2. 1. LTV = long term retention x ARPU
A
B
D30 = 9.2%
D90 = 8.3%
D30 is not long term
LTV A: $9 vs B: 2.50
D30 = 9.1%
D90 = 0.2%
3. 2. Payback Time > ROI (for startups)
• ROI on ad spend is (obviously) a key metric.
• But startups can go bankrupt running ad campaigns
with 300%+ ROI...
• Cash reserves required to run $200K/month ad
spend for 12 months with 10 month payback time =
$1.5M+
4. 3. Gross Profit Margin is a thing
• Gross Profit Margin drives Net LTV
Income
Mobile revenue
Total Income
Cost of Sales
Chargebacks & Credits
Platform Fees
Hosting
IP Licensing Rev Share
Total Cost of Sales
Gross Profit
1,961,070
1,961,070
21,572
588,321
84,326
196,107
890,326
1,070,744
55%
• 10% IP/content licensing gross rev share =
10% lower Net LTV = 10% impact on
CPI/LTV arbitrage
• Can be worth it, e.g. if IP drives higher
CTR, conversion click/install, spender
conversion
• Ideally rev share after Marketing spend
(agree max marketing spend as % of gross
revenue with IP owner)
