LTV stands for Lifetime Value. A mobile app’s lifetime value (LTV) measures the revenue generated by a single user throughout their lifetime within an app. LTV of an app tells the app developers how well their apps are monetized and helps increase the retention rate. The user’s monetary value is calculated from in-app purchases and in-app advertising, which is determined by ad impressions the user saw throughout their lifetime.
LTV is calculated by the formula
LTV = Average Revenue Per User (ARPU) × 1/ Churn + (Referral Value)
App LTV can be increased through rewarded ads and interactive ads. It is especially important for building long-term loyalty with users who don’t pay and purchase. Rewarded ads are a win-win situation for the users and app developers. High LTV users are an asset to the app and hence reaching these users at the time they are primed to engage with the app can add to an advantage.