LTV – or ‘lifetime value’ – is the total revenue that is expected from a given player. As players may play for many years, a time frame is needed for practical calculation. As such LTV is usually defined as the average net revenue per player within 365 days from install.
LTV is most helpful for calculating ROI (return on investment):
LTV – eCPI = per player profit
To be able to estimate if a UA (‘user acquisition’) campaign will be profitable it is therefore important to estimate LTV from a given source quickly. Many companies use leading indicators such as early retention and monetisation to model LTV for a given marketing campaign cohort.
This term is interchangeable with ARPU.