The top 20 matrices you need to know about in-app advertising are as follows:-
Impressions, in the context of in-app advertising, refer to the number of times the display of an ad on a website or platform. Each time an ad displays to a user, it counts as one impression. Impressions are important because they are for measuring the reach and effectiveness of an advertising campaign.
2. Click-through rate (CTR):
The percentage of users who clicked on an ad after seeing it.
Click-through rate (CTR) is a metric for measuring the effectiveness of an online advertising campaign. It represents the percentage of people who click on an ad after viewing it. The formula for calculating CTR is as follows:
CTR = (Number of clicks / Number of impressions) x 100
For example, if an ad runs 1,000 times and receives 50 clicks, the CTR would be 5%:
CTR = (50 / 1,000) x 100 = 5%
3. Conversion rate:
The percentage of users who took a desired action, such as making a purchase or signing up for a service, after clicking on an ad.
4.Cost per impression (CPI):
The cost of displaying an ad to 1,000 users.
It typically uses online advertising campaigns, where ads display on websites, search engines, or social media platforms.
CPI is calculated by dividing the total cost of the advertising campaign by the number of impressions generated by the campaign. The formula for calculating CPI is as follows:
CPI = Total cost of campaign / Number of impressions
For example, if an advertiser paid $1,000 for an advertising campaign that generated 100,000 impressions, the CPI would be $0.01:
CPI = $1,000 / 100,000 = $0.01
5. Cost per click (CPC):
The cost of each click on an ad.
The formula for calculating CPC is as follows:
CPC = Total cost of campaign / Number of clicks
For example, if an advertiser paid $500 for a PPC campaign that generated 100 clicks, the CPC would be $5:
CPC = $500 / 100 clicks = $5
6. Cost per acquisition (CPA):
The cost of acquiring a new user or customer through an ad campaign.
Basically, CPA is calculated by dividing the total cost of an advertising campaign by the number of conversions it generates. The formula for calculating CPA is as follows:
CPA = Total cost of campaign / Number of conversions
For example, if an advertiser paid $1,000 for an advertising campaign that generated 100 conversions (such as purchases, sign-ups, or form completions), the CPA would be $10:
CPA = $1,000 / 100 conversions = $10
The revenue that generated from an ad campaign is compared to the cost of running the campaign.
8. Engagement rate:
The percentage of users who interacted with an ad, such as by watching a video or filling out a form.
The percentage of an ad that was visible to users on their screens.
10. Completion rate:
The percentage of users who watched an entire video ad.
11. Time spent on the app:
The amount of time users spend in an app can indicate the effectiveness of ads within the app.
12. Session duration:
The length of time a user spends in a single session within an app.
13. Active users:
The number of users who have engaged with an app within a given period.
14. Churn rate:
The percentage of users who stop using an app over time.
Accordingly, the churn rate refers to the percentage of customers or subscribers who discontinue using a product or service over a given period. A high churn rate can be an indication of problems with the product or service, poor customer service, or a lack of engagement with customers.
For example, if a company had 1,000 customers at the beginning of a month and 100 of them discontinued using the product or service during that month, the churn rate would be 10%.
15. Lifetime value (LTV):
The total revenue generated by a user throughout their lifetime within an app.
The formula for calculating LTV is as follows:
LTV = ACV x ACL
For example, if a customer spends an average of $100 per month and stays with a business for an average of 2 years, the LTV would be $2,400:
LTV = $100 x 24 months = $2,400
The number of times an ad is shown to a single user.
For example, if a campaign has delivered 50,000 impressions and has reached 10,000 unique users, the frequency would be 5:
Frequency = Number of impressions / Number of unique users
The number of unique users who have been exposed to an ad campaign.
Reach is typically calculated by analyzing the number of impressions an ad receives, but it refers to the total number of times an ad is displayed on a website or app. However, it’s important to note that reach and impressions are not the same things. Impressions refer to the number of times an ad is displayed, while reach refers to the number of people who see it.
Reach can be expressed as a raw number, such as 10,000 people, or as a percentage of a target audience. For example, if a campaign is targeting women aged 18-34 and the ad has a reach of 50,000, the reach can be expressed as a percentage of the total number of women in that age group.
18. Targeting effectiveness:
How accurately an ad campaign targets the desired audience on in-app advertising.
Also, it is a measure of the percentage of the audience that is relevant to the advertiser’s product or service. The formula for calculating targeting effectiveness is as follows:
Targeting effectiveness = (Number of impressions delivered to target audience / Total number of impressions delivered) x 100
For example, if a campaign targeting women aged 18-34 delivered 50,000 impressions to that audience out of a total of 100,000 impressions delivered, the targeting effectiveness would be 50%:
Targeting effectiveness = (50,000 / 100,000) x 100 = 50%
19. Ad engagement rate:
The percentage of users who engaged with an ad after seeing it.
The formula for calculating the ad engagement rate is as follows:
Ad engagement rate = (Number of ad engagements / Number of ad impressions) x 100
For example, if an ad received 10,000 impressions and 500 engagements, the ad engagement rate would be 5%:
Ad engagement rate = (500 / 10,000) x 100 = 5%
20. Click-to-install rate:
The percentage of users who clicked on an ad and then installed the app.
CIR is calculated by dividing the number of app installs generated with an ad campaign by the number of clicks on the ad. The formula for calculating CIR is as follows:
CIR = (Number of app installs / Number of ad clicks) x 100
For example, if an ad generated 1,000 clicks and 100 of those clicks led to app installations, the CIR would be 10%:
CIR = (100 / 1,000) x 100 = 10%