Game Development Reference
In-Depth Information
LTV (lifetime value) of a user represents the total amount of money you expect
to be able to extract from a user through the course of your relationship with
them. For example, if an average user gives you \$1 per month, and you expect
to maintain each user for an average of 24 months before they move on, then
you can estimate an LTV of \$24 per user. If you compare this number against
your UAC and determine that you can acquire a new user for only, say, \$14,
then you can predict your profits. Obviously, user retention is key to increasing
your product's per-user LTV.
LTNV: Lifetime Network Value
Your users have a dollar value to you beyond their own direct payments. The
degree to which they are able to recruit friends to join them, or enhance the
play experience of their friends (thus adding stickiness to the game) both have
a value to you as the game's creator. For each user you add, how many friends
will they recruit? LTNV (lifetime network value) is very difficult to calculate
with accuracy. However, despite being challenging to calculate accurately,
understanding what this value approximates to for a particular game can help
inform decisions about how to spend marketing money to attract new users.
5.4 Social Network Advertising
CTR: Click-Through Rate
An online ad—be it a banner ad, a direct Facebook ad, or one of those loath-
some popups—can be measured for efficacy by calculating the number of peo-
ple who click on it divided by the number of people who see it. Theoretically,
at least, CTR (click-through rate)—usually expressed as a percentage—
describes how successful the ad is at converting awareness to interest. If the
user sees it, he or she is suddenly aware of the offer. If the user clicks it, he
or she has expressed interest. For example, if 100,000 people see an advertise-
ment, and 400 of them click on it, the ad has a CTR of .4 percent.
CVR: Conversion Rate
After your potential users have expressed sufficient interest in an advertisement
or a free-to-play trial, some of them decide to express their desire by either
installing your game or paying you something. In either case, this conversion
from interest to desire-driven action is described as CVR (conversion rate).
Conversion rates are typically expressed as a percentage and must be given