term. Nanigans’ Cohort Analysis tool empowers advertisers to identify the value generated by ad placements and customers in the days, weeks, and months after ads are initially delivered. The tool was designed to be both intuitive and highly customizable, enabling advertisers to quickly take action on emerging trends and patterns.

How Does Cohort Analysis Help Digital Advertisers?

Cohort Analysis gives you a visual way to track the metrics that matter most to your team. With Cohort Analysis, you can easily understand which customer segments have generated the greatest lifetime value, and use that knowledge to reach similar audiences through digital advertising.

Cohort Analysis

For example, in the Cohort Analysis above, the advertiser is comparing revenue generated by weekly groupings of Facebook ad placements during the 15 days after the ad campaign went live. Above, we can see the total number of purchases generated by each cohort, and easily surface details about groups of users within this ad campaign. A darker shaded cohort cell indicates better performance, and the point at which text turns from black to white indicates when these cohorts generated a positive return on ad spend.

How Does Cohort Analysis Help Improve Campaign Performance?

IGG Ad Cohort AnalysisMobile gaming company IGG wanted to grow the user base of its new game, Lords Mobile, recognizing that the game launch was a critical time for reaching users with high LTV. In addition, multiple targeted geographies and audience attributes presented unique challenges and opportunities for granular campaign optimization.

Knowing this, IGG’s marketing team set out with a refined Facebook advertising strategy that centered on hitting key audience monetization milestones. These targets included 7, 14, 30, and 90-day return on ad spend (ROAS) goals, all while adhering to specific cost per install (CPI) constraints. By using Cohort Analysis, IGG was able to identify purchase trends of new users and set the correct attribution window. This approach allowed the team to then use value-based bidding to maximize return on ad spend by optimizing on downstream, revenue-generating actions within the game.

Cohort Analysis allowed IGG to see what was — and wasn’t — working during the marketing launch of Lords Mobile, and adjust their Facebook advertising campaigns accordingly. Within a 4-month period, IGG saw impressive results:

IGG case study Cohort Analysis

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