MENLO PARK, Calif., Nov. 14, 2016 /PRNewswire/ -- Verto Analytics, the world's first consumer-centric measurement company, today announced a new methodology for determining the value of a mobile app user based on its newly launched Verto Retention Reports™. The framework gives mobile app developers and digital publishers a more accurate way to understand how their app retention compares against their competitors and identify the strongest potential new users. For the first time, companies can calculate the ROI of their ad spending on mobile.
Verto's App Watch data* shows that fewer than two percent of all mobile downloads lead to long-term users who can then be monetized through in-app purchasing or mobile advertising. While downloads can be an initial measure of app success, the high rate of initial user churn makes it more important to measure long-term retention and value. Verto's framework introduces a more relevant way for app publishers and advertisers to connect audience acquisition costs to long-term user value. This can help them optimize future campaign spend for the right types of users and measure profitability on an app title or consumer segment. Consumers install hundreds of apps during a typical year, but only 18 apps are used on a weekly basis and only seven apps are used on a daily basis. Verto's App Watch data indicate that most apps retain only 5-10% of users after 30 days. Furthermore, the market for buying downloads is supply-constrained, and the competition on the demand side is increasing. Average CPI (cost-per-install) levels have gone up year after year. Instead, the key to acquiring loyal and profitable users should be based on the rigorous measurement of the potential size, structure, quality, and profile of the app audience. It is also crucial to benchmark a given app publisher's performance against competitors.