Glossary of Terms

ARPDAU (Average Revenue Per Daily Active User)

Measures the average revenue per user in a one-day period. This metric can help give insight into the number of daily users necessary to meet a certain revenue goal.

How to calculate ARPDAU: ARPDAU = total daily revenue/daily active users

ARPE (Average Revenue Per Engagement)

Measures the average revenue generated each time a user engages with your platform. This metric is important for understanding the revenue generation efficiency of your business. It’s particularly helpful for platforms where user interactions can be directly linked to revenue.

How to calculate ARPE: ARPE = total revenue/total engagements

For example, if in a month, the total revenue is $5k and there were 1k engagements, the ARPE would be $5/engagement.

ARPU (Average Revenue Per User)

Typically calculated over a specific period such as a month or year, ARPU measures the average revenue received from a single user.

How to calculate ARPU: ARPU = revenue for period/total users for period.

For example, if your app generated $10k in January and had 500 users that month, the ARPU would be $20/user.

Ad Exchange

A digital marketplace where ad inventory can be bought and sold from various ad networks. Advertisers, agencies, and publishers are all considered users of an ad exchange. Pricing is typically determined by real-time bidding. The ad inventory is typically composed of display, video and mobile ads. Ad exchanges are a convenient way for advertisers to buy ads from many publishers at once instead of having to negotiate one-on-one.

Ad Impression

Quantifies the number of views an ad receives. These are not unique views, so the same person could potentially make up several impressions of a single ad.

Ad Inventory

The total amount of space a publisher has available for ads. This can help determine a publisher’s potential ad revenue.

Attribution Model

This is the framework used in digital marketing to determine how credit for sales and conversions is assigned to touchpoints in the customer journey. It can help you to determine which channels are most profitable.

CPA (Cost Per Action)

This is the cost paid by an advertiser for a specific action such as a sale or a signup.

How to calculate CPA: CPA = campaign cost/campaign actions

CPC (Cost Per Click)

Refers to the cost paid by the advertiser for each click on their ad. CPC helps advertisers evaluate the efficiency of their campaign and how well it resonates with the audience.

How to calculate CPC: CPC = campaign cost/total clicks

CPE (Cost Per Engagement)

The cost paid by an advertiser for each engagement with their ad. An engagement could be a click, comment, share, like, or any other specific action defined in the campaign. CPE is one way that advertisers measure how well their campaign is resonating with their audience.

How to calculate CPE: CPE = campaign cost/total engagements

CPI (Cost Per Install)

Refers to the cost advertisers pay for each app installation by a user. It is most commonly used in mobile marketing.

How to calculate CPI: CPI = campaign cost/total installs

CPM

Refers to the advertisers cost for generating 1,000 ad impressions.

How to calculate CPM: CPM = campaign cost/campaign impressions

For example a campaign that costs $500 and generates 100,000 impressions has a CPM of $5.

CPV (Cost Per View)

A video advertising metric that shows how much the advertiser pays for each video view.

How to calculate CPV: CPV = total campaign cost/number of views

CTR (Click Through Rate)

The ratio of users who click on a link to the total number of views. CTR can help advertisers determine how well the content is driving viewers to learn more (click).

How to calculate CTR: CTR = total clicks/total impressions

CVR (Conversion Rate)

Refers to the percentage of users who take the desired action divided by the total number of users who could have taken the desired action. Conversion rate is a crucial metric for knowing the overall effectiveness of an advertising campaign.

How to calculate CVR: CVR = (total conversions/total visitors) * 100%

Churn Rate

Also known as attrition, this is the percentage of users who drop off an app or platform during a given time frame. It can help you identify why customers are leaving and how well your retention strategies are working. Publishers typically want to keep their churn rate as low as possible to protect their revenue.

How to calculate churn rate: Churn rate = (lost customers/number of customers in the timeframe) * 100

Currency Conversion Ratio

Refers to the exchange rate between virtual currency and real-world currency, or between different virtual currencies within a platform. For example, a gaming app with users in Asia and North America will have different currency ratios for each geography.

DAU (Daily Active Users)

A metric showing the total number of unique users who engage with an app or website in a 24-hour period.

Engagement Metrics

These are data points that represent how engaged users are with content or an app. These data points include things like likes, shares, comments, time spent, saves, etc.

Engagement Rate

Measures the level of engagement an ad or content piece receives from the audience. Engagements often include likes, shares, comments, etc. Engagement rate often measures how well your content is resonating with the audience. If you’re creating high-quality content and sharing it with the right audience, your engagement rate will likely be high.

How to calculate engagement rate: Engagement rate = (total engagements/total reach) * 100%

Hard Currency

In-app currency that is typically purchased with real-world money. It is often represented by high-value items and can be used to buy premium items in the game. Hard currencies usually help players progress more quickly.

IAP (In-App Purchase)

A purchase made within a mobile app. It may include digital goods, content, rewards, subscriptions, etc.

IAP (In-App Purchase) Store

A virtual storefront in a website or app where users can buy digital goods and services.

Incentivized Traffic

Refers to users who engage with ads in exchange for rewards like virtual currency or items.

Incremental Revenue

The additional revenue generated by a particular action or campaign above the baseline revenue. Offerwall revenue is often considered incremental revenue because it represents additional revenue above and beyond the app’s primary revenue.

K-Factor

A marketing metric that shows the rate at which users refer new users. This metric measures an app’s virality and the rate at which an app gains new users with no additional marketing costs.  

How to calculate K-factor:

• K-factor = i * c

• I = the number of invites per user

• C = conversion rate of each invite

LTV (Lifetime Value)

Refers to the total revenue a business expects from a single customer throughout the duration of the relationship. LTV is an important metric for understanding how much a publisher can profitably spend on user acquisition.

How to calculate LTV:

1. The average value of a sale * the number of transactions * the average retention time or…

2. …ARPDAU * customer lifetime

MAU (Monthly Active Users)

The total number of unique users who engage with an app or website in a one-month period.

Mobile Measurement Partner (MMP)

A platform that helps advertisers measure the effectiveness of their mobile marketing campaigns by tracking metrics including app installs and in-app activity. They are often integrated into the publisher’s site or app to collect and transmit data back to the advertiser.

Non-Incentivized Traffic

Users who interact with ads or apps without any direct reward. They are typically motivated by interest or relevance.

Offerwall

A feature in an app that lists various offers from advertisers. Users can complete these offers which include surveys, brand, and gaming offers in order to receive digital rewards and currency that they can use in the app. Offerwalls are often a popular advertising choice for gaming apps.

Unlike many other forms of advertisements, users select when and how they engage with the offerwall. This makes it more appealing than other intrusive forms of advertisements and thus it tends to have an attractive engagement rate that is appealing to both advertisers and publishers.

Organic

User actions or traffic that occurs naturally (or for free) without the use of paid advertising efforts. Organic advertising strategies are often used together with paid advertising strategies, especially on channels like social media.

Postback

Used in digital advertising to send data between advertisers and publishers. It’s a helpful metric for tracking conversions and other user actions.

Publisher

Refers to an individual or company that produces and distributes a mobile app or website and offers ad inventory for sale. In the context of an offerwall, publishers integrate offerwalls on their app or website, thereby surfacing a variety of ads from advertisers that users can complete to earn rewards.

ROAS (Return On Ad Spend)

Measures the revenue generated per dollar spent on advertising. This metric offers important insights into whether your ads are resonating and converting.

How to calculate ROAS: ROAS = campaign revenue/campaign cost

ROI (Return On Investment)

Measures the profitability of an investment. Because ROI is a percentage and not a dollar amount, it’s easy to compare ROI across a range of investments to determine which is most profitable.

How to calculate ROI: ROI = (net profit/investment cost) * 100

Reach

The total number of unique individuals who view your content. While impressions can include multiple views from the same individual, reach only counts unique content views.

Retention Rate

The percentage of users who continue to use a website or app over time. It offers valuable insight into how “sticky” an app or website is for a user.

How to calculate retention rate: Retention rate = (number of users at the end of a period/number of users at the start) * 100

SDK (Software Development Kit)

A collection of software tools and programs provided by software vendors to create applications for specific platforms. For example, a publisher wanting to integrate an offerwall typically does so with an SDK.

Traffic Driver

A tool or strategy used in order to increase visitor traffic to a website or app. This includes techniques such as SEO, social media, email marketing, and offerwalls.

User Acquisition

The process of gaining new users for digital business and mobile apps. It involves strategies for increasing user base. An offerwall is an example of a user acquisition tool.

WAU (Weekly Active Users)

The number of unique users who engage with an app or website in the period of a week.

Weblink

A hyperlink that connects one webpage to another on the internet, allowing users to navigate between pages and websites easily.

eCPM

Refers to the estimated earnings of an ad per 1,000 impressions. It’s a helpful metric for comparing the effectiveness of different advertising campaigns.

In the case of offerwalls, eCPM is a common metric that helps publishers determine the amount of revenue they can expect to receive from the offerwall. Offerwalls typically boast high eCPMs because the audience is already engaged and motivated to participate.