Free Mobile Marketing Mobile Analytics and KPIs Questions and Answers — Questions and Answers
Question 1: A mobile app has an Average Revenue Per User (ARPU) of $5 per month. The average user remains a customer for 8 months. The Cost to Acquire a Customer (CAC) is $50. Based on the Lifetime Value (LTV) of a user, what does this data indicate?
- The marketing spend is unsustainable as LTV is less than CAC. (Correct answer)
- The business is highly profitable as LTV is greater than CAC.
- The ARPU needs to be doubled to reach the break-even point.
- The CAC is optimal and should not be changed.
Correct answer: The marketing spend is unsustainable as LTV is less than CAC.
Lifetime Value (LTV) is calculated by multiplying the Average Revenue Per User (ARPU) by the customer lifetime. In this case, LTV = $5/month * 8 months = $40. Since the LTV ($40) is less than the Cost to Acquire a Customer ($50), the company is losing $10 on every new user, which is an unsustainable business model.
Question 2: A mobile marketing analyst calculates the ratio of Daily Active Users (DAU) to Monthly Active Users (MAU). What does this specific KPI, often called the 'stickiness ratio', primarily measure?
- The app's virality and user acquisition growth.
- The frequency with which users return to the app. (Correct answer)
- The total revenue generated per user each month.
- The effectiveness of the app's onboarding process.
Correct answer: The frequency with which users return to the app.
The DAU/MAU ratio, or stickiness ratio, indicates how often users engage with the app within a month. A higher ratio signifies that a larger percentage of monthly users are returning on a daily basis, which points to a more habitual or engaging product.
Question 3: Which of the following best defines the User Churn Rate for a mobile application?
- The percentage of users who install the app but never open it.
- The total number of uninstalls within a given period.
- The rate at which new users are acquired minus the rate of uninstalls.
- The percentage of users who stop using the app within a specific time frame. (Correct answer)
Correct answer: The percentage of users who stop using the app within a specific time frame.
User Churn Rate measures user attrition by calculating the percentage of customers who stop using an app or service during a given period. It is the inverse of the retention rate and is a critical indicator of customer satisfaction and business health.
Question 4: A free-to-play mobile game has 100,000 monthly active users (MAU). In one month, 2,000 of these users made in-app purchases, generating a total revenue of $50,000. Which of the following calculations is correct?
- The Average Revenue Per Paying User (ARPPU) is $0.50.
- The Average Revenue Per User (ARPU) is $25.
- The Average Revenue Per User (ARPU) is $0.50. (Correct answer)
- The Average Revenue Per Paying User (ARPPU) is $50.
Correct answer: The Average Revenue Per User (ARPU) is $0.50.
ARPU (Average Revenue Per User) is the total revenue divided by the total number of users ($50,000 / 100,000 users = $0.50). ARPPU (Average Revenue Per Paying User) is the total revenue divided by the number of paying users ($50,000 / 2,000 paying users = $25). Therefore, the correct statement is that the ARPU is $0.50.
Question 5: In mobile analytics, what is the primary function of an attribution model?
- To assign credit for an install or conversion to specific marketing touchpoints. (Correct answer)
- To predict the future lifetime value of a newly acquired user.
- To segment users based on their in-app behavior and demographics.
- To track the real-time server performance and crash rate of the application.
Correct answer: To assign credit for an install or conversion to specific marketing touchpoints.
Attribution modeling is the process of assigning credit to the various marketing channels and touchpoints that contribute to a conversion, such as an app install or an in-app purchase. This allows marketers to understand which campaigns are most effective and optimize their advertising spend accordingly.
Question 6: A product manager for a new e-commerce mobile app is setting up an analytics framework. To understand the user's journey towards making a purchase, which of the following sequences of tracked events would create the MOST valuable conversion funnel?
- App Open -> Session Length -> App Close
- Product View -> Add to Cart -> Initiate Checkout -> Purchase Completed (Correct answer)
- User Registration -> Profile Completion -> Social Share
- Push Notification Received -> Push Notification Opened -> App Open
Correct answer: Product View -> Add to Cart -> Initiate Checkout -> Purchase Completed
This sequence directly maps to the user's purchase funnel within an e-commerce app. Tracking these specific, ordered events allows the product manager to measure the conversion rate at each step, identify where users are dropping off (e.g., many users add to cart but few initiate checkout), and optimize that part of the user experience. The other options track general engagement but are less specific to the core conversion goal of an e-commerce app.
Free Mobile Marketing Mobile Analytics and KPIs Questions and Answers
A mobile app has an Average Revenue Per User (ARPU) of $5 per month.
The average user remains a customer for 8 months.
The Cost to Acquire a Customer (CAC) is $50.
Based on the Lifetime Value (LTV) of a user, what does this data indicate?