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The Most Important Metrics
for Scaling your UA
2nd October 2019
Martin Macmillan - CEO
The Most Important Metrics for Scaling your UA
About Pollen VC
Now!
2
We provide lines of credit to developers which enable them
to fund their business better and grow using paid UA
Our model is a flexible and non-dilutive alternative to equity
financing, allowing developers to retain control while growing
their business
Our mission is to get start-ups to think about capital efficiency,
using the right type of funding for the right purpose
The Most Important Metrics for Scaling your UA
Three Fundamental Questions
3
Do I have a machine?
1.
How do I fund the
machine?
2.
How do I know when
my machine is running
at full capacity?
3.
The Most Important Metrics for Scaling your UA
CAC and LTV
Now!
4
Acquisition cost
CPI, CPA, CPE etc.
Whatever makes sense for
your game
LTV
“North Star” metric
How much will you earn from
a player IAP/Ad revenue
The Most Important Metrics, When to Scale your UA
How to calculate LTV
5
https://ltvcalculator.pollen.vc
The Most Important Metrics for Scaling your UA
Your UA Recipe
6
$1.00 invested
results in $1.89 of LTV
after 90 days
The Most Important Metrics for Scaling your UA
Focus on ROAS
Now!
7
$0.00
$0.50
$1.00
$1.50
$2.00
April 1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47 49 51 53 55 57 59 61 63 65 67 69 71 73 75 77 79 81 83 85 87 89
50%
ROAS
75%
ROAS
Breakeven
100%
ROAS
125%
ROAS
150%
ROAS
175%
ROAS
LTV Cut-off
$1.89
The Most Important Metrics for Scaling your UA
Most Expensive $
Least Expensive $Exhaust the least expensive
bucket before moving onto
the next one
How do you fund
the machine?
Now!
8
Credit Line from Ad Network
Cash at Bank (eg from free cashflow of an existing app)
Credit Cards
Lines of Credit secured against accounts receivable (AR)
VC Funding
Factor in the cost of financing
ROAS
Break out ROAS to a monthly
return
Important to consider financing
cost on the same basis
Focus on the return…
ROAS
20%
Financing 2%
PROFIT
18%
The Most Important Metrics for Scaling your UA
Focus on investment and return
Now!
10
Increasing Ad Spend - Externally Financed
Monthly
ROI
Monthly
ROI
20% 15%
1
Monthly ROI
Decreases
2%
3%
Cost to
Finance
Cost to
Finance
2
Financing Cost
Increases
18% 12%
Profit
Profit
3
Still Generating
Healthy Profit
How to know when
your machine is running
at full capacity
The Most Important Metrics for Scaling your UA
Now!
12
LTV
CAC
Acquisition Costs Rise over time
LTV falls as you scale
Model the shape of your curve - this
defines how much you can use paid UA to
scale
Feed this into your overall strategy of what
games you are building and for whom…
Now!
Installs
$
Economics of UA
The Most Important Metrics for Scaling your UA
Now!
13
The Most Important Metrics for Scaling your UA
Takeaways…
14
Get realistic estimates
of CAC and LTV
1.
Figure out how you
are going to finance
your growth
2.
Keep monitoring and
measuring your machine
to keep it working at
full capacity
3.
Thanks!
martin@pollen.vc

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The Most Important Metrics for Scaling Your User Acquisition

  • 1. The Most Important Metrics for Scaling your UA 2nd October 2019 Martin Macmillan - CEO
  • 2. The Most Important Metrics for Scaling your UA About Pollen VC Now! 2 We provide lines of credit to developers which enable them to fund their business better and grow using paid UA Our model is a flexible and non-dilutive alternative to equity financing, allowing developers to retain control while growing their business Our mission is to get start-ups to think about capital efficiency, using the right type of funding for the right purpose
  • 3. The Most Important Metrics for Scaling your UA Three Fundamental Questions 3 Do I have a machine? 1. How do I fund the machine? 2. How do I know when my machine is running at full capacity? 3.
  • 4. The Most Important Metrics for Scaling your UA CAC and LTV Now! 4 Acquisition cost CPI, CPA, CPE etc. Whatever makes sense for your game LTV “North Star” metric How much will you earn from a player IAP/Ad revenue
  • 5. The Most Important Metrics, When to Scale your UA How to calculate LTV 5 https://ltvcalculator.pollen.vc
  • 6. The Most Important Metrics for Scaling your UA Your UA Recipe 6 $1.00 invested results in $1.89 of LTV after 90 days
  • 7. The Most Important Metrics for Scaling your UA Focus on ROAS Now! 7 $0.00 $0.50 $1.00 $1.50 $2.00 April 1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47 49 51 53 55 57 59 61 63 65 67 69 71 73 75 77 79 81 83 85 87 89 50% ROAS 75% ROAS Breakeven 100% ROAS 125% ROAS 150% ROAS 175% ROAS LTV Cut-off $1.89
  • 8. The Most Important Metrics for Scaling your UA Most Expensive $ Least Expensive $Exhaust the least expensive bucket before moving onto the next one How do you fund the machine? Now! 8 Credit Line from Ad Network Cash at Bank (eg from free cashflow of an existing app) Credit Cards Lines of Credit secured against accounts receivable (AR) VC Funding
  • 9. Factor in the cost of financing ROAS Break out ROAS to a monthly return Important to consider financing cost on the same basis Focus on the return… ROAS 20% Financing 2% PROFIT 18%
  • 10. The Most Important Metrics for Scaling your UA Focus on investment and return Now! 10 Increasing Ad Spend - Externally Financed Monthly ROI Monthly ROI 20% 15% 1 Monthly ROI Decreases 2% 3% Cost to Finance Cost to Finance 2 Financing Cost Increases 18% 12% Profit Profit 3 Still Generating Healthy Profit
  • 11. How to know when your machine is running at full capacity
  • 12. The Most Important Metrics for Scaling your UA Now! 12 LTV CAC Acquisition Costs Rise over time LTV falls as you scale Model the shape of your curve - this defines how much you can use paid UA to scale Feed this into your overall strategy of what games you are building and for whom… Now! Installs $ Economics of UA
  • 13. The Most Important Metrics for Scaling your UA Now! 13
  • 14. The Most Important Metrics for Scaling your UA Takeaways… 14 Get realistic estimates of CAC and LTV 1. Figure out how you are going to finance your growth 2. Keep monitoring and measuring your machine to keep it working at full capacity 3.