What does it really mean to LTV than CPI?

If you are a hand marketer, you probably have seen ltv>cpi in the past year (user lifetime value is greater than per installation cost), this formula has proven to be an accepted rule, and almost become the game industry consensus. But, for hand-tour developers, LTV than the CPI really mean?

The answer is simple. LTV is higher and you can have more money to advertise and then do more than just watch the CPI for better results. In complex terms, from a sustainable long-term perspective, the LTV marketing team can guarantee a good ROI for the long-term commitment of the hand-travel studio.

The heyday of CPI

Before LTV became the most critical data for application marketing, marketers who focused on CPI quickly discovered the advantages and disadvantages of this approach. Because although the CPI may no longer be the most important data, it is still very important for hand-travel marketing.

First, the CPI is very easy to track. Even the initial analysis and summary, can provide developers with server to server-side matching or use tracking links to run activities.

Second, the CPI is more secure for advertisers than CPC (cost per click) and CPM (cost per mille), because it means that once a user has seen the shutdown, it is more likely to pay.

Third, and most importantly, the rapid development of the application market makes the CPI data can allow developers to control costs, to adopt the promotion method of buying flow. As the list becomes one of the main ways to get exposure, low-cost CPI installation is especially important.

However, as time has changed, the number of games has changed dramatically and the CPI has gone up. By the year 2013, expensive buying methods are becoming more and more difficult to work with, for many reasons.

Sustainability of LTV

Unsustainable CPI marketing explains that LTV has become one of the most important data for hand-travel marketing. A lot of games monetization professionals offer a lot of advice for applying data analysis and tracking, and game developers have many ways to choose their own high-quality marketing approach.

LTV's way of predicting the value that a user can bring to the company in the future, not just the current value, means that if you have a long-term cost, you can get a bigger income.

To explain this sentence, we may look at the following formula: ltv= average per user income (ARPU) X1. This way is actually very simple, a user's average income is his LTV in your hand, if you know your monthly average income of 5 U.S. dollars, 40% of users after January, you will find LTV calculation method: $ X 1/0.4 = $12.5, that is to say, Your hand Tour user LTV is 12.5 dollars.

So this can basically change the previous CPI promotion strategy, game developers now don't have to worry about getting as much as possible, theoretically, you can buy a download for 2 dollars without losing money, as long as 20% of the users can stay and end up spending 5 of dollars.

Better yet, if you can use depth analysis, you can even know how much a user actually pays, know which users are often IAP habits and user retention data, and you can take a very effective user access strategy over the long term.

LTV > CPI

Of course, the only way to focus on LTV is not without problems.

The deeper the data you dig, the more complex it becomes, and the more resources and facilities you need to work. If your investment increases or your income decreases, your LTV numbers need to change. Although the simple formula provided above can predict the value of the user, we all need to note that many large companies use mathematical methods to ensure that their predictions adapt to the changes they face.

But compared with the CPI approach, LTV is clearly more sustainable, so that developers from the marketing perspective to understand the user, thereby taking the strategy of obtaining high-quality users, which is also very suitable for hand-travel marketing needs.