Mobile advertising is dynamic, and the behavior of mobile users is constantly evolving. Cohort analysis allows you to track how different cohorts of users respond to your marketing campaigns over time, enabling you to adjust marketing strategies to better reach your target audience. Let's find out what cohorts are available in SplitMetrics Acquire, why their analysis is so important, and how you can use them in automated rules.
What cohorts can you track in SplitMetrics Acquire?
There are two main optimization models in advertising, cost per action (CPA) and return on advertising spend (ROAS).
For CPA-based optimization, you can monitor custom conversion cohorts. Read more about these metrics in Custom Conversions Cohort Analysis.
For optimizing based on ROAS, you have access to both cohort ROAS and Revenue. Cohort ROAS is a valuable metric as it provides a comprehensive view of the profitability of ad campaigns over time. By analyzing the performance of specific customer groups acquired during particular time periods, you can identify which campaigns and customer segments generate the highest ROAS. This information can be used to optimize ad spend and adjust targeting strategies to improve ROAS.
Cohort revenue is also essential for ROAS-based optimization because it provides insight into the lifetime value of customers. With this information, you can adjust your targeting and messaging to attract customers with a higher lifetime value, which can lead to a higher ROAS in the long run.
How do we calculate the cohort metrics?
Revenue DX — the total revenue received from all conversions with associated monetary values on the X day after install (D0).
ROAS DX — Return on advertising spend on the X day after install (D0):
ROAS DX = Revenue DX/Spend.
In SplitMetrics Acquire, cohorts are groups of users who share a common feature within a selected time frame.
In our cohorts, users are grouped based on the install date, which represents the day when the app is initially opened after being downloaded and installed on their device.
We use a day as a cohort size, meaning all users who opened the app on one day are to be included in one cohort.
We consider the moment of install as "0". So the first day of install is D0 and the following day is D1.
You can use cohorts to trace changes in user behavior from the time of installation up to 360 days. We use a daily granularity, so you can view the following cohorts on the platform: D0, D1, D3, D7, D14, D30, D60, D90, D120, D180, and D360.
We present cumulative values that incorporate the revenue generated on all preceding days. This means that the reported revenue for the 3rd day, for instance, includes the total income earned on the 1st, 2nd, and 3rd day.
Note. Cohorts disregard the time of event in hours and use only the event day. This trend is typically used to evaluate user performance relative to a campaign.
Example:
Users who opened the app on January 1, 2023, make up one cohort. Users who opened the app on January 2, 2023 , make up the second cohort, and so on.
Basic automated rules based on cohort ROAS
Here are two basic rules to check and control if the campaigns' performance is still within your KPI.
Rule 1
💡 Tip. Instead of All Conversions in conditions, it's better to use the necessary custom conversion with associated monetary values, for example, Purchase, Subscription, and so on.
Rule 2
More advanced automated rules
For example, you may want the campaigns to pay off in a month, that is, ROAS D30=100%. At the same time, you don't want to wait 30 days to do the optimization later, as you need to optimize the campaigns every day.
Mapping by cohorts will give you an understanding of what ROAS should be on the 1st or 7th day to get 100% on the 30th day. If you need ROAS D3 = 15% to get 100% on the 30th day, you can set up auto-rules that will check the performance on the 3-rd day. The rules can be as follows:
Rule 1
Check if the performance is still within your KPI: decrease bid by x% if Installs > 0 and ROAS D3 < 15%.
Rule 2
You can also make a double-check for the subsequent cohort period. If you know that after 15% on the 3rd day, ROAS 14 should be 45%, you can make the same rule as you did for the 3rd day, but for the 14th, to eliminate the option when the keyword first converts with the right value and then stops.
For more information or further assistance, reach out to our Support team
or your Customer Success Manager.