What is LTV?
LTV stands short for Lifetime Value. This app metric is used to predict how much revenue the average user will generate during their entire lifetime in an app. This includes revenue generated from all sources, from in-app ads to in-app purchases and subscriptions.
Why is LTV important?
LTV is one of the most commonly used KPIs in the mobile industry, both for app development and advertising.
Developers use LTV insights to determine how effective their apps are at monetizing and retaining users. For app marketers, this metric is important because it tells them how much they can afford to spend on a single user and remain profitable.
How to calculate Lifetime Value?
There is no universally accepted formula for calculating lifetime value, which is an ongoing discussion subject in the industry.
One of the simplest ways to calculate LTV is by using ARPDAU, assuming you keep track of this metric. To calculate lifetime value, multiply ARPDAU by the average user lifetime.
