In the world of mobile app and game monetization, there’s no shortage of metrics to obsess over. You’ve probably spent countless hours tweaking strategies, fine-tuning waterfalls, and optimizing ad placements—all with one goal in mind: maximizing revenue.
But here’s a truth that most publishers discover too late: If you’re optimizing based on just a handful of key metrics, you may be leaving money on the table.
You’re likely familiar with the big three that everyone in the industry talks about: eCPM, ARPDAU, and LTV. Each one has its allure, its benefits, and—yes—its blind spots. But which one should you really focus on to maximize the value of your inventory over time?
Let’s break down each of these metrics and uncover why, despite their importance, none of them can paint the whole picture on their own.
eCPM: The Quick Fix Everyone Loves
Let’s start with eCPM, the metric that makes your ad strategy feel like it’s firing on all cylinders. It’s the number you can easily compare across different networks, geos, and ad formats. When your eCPM is high, it’s like getting a high grade on your monetization test paper—who wouldn’t want that?
But, as with any great temptation, there’s a catch.
The Trap:
When eCPM is your guiding star, it can lead to misinformed decisions. Sure, a high eCPM means you’re getting paid well for your impressions, but are those impressions really delivering value to your users? What if the demand that’s paying top dollar is being served to low-engagement users, or worse, users who are about to churn?
Imagine this: you’re running a lucrative rewarded video ad campaign, but the format is causing user frustration. Some of your users are engaging with the ads, but others are bouncing before they finish. Your eCPM stays healthy, but the overall experience suffers.
The Reality:
High eCPM can sometimes mask other underlying issues, like low user retention or high churn. eCPM is a snapshot of the ad’s value in isolation, not how it fits into your broader monetization strategy. It’s a crucial metric, but it’s not enough to rely on alone.
Additionally, a high eCPM can sometimes be misleading. It may be the result of a high floor price, which could lead to lower fill rates—ultimately reducing your total revenue. For example, a publisher might boast a $100 eCPM, but if it’s paired with a significantly low fill rates, the actual monetization output is far from optimal. In such cases, the high eCPM looks impressive but indicates under-optimized monetization.
That said, eCPM remains a highly effective metric for day-to-day performance management. It allows you to benchmark and compare revenue performance across different ad formats and geographies quickly—helping you make informed tactical decisions.
ARPDAU: A Glimpse Into Daily Performance
So, maybe you decide to take a closer look at ARPDAU—Average Revenue Per Daily Active User. This is a bit more user-centric and gives you a better sense of how much each active user is contributing to your daily revenue. ARPDAU is often a much more immediate and tangible metric compared to eCPM, giving you insights into the daily health of your app or game.
It sounds like a great improvement, right?
The Trap:
Here’s where things start to get trickier. ARPDAU can give you a solid read on how much revenue you’re earning from your users today, but it doesn’t reveal whether that revenue is sustainable. It doesn’t tell you how much each user will be worth in the long run—and it doesn’t give you visibility into how your monetization strategy might be affecting future retention.
Picture this scenario: you’ve just introduced a new ad format that boosts ARPDAU significantly, but the format is too aggressive for your low-engagement users. You might see a rise in ARPDAU today, but what happens when those users drop off in the next few days?
The Reality:
ARPDAU is great for understanding immediate monetization potential, but it doesn’t show you the bigger picture of how your ad strategy is impacting lifetime user value. While it’s important to track daily revenue per user, it shouldn’t be the only thing you’re optimizing.
LTV: The Elusive Metric That Tells You the Whole Story
Now, let’s take a step back and talk about LTV—Lifetime Value. Unlike eCPM or ARPDAU, LTV doesn’t just look at a slice of your revenue pie—it looks at the entire pie over time. LTV takes into account how much each user will generate over their entire lifespan with your app or game, incorporating everything from ad revenue to in-app purchases.
Sounds perfect, right? But why do so many publishers still focus on those “quick-win” metrics like eCPM and ARPDAU?
The Catch:
LTV isn’t easy to calculate on a daily or weekly basis. You can’t just glance at it and get a quick answer—it requires real-time user data, cohort analysis, and predictive modeling to get an accurate forecast of a user’s value over time.
Additionally, an over-focus on LTV might lead to short-term sacrifices, like missed opportunities for immediate revenue or neglecting lower-value users who could grow into high-value customers.
That’s a lot of complexity to handle. And while many publishers have dashboards full of eCPM and ARPDAU data, LTV often requires a deeper integration across user acquisition, retention, and monetization to be useful. It’s a longer-term commitment, but it’s the only way to understand your users’ true worth.
The Reality:
While LTV is a powerful metric that paints the long-term picture of a user’s value, it’s not always the most actionable or reliable indicator in the short term. Its predictive nature can be misleading when market dynamics shift unexpectedly, or if data isn’t mature enough to provide accurate estimates.
On the flip side, metrics like eCPM and ARPDAU provide quick, actionable insights that help optimize day-to-day operations. These metrics allow for fine-tuning ad placements, maximizing immediate ad revenue, and offering a more granular view of user behavior. However, relying solely on them without considering the long-term revenue potential can create an unsustainable business model.
Ultimately, the best practice for building a sustainable, profitable business lies in continually optimizing both immediate revenue and long-term value, and LTV plays a critical role in that equation when approached with a full understanding of its potential—and limitations.
Actionable Insights from Crackle: Combining these metrics allows for a more comprehensive understanding of monetization performance.
- High eCPM, Low ARPDAU: Ads may be valuable, but aggressive setups or high floors can hurt session time—leading to lower user engagement and reduced ARPDAU.
- High ARPDAU, Falling LTV: Suggests short-term monetization strategies may be harming long-term user retention.
- High LTV, Low eCPM: Points to opportunities in optimizing ad placements or formats to increase immediate revenue.
So, What’s the Right Metric for You?
If you’ve read this far, you know there’s no simple answer to the age-old question of which metric to prioritize. Each one—eCPM, ARPDAU, and LTV—plays an important role in your strategy. But here’s the key: Don’t let yourself get lost in the metrics.
While eCPM and ARPDAU are essential for daily optimization and immediate insights, they should never be the only thing driving your monetization decisions. The real question is: What’s the long-term value of your users? And that’s where LTV comes into play.
LTV will guide you toward more sustainable, intelligent revenue decisions that compound over time—because it’s not just about how much you make today, but how much you can make tomorrow.
So, the next time you look at your numbers, don’t just celebrate the highs of eCPM or ARPDAU—ask yourself: How does this impact the long-term value of my users?
In the end, that’s the only question that truly matters if you want to build a business that lasts.
