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What are Key Performance Indicators and Why are they important?

Updated: Mar 13, 2023

Key Performance Indicators (KPIs) are the critical (key) quantifiable indicators of progress toward an intended result. KPIs provide a focus for strategic and operational improvement, create an analytical basis for decision making and help focus attention on what matters most.

Managing with the use of KPIs includes setting targets (the desired level of performance) and tracking progress against those targets.

Managing with KPIs often means working to improve performance using leading indicators, which are precursors of future success, that will later drive desired impacts indicated with lagging measures.

1. Cost per thousand impressions (CPM)

CPM refers to paid advertising modules based on impressions. It determines the purchase cost for each platform and the other costs also derive from CPM. CPM is ideal to heighten your brand awareness and deliver specific messages to the users.

2. Cost per click (CPC)

Every conversion begins with a click. By measuring the amount of clicks on your ads, you can throughout the month to pause ads that are not performing well and increase the visibility of ads that received more clicks. CPC allows you to track performance and make sure that people click on the visual.

3. Click through rates (CTR)

This ratio indicates how often people who see your ad end up clicking it. It is counted by the number of clicks that your ad receives divided by the number of times your ad was shown. Closely related to CPC, it shows how performative your visual is. It’s the click rate on the ads that matters, so that’s what our Team is looking at in the first place.

A note from our Team: when CTR is low, it can mean that your ad is not efficient enough. But sometimes it’s better to have a low CTR but a strong CVR (after) than to have a higher CTR but nobody converts it to an install.

4. Cost per install (CPI)

CPI is a pricing model with which advertisers pay when a user installs their app through their ad. CPI really depends on your app, on the sources you run and on the competition of the sector. It is an indicator of how much it costs to recruit 1 person who downloads the app. CPI allows us to measure the starting price and it is also a very good and cheap indicator between countries/projects.

5. Conversion Rate (CVR)

CVR stands for the number of people who downloaded the app based on the number of people who clicked on your ad. This rate is linked to the CPI and if the rate is too low it signifies a problem on your store page (not explicit enough) or on your visual (not in coherence with your app).

6. Cost per lead (CPL)/Cost per action (CPA)

CPA allows to charge an advertiser for a specific action made by a user (views, leads or sales). It gives control for advertisers on their profitability and the return on investment of their campaigns. It also provides insights on tracking and maximizing the return of investment across different marketing channels.

With Cost per Lead you can calculate how much you have spent on acquiring each customer. It helps to identify the channels that have brought the biggest number of costumers. CPL basically signifies a person, who completed a desired action and the money, which were spent to motivate that user to complete that action.

Each advertiser defines the CPA/CPL according to its objectives. The retailers will use CPA for the purchase, the banking apps will try to generate the inscription with your credit card details, the betting apps will ask for a first deposit, VTC will try to make a first ride etc.. it’s very variable according to the industry.

7. Customer Lifetime Value (LTV)

LTV allows you to calculate the lifetime income of a user and therefore it allows you to better set your goals. Longer a customer continues supporting the company – the greater his lifetime value becomes.

8. Retention Rate

Retention rate plays a significant role in understanding how well your app is performing over time, taking into account each unique user. It provides the percentage of users who are still using an app a certain number of days (or month) after install. Calculated by the number of users that use an app at least one per day divided by total installs.

Retention rate can pinpoint on how to improve the performance of your app and extend the Customer Lifetime Value.

It should not be neglected, especially in the calculation of profitability because, if a user often returns to the app and makes several purchases, then it generates more profitability for the advertiser.

Are you looking to elevate UA for your game?

Using a self-serve dashboard to handle your campaign is an easy and beneficial solution to elevate your UA, as they are user-friendly and put you in full control of your budget and provide extensive targeting options.

The Gamelight advertising platform is one of the leading mobile marketing platforms with an easy-to-use self-serve dashboard. Working on a CPI basis, the Gamelight advertising platform delivers direct traffic from a self-published mobile game recommendation platform. Plus it only takes 5 minutes to set up your account and launch your first campaign!

Click HERE to check the self-serve dashboard of the Gamelight advertising platform.

If you need help, fill in THIS FORM and one of our team members will get back to you within 24 hours.

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