Downloaded 1,119 times
Uploaded byEric Seufert
Two Methods for Modeling LTV with a Spreadsheet
The document discusses two methods for modeling lifetime value (LTV) using spreadsheets, focusing on the importance of LTV in marketing for freemium games. It outlines how to calculate LTV based on retention and monetization data, providing formulas and examples for both timelines of 180 and 365 days. Additionally, it emphasizes refining the model with real data to enhance accuracy.
More Related Content
Similar to Two Methods for Modeling LTV with a Spreadsheet
![[Webinar] AppAgent _ ROAS Predictions for Grandmas.pdf](https://cdn.slidesharecdn.com/ss_thumbnails/webinarappagentroaspredictionsforgrandmas-221124124625-2241c4c7-thumbnail.jpg?width=640&height=640&fit=bounds)
Two Methods for Modeling LTV with a Spreadsheet
- 1. TWO METHODS FOR MODELINGLTV WITH A SPREADSHEET Eric Benjamin Seufert Slush 2013
- 2.
- 3. WHO AM I? Headof Marketing at Wooga
- 4. WHO AM I? Headof Marketing at Wooga MobileDevMemo.com
- 5. WHO AM I? Headof Marketing at Wooga MobileDevMemo.com Freemium Economics
- 6. DOWNLOAD THE SPREADSHEET 100k rowsof fake data
- 7. DOWNLOAD THE SPREADSHEET 100k rowsof fake data • Probably doesn’t look like real data!
- 8. DOWNLOAD THE SPREADSHEET 100k rowsof fake data • Probably doesn’t look like real data! http://bit.ly/183lFwp
- 9.
- 10.
- 11.
- 12. DIFFICULT TO CALCULATEFOR FREEMIUM GAMES
- 13.
- 14. GOOD REASONS TOCALCULATE LTV IN A SPREADSHEET
- 15. GOOD REASONS TOCALCULATE LTV IN A SPREADSHEET Prototyping using comparable data
- 16. GOOD REASONS TOCALCULATE LTV IN A SPREADSHEET Prototyping using comparable data Project investment decisions
- 17. GOOD REASONS TOCALCULATE LTV IN A SPREADSHEET Prototyping using comparable data Project investment decisions Sprint prioritizations
- 18. GOOD REASONS TOCALCULATE LTV IN A SPREADSHEET Prototyping using comparable data Project investment decisions Sprint prioritizations General strategic decision making
- 19. WHAT ARE THEINPUTS TO LTV?
- 20. WHAT ARE THEINPUTS TO LTV? Monetization (Value)
- 21. WHAT ARE THEINPUTS TO LTV? Monetization (Value) Retention (Lifetime)
- 22.
- 23.
- 24.
- 25. LTV TIMELINE 180 daysor 365 days? Spreadsheet shows both
- 26.
- 27.
- 28.
- 29. ESTIMATING LIFETIME Power Function:y = a * x ^ b a -> =EXP(INDEX( LINEST( LN(Known Ys), LN(Known Xs)), 2)) b -> =INDEX(LINEST(LN(Known Ys), LN(Known Xs)), 1)
- 30. ESTIMATING LIFETIME Area underthe curve
- 31. ESTIMATING LIFETIME Calculating lifetime: •Retention curve essentially a survival function More info: http://data.princeton.edu/wws509/notes/c7.pdf
- 32. Example survival curvesfor two groups of patients given different Leukemia treatments Source: Survival Analysis, a Self-Learning Text (Klein 2005) http://books.google.de/books?id=GNhzxRkFnJ0C&lpg=PA262&ots=Z3foUkFg-4
- 33. ESTIMATING LIFETIME Calculating lifetime: •Retention curve essential a survival function • Mean is value of integral More info: http://data.princeton.edu/wws509/notes/c7.pdf
- 34. CALCULATING LTV Build retentionfunction:
- 35. CALCULATING LTV Build retentionfunction: Retention curve power function model (y=ax^b)
- 36. CALCULATING LIFETIME Build retentionfunction: Lifetime (180): Integral (1 -> 180): Y = 0.61x ^ -0.37 = 25.3 Days Lifetime (365): Integral (1 - > 365): y = 0.61x ^ -0.37 = 40.1 Days
- 37. CALCULATING LTV For thetrailing 7 days of data…
- 38. CALCULATING LTV For thetrailing 7 days of data… …for users in the UK…
- 39. CALCULATING LTV For thetrailing 7 days of data… …for users in the UK… …that downloaded the game organically…
- 40. CALCULATING LTV LTV(180): 25.3 *$0.13 = $3.30 LTV(365): 40.1 * $0.13 = $5.21
- 41. HONING THE MODEL Morereal data
- 42. HONING THE MODEL Morereal data
- 43.
- 44.
- 45. MONETIZATION-BASED APPROACH Real Average DailyCumulative Spend Data
- 46.
- 47. PROJECTING THE CURVE LogarithmicFunction: y = (c * LN( x )) + b c -> =INDEX(LINEST(Known Ys, LN(Known Xs)), 1) b -> =INDEX(LINEST(Known Ys, LN(Known Xs)), 1,2)
- 48.
- 49. CALCULATING LTV Build monetizationfunction:
- 50. CALCULATING LTV Build monetizationfunction: Monetization curve logarithmic model ( y = ( c * ln( x )) + b)
- 51.
- 52. CALCULATING LTV Using trailing3 days of retention data…
- 53. CALCULATING LTV Using trailing3 days of retention data… …for users in the US…
- 54. CALCULATING LTV Using trailing3 days of retention data… …for users in the US… …acquired through Flurry Video Ads…
- 55. CALCULATING LTV Using trailing3 days of retention data… …for users in the US… …acquired through Flurry Video Ads… y(180) = ( .45 * ln (180)) + .41 = $2.75 y(365) = ( .45 * ln( 365 )) + .41 = $3.06
- 56.
- 57.
- 58.