User Acquisition Cost for Mobile Games: Formula, Strategies & Examples

User Acquisition Cost for mobile games is a critical metric for mobile game developers as user acquisition cost (UAC) directly affects profitability and the success of the game. A lower UAC means that the cost of bringing in new players is minimized which allows for better margins and more resources to be allocated toward improving the game or scaling marketing efforts.

Factors that influence the cost of acquiring users for mobile games are target audience, ad platform and channel used, ad creatives and campaigns, competition within the genre, projected user lifetime value (LTV), conversion rates, brand reputation and marketing strategies.

The most cost-effective user acquisition strategies for mobile games include ASO, influencer marketing, choosing the right channels and target audience, combining paid and organic acquisition, email marketing, referral programs, social media marketing, content marketing, utilizing creative trends, and push notifications.

User acquisition metrics for mobile games to measure cost include customer lifetime value, conversion rate optimization, CAC, click-through rate, cost per acquisition, ROAS, average order value, order frequency, shopping cart abandonment rate, time to conversion, and consumer price index.

This guide breaks down the formula for calculating user acquisition costs in mobile games, offers effective strategies to optimize your budget and provides real-world examples to illustrate best practices.

What is User Acquisition Cost?

User acquisition cost (UAC) is the total expense incurred to acquire a new customer that includes marketing, advertising and promotional costs. The UAC helps businesses evaluate the efficiency of their marketing strategies and determine the profitability of acquiring new users.

User acquisition cost is important for businesses because UAC directly impacts profitability and growth strategies. By understanding UAC companies assess the effectiveness of their marketing campaigns and allocate budgets more efficiently. A low UAC indicates successful customer acquisition strategies and enables businesses to scale while maintaining profitability. High UAC signals the need for adjustments in marketing tactics or target audiences. Monitoring UAC helps companies make informed decisions about product pricing, customer retention efforts and long-term sustainability.

What is the Average User Acquisition Cost for Mobile Games?

The average user acquisition cost (UAC) for mobile games refers to the typical expense incurred by game developers to attract a new player. UAC is calculated by dividing total marketing and advertising expenses by the number of new users acquired.

How to Calculate the User Acquisition Cost for a Mobile Game?

To calculate the user acquisition cost (UAC) for a mobile game, divide total marketing expenses by the number of new users acquired during a specific period. The formula provides insights into the effectiveness of marketing campaigns and budget allocation.

User Acquisition Cost (UAC) = Total Marketing Expenses​ / Number of New Users Acquired

In the formula, total marketing expenses include all costs related to advertising, promotions and any other marketing efforts aimed at acquiring new users such as influencer partnerships or social media campaigns. The number of new users acquired represents the total count of players who installed or registered for the game as a direct result of these marketing activities within a specific timeframe.

Can I Reduce the User Acquisition Cost for Mobile Games?

Yes you can reduce the user acquisition cost (UAC) for mobile games by optimizing your marketing strategies. Focus on targeting specific demographics that are more likely to engage with your game and utilize data analytics to refine your advertising campaigns. Employing cost-effective marketing channels such as social media and influencer partnerships also helps reach your audience more efficiently. Improving the game’s onboarding experience enhances user retention and allows you to maximize the lifetime value of each player.

What Factors Influence the Cost of Acquiring Users for Mobile Games?

The factors that influence the cost of acquiring users for mobile games include target audience, ad platform and channel used, ad creatives and campaigns, competition within the genre, projected user lifetime value (LTV), conversion rates, brand reputation, and marketing strategies.

Let’s discuss each factor that influences the cost of acquiring users for mobile games in detail:

Target Audience

A target audience refers to the specific group of users most likely to engage with a mobile game and is defined by factors such as demographics, interests, behaviors and preferences. The target audience impacts the cost of acquiring users for mobile games because different audiences have varying levels of engagement, spending habits and competition. If the target audience is highly sought after such as gamers with a history of making in-app purchases the cost to acquire them will be higher due to increased competition from other game developers.

Niche audiences are also costly to reach because of their specialized interests and require more customized marketing strategies. A broader audience reduces acquisition costs but the likelihood of finding loyal and high-value users may decrease. Age, location and platform preferences also influence costs because younger or global audiences have different behaviors compared to older or more regional groups. Platforms like iOS and Android differ in user acquisition costs depending on their market share and user engagement levels.

Ad Platform and Channel

An ad platform is a service or tool that allows advertisers to create, manage, and deliver ads and a channel refers to the medium or location where the ads are shown such as social media, search engines or mobile apps. The ad platform and channel used to acquire users for mobile games play a major role in determining acquisition costs. Some platforms like Facebook or Google offer vast reach but may have higher competition and drive up costs especially for popular mobile gaming categories. Niche channels such as gaming-focused platforms like Unity Ads or Chartboost offer lower competition but are still expensive if the target audience is highly engaged.

Different channels also have varying ad formats such as video ads, banners, or playable ads. Each channel impacts user acquisition costs based on engagement levels and effectiveness. Platforms with sophisticated targeting options like TikTok or Instagram allow for more precise audience targeting but come with higher costs due to advanced segmentation. 

Ad Creatives and Campaign Quality

Ad creatives refer to the visual and textual components of an advertisement designed to capture user attention and campaign quality measures the effectiveness of these ads in achieving desired goals such as engagement, conversion, and brand awareness. Ad creatives and campaign quality directly influence the cost of acquiring users for mobile games by affecting engagement and conversion rates. High-quality, visually appealing and engaging ad creatives tend to capture user attention more effectively by leading to better click-through rates (CTR) and lower cost per acquisition (CPA). If an ad resonates with the audience and clearly communicates the game’s value users are more likely to engage which reduce costs by improving the ad’s relevance score on platforms like Facebook or Google Ads.

Competition

Competition refers to the rivalry between businesses, products or individuals within a particular market or industry that strive to attract the same target audience or achieve superior performance. Competition heavily influences the cost of acquiring users for mobile games by driving up advertising costs in crowded markets. When multiple game developers are targeting the same audience, bidding for ad space becomes more expensive and increases the cost per click (CPC) or cost per install (CPI). High competition in popular game genres such as strategy or casual games leads to inflated acquisition costs because many developers are vying for attention from the same pool of users. To stand out developers may need to invest in higher-quality ad creatives or larger budgets and further raise costs. Targeting less competitive niches results in lower acquisition costs due to reduced bidding pressure. 

User Lifetime Value (LTV)

User Lifetime Value (LTV) refers to the total revenue a mobile game or app expects to generate from a user throughout their entire engagement with the mobile game. User Lifetime Value (LTV) plays a critical role in determining the cost of acquiring users for mobile games by influencing how much a developer is willing to spend on acquisition. If users in a particular segment have a high LTV meaning they generate more revenue through in-app purchases, subscriptions or ads over time developers afford to spend more on acquiring them while maintaining profitability. A higher LTV allows for a greater margin between acquisition cost and revenue and makes the investment in user acquisition worthwhile. If a game’s users have a low LTV the acquisition cost must be kept lower to maintain positive ROI. Understanding LTV also helps in optimizing marketing budgets by focusing on high-value users rather than maximizing downloads. 

Conversion Rates

Conversion rates refer to the percentage of users who take a desired action such as installing a mobile game or making an in-app purchase out of the total number of users who were exposed to the advertisement or promotional content. Conversion rates influence the cost of acquiring users for mobile games by determining how efficiently ad spending translates into actual downloads or installs. A higher conversion rate means that more users are taking the desired action (such as downloading the game) after interacting with an ad which reduces the overall cost per acquisition (CPA). When conversion rates are low more money is spent on impressions or clicks without achieving the target number of installs and driving up the acquisition cost. Optimizing conversion rates through better ad creatives, targeted messaging and app store page optimization helps maximize the return on ad spend. Improving the relevance of the ad to the target audience also enhances conversion rates and lowers the cost per install (CPI). 

Brand Reputation

Brand reputation refers to how a company, product or service is perceived by the public and shaped by customer experiences, trustworthiness and value. Brand reputation plays a significant role in influencing the cost of acquiring users for mobile games by affecting trust and user perception. Games with a strong, positive reputation or well-known developer brands tend to attract users more easily and lower acquisition costs since users are more likely to engage with ads or download the game without hesitation. A good reputation also enhances the effectiveness of organic marketing efforts such as word-of-mouth and reviews by reducing reliance on paid advertising. Games or brands with negative reviews or poor reputations face higher acquisition costs because users are more reluctant to engage and require more aggressive or costly advertising strategies. A strong brand reputation leads to higher conversion rates, reduces the cost per acquisition (CPA) and improves return on investment (ROI).

Marketing Strategies

Marketing strategies refer to a company’s comprehensive plan of action aimed at promoting and selling products or services to a target audience and using various channels to achieve specific business goals like increasing brand awareness, customer acquisition and revenue growth. Marketing strategies greatly influence the cost of acquiring users for mobile games by shaping how effectively the game reaches and engages the target audience. A well-optimized marketing strategy that uses a mix of channels such as social media, paid ads, influencer partnerships and content marketing reduces acquisition costs. Strategies focused on precise audience segmentation help lower costs by ensuring ad spend is directed toward users most likely to download and play the game. Poorly targeted or broad marketing campaigns result in wasted budget and higher costs per acquisition (CPA) due to lower engagement rates. Implementing A/B testing within marketing strategies allows for continuous optimization and helps to identify which approaches work best for lowering costs.

What are the Most Cost-Effective User Acquisition Strategies for Mobile Games?

The most cost-effective user acquisition strategies for mobile games include ASO, influencer marketing, choosing the right channels and target audience, combining paid and organic acquisition, email marketing, referral programs, social media marketing, content marketing, utilizing creative trends, and push notifications.

Here are the details of the most cost-effective user acquisition strategies for mobile games

App Store Optimization (ASO)

App Store Optimization (ASO) is the process of improving the visibility, ranking and download rates of a mobile app or game within an app store by optimizing factors like keywords, descriptions, reviews and visuals. App Store Optimization (ASO) works as a cost-effective user acquisition strategy for mobile games by enhancing visibility and improving the likelihood of downloads without relying heavily on paid advertising. By optimizing key elements like the app title, description, keywords and visuals (icons, screenshots and video previews) ASO increases the app’s ranking in search results and helps potential users to discover. Organic visibility reduces the need for expensive ads as users find the game through relevant searches and recommendations. Positive ratings and reviews driven by effective ASO practices build trust and encourage more downloads. Over time ASO helps sustain user acquisition at a lower cost while improving overall app performance and user retention.

Influencer Marketing

Influencer marketing is a strategy where brands collaborate with social media personalities or industry leaders to promote products or services to their followers. Influencer marketing is a cost-effective user acquisition strategy for mobile games because that leverages the established trust and large followings of content creators to promote the game authentically. By partnering with influencers who resonate with the target audience, developers generate organic interest that leads to higher engagement rates compared to traditional ads. Influencers often create gameplay videos, tutorials or live streams that showcase the game’s features in a relatable way and drive their followers to download and try the game. The approach builds credibility and reduces costs associated with broad and untargeted advertising campaigns. The word-of-mouth effect from influencers results in a higher return on investment (ROI) and sustainable user growth at a lower cost.

Choose the Right Channels

Choosing the right channels involves selecting the most effective platforms and mediums for reaching your target audience based on factors such as audience preferences, engagement levels and the nature of your product or service. Choosing the right channels for user acquisition is a cost-effective strategy for mobile games because the right channels ensure that marketing efforts are concentrated where they will yield the highest returns. By analyzing the target audience’s behavior and preferences developers select channels such as social media, search engines, gaming forums or specialized ad networks that are most likely to reach potential players effectively. Utilizing platforms where the target audience spends their time increases the likelihood of engagement and conversion and minimizes wasted ad spend. Leveraging organic channels like influencer partnerships, community engagement and app store optimization reduces reliance on paid advertising further lowering acquisition costs. 

Identify Your Target Audience

A target audience is a specific group of consumers identified as the intended recipients of a marketing message or campaign and is characterized by shared demographics, interests, behaviors and needs that align with a product or service. Identifying the target audience is a crucial cost-effective user acquisition strategy for mobile games as identification ensures that marketing efforts are precisely aligned with the preferences and behaviors of potential players. By conducting thorough market research and analyzing demographic data developers pinpoint specific audience segments that are most likely to engage with and enjoy the game. The targeted approach allows for more effective ad placements and messaging by minimizing wasted ad spending on users who may not be interested. When marketing campaigns are tailored to resonate with the identified audience they tend to yield higher engagement and conversion rates that further reduce the cost per acquisition (CPA). 

Combine Paid and Organic Acquisition

Combining paid and organic acquisition strategies involves integrating both approaches to maximize user reach and engagement by leveraging paid advertising to generate immediate visibility while building organic growth through content marketing. Combining paid and organic acquisition strategies is a cost-effective approach for mobile games because that leverages the strengths of both methods to maximize user reach and engagement. Paid acquisition such as targeted ads on social media or search engines allows developers to quickly drive traffic and visibility to their game by attracting users who may not have discovered the game organically. Organic strategies like App Store Optimization (ASO), influencer marketing and community engagement build long-term brand credibility and lower acquisition costs over time.

Email Marketing

Email marketing is a digital marketing strategy that involves sending targeted messages or promotions to a group of subscribers via email. Email marketing serves as a cost-effective user acquisition strategy for mobile games by allowing developers to directly engage with potential and existing players through personalized and targeted communication. By building an email list through sign-ups on the game’s landing page or within the app developers share valuable content such as game updates, exclusive promotions or invitations to participate in beta testing that encourages users to download or return to the game. The direct line of communication fosters a sense of community and keeps the game top-of-mind for users which leads to higher conversion rates at a lower cost compared to traditional advertising methods. Email marketing is highly segmented and enables developers to tailor messages based on user preferences and behavior that enhance relevance and engagement. 

Referral Programs

Referral programs are marketing strategies that incentivize existing customers to refer new users to a product or service and offer rewards or discounts to both the referrer and the new customer. Referral programs function as a cost-effective user acquisition strategy for mobile games by incentivizing existing players to promote the game to their friends and family and effectively leverage word-of-mouth marketing. By offering rewards such as in-game currency, exclusive items or access to special features for successful referrals developers encourage players to share the game with their social circles. The approach motivates users to spread the word and helps acquire new players who are more likely to trust recommendations from friends rather than traditional advertisements. Referral programs reduce user acquisition costs (CAC) since the marketing expense is linked directly to the rewards given to existing players rather than high upfront advertising costs. 

Social Media Marketing

Social media marketing is a strategy that involves using social media platforms to promote products or services, engage with customers and build brand awareness. Social media marketing is a cost-effective user acquisition strategy for mobile games as the strategy leverages popular platforms like Facebook, Instagram, TikTok and Twitter to reach a broad audience while facilitating direct engagement with potential players. By creating engaging content such as game trailers, behind-the-scenes footage and user-generated content developers capture the attention of users who may not be actively searching for new games. Social media also allows for targeted advertising and enables developers to specify demographics and interests that increase the chance of reaching users most likely to download the game. Social media platforms provide analytics tools to measure engagement and conversion rates that allow developers to optimize their campaigns effectively. 

Content Marketing

Content marketing is a strategy focused on creating and sharing valuable, relevant and consistent content to attract and engage a target audience. Content marketing serves as a cost-effective user acquisition strategy for mobile games by creating valuable and engaging content that attracts and retains potential players over time. By producing a variety of content types such as blog posts, videos, tutorials and infographics developers provide insights, tips and entertainment related to their game. The approach enhances brand awareness and establishes the game as a trusted source of information within the game’s niche. Effective content marketing also improves search engine visibility, drives organic traffic to the game’s website or app store listing and reduces reliance on costly paid advertising. Shareable content encourages social sharing that further amplifies reach without additional costs. 

Utilize Emerging Trends

Emerging trends refer to the evolving styles, techniques and themes in various fields that reflect current societal values, technological advancements and cultural shifts. Utilizing emerging trends as a cost-effective user acquisition strategy for mobile games involves tapping into current cultural phenomena, popular challenges and emerging styles to engage potential players effectively. By aligning marketing campaigns with trending topics or formats such as viral challenges on TikTok or memes on social media developers capture the attention of users who are already interested in the trends and increase the likelihood of engagement and downloads. The approach makes the marketing content more relatable and shareable and enhances visibility as the content resonates with what users are currently discussing and sharing. Leveraging creative trends allows developers to create unique promotional content that stands out in a crowded market without incurring costs associated with traditional advertising. 

Push Notification

A push notification is a brief and alert-style message sent directly to a user’s device from an app or website and prompts them to take specific actions without the need to open the app. Push notifications function as a cost-effective user acquisition strategy for mobile games by enabling developers to re-engage existing players and attract new ones through timely and relevant messages delivered directly to their devices. The push notifications inform users about in-game events, special promotions, new content updates or reminders to return to the game encourage user activity and reduce churn rates. By segmenting their audience based on behavior and preferences developers tailor notifications to specific groups that enhance the relevance and effectiveness of the communication. 

Which Advertising Channels Offer the Best Cost Per Acquisition (CPA) for Mobile Games?

The advertising channels that offer the best cost per acquisition (CPA) for mobile games include social media advertising (Facebook and TikTok), Google Ads, in-app advertising networks (Unity Ads and Ironsource), video advertising platforms like YouTube, influencer marketing and affiliate marketing.

The details of advertising channels that offer the best cost per acquisition (CPA) for mobile games is given below:

Social Media Advertising

Social media advertising is a digital marketing strategy that uses social media platforms to promote products or services through targeted ads to reach specific audiences. Social media advertising offers the best cost per acquisition (CPA) for mobile games by providing highly targeted ad placements that reach specific demographics, interests and behaviors relevant to potential players. Platforms like Facebook, Instagram and TikTok allow developers to create detailed audience segments based on user data, ensuring that ads are shown to individuals most likely to engage with and download the game. The high level of precision maximizes ad effectiveness and minimizes wasted spend on audiences less likely to convert. Social media ads include engaging formats such as videos, carousels, and interactive content that capture user attention and encourage clicks, further enhancing conversion rates. 

Here are the details of the social media advertising channels offering the best cost per acquisition (CPA) for Mobile Games:

• Facebook: Facebook offers robust audience targeting options that allow mobile game advertisers to reach a highly relevant user base with effective cost-per-acquisition (CPA). Facebook’s vast user base and sophisticated ad algorithms ensure that campaigns are optimized for better conversion rates. Facebook’s detailed performance analytics provide valuable insights to continuously refine user acquisition strategies.
• Instagram: Instagram as a visually-driven platform works well for mobile games with appealing graphics and gameplay visuals. The CPA is favorable when ads are integrated into Stories or Feeds and leverage Instagram’s engaged user base. Instagram’s targeting features that overlap with Facebook help to attract users with specific interests.
• TikTok: TikTok’s short-form video format and viral content nature allow mobile game ads to gain traction quickly and lead to lower CPAs for user acquisition. With the young and active audience mobile game ads benefit from engaging and creative video ads that resonate with TikTok’s community. The platform’s ad tools that include in-feed ads and challenges help reach a broad audience and drive game installs at competitive acquisition costs.

Google Ads

Google Ads is an online advertising platform that allows businesses to create and display ads on Google’s search engine results pages and across the network of websites that target specific keywords and demographics to reach potential customers. Google Ads offers the best cost per acquisition (CPA) for mobile games by leveraging the game’s extensive reach and sophisticated targeting capabilities to connect developers with users actively searching for gaming content. The platform allows advertisers to use keyword-based targeting and ensure that ads appear to users who are already interested in similar games or related topics anc increases the likelihood of conversion. Google Ads provides various ad formats that include search ads, display ads and video ads that enable developers to choose the most effective way to engage their target audience. The advanced analytics and tracking tools available on Google Ads facilitate real-time performance monitoring and allow developers to optimize their campaigns based on user behavior and conversion data. 

In-App Advertising Networks

In-app advertising networks are platforms that connect advertisers with app developers and enable ads to be displayed within mobile apps to reach targeted audiences.

In-app advertising networks offer some of the best Cost Per Acquisition (CPA) for mobile games by directly targeting users who are already engaged with similar apps and ensure higher relevance and conversion potential. The networks allow advertisers to place ads within mobile apps in the form of banners, videos or interactive ads that reach users in an environment where they are more likely to engage. The precise targeting options provided by in-app networks such as demographic filters and behavioral tracking help reduce wasted ad spend and improve conversion rates and lead to a lower CPA.

Here are the details of the in-app advertising networks offering the best cost per acquisition (CPA) for Mobile Games:

• Unity Ads: Unity Ads offers one of the most competitive CPAs for mobile games especially with the ads’ focus on video ads integrated seamlessly into gameplay. Unity Ads provides high-quality users who are more likely to engage with similar game content. The network’s robust ad formats that include rewarded video ads boost user retention while keeping acquisition costs low.
• AdMob: Google’s AdMob provides a broad reach with the access to Google’s vast ad network and is a strong option for mobile game developers targeting global audiences. The network’s ability to offer high-quality traffic and efficient targeting leads to competitive CPA rates. AdMob’s machine learning technology optimizes ad performance and helps developers acquire new users cost-effectively.
• IronSource: IronSource stands out for the diverse ad formats such as rewarded video ads and offer walls that result in lower CPAs and higher user engagement. The platform specializes in app monetization and is an ideal choice for mobile games looking to maximize both user acquisition and in-app purchases. IronSource’s deep integration into gaming ecosystems ensures efficient user acquisition while minimizing costs.

Video Advertising Platforms

Video advertising platforms are online services that enable businesses to create, distribute and analyze video ads across various channels like social media, websites and streaming services.

Video advertising platforms offer the best cost per acquisition (CPA) for mobile games by delivering dynamic and engaging content that effectively captures the attention of potential players. Platforms such as YouTube, TikTok and other video networks allow developers to create visually appealing ads that showcase gameplay, features and user experiences in a way that static ads cannot. The immersive format increases user engagement and leads to higher conversion rates as viewers are more likely to download the game after watching an exciting gameplay trailer or tutorial. The video advertising platforms utilize advanced targeting options that enable advertisers to reach specific demographics based on interests and behaviors to optimize ad spend and minimize wasted impressions. 

Here is the detail of the video advertising platform offering the best cost per acquisition (CPA) for Mobile Games:

• YouTube: YouTube offers one of the most competitive CPAs for mobile games by leveraging the app’s vast user base and highly targeted ad capabilities. With video ads displayed before or during relevant content YouTube ensures high visibility and user engagement. YouTube’s advanced targeting features and extensive reach help mobile game developers acquire users at a lower cost while delivering highly engaging ads to the right audience.

Influencer Marketing

Influencer marketing is a strategy that involves partnering with individuals who have a significant following on social media or other platforms to promote products or services. Influencer marketing offers the best cost per acquisition (CPA) for mobile games by leveraging the trusted relationships that influencers have built with their followers that result in higher engagement and conversion rates compared to traditional advertising methods. By partnering with influencers who align with the game’s target audience, developers create authentic and relatable content that resonates with potential players and make them more likely to download the game. Influencers produce gameplay videos, reviews or tutorials that showcase the game in a genuine context that enhances credibility and interest among their audience. The targeted approach helps minimize wasted ad spend by ensuring that promotional efforts reach users who are already interested in similar content.

Affiliate Marketing

Affiliate marketing is a performance-based marketing strategy where businesses reward affiliates for driving traffic or sales to their products through the affiliates’ promotional efforts. Affiliate marketing offers the best cost per acquisition (CPA) for mobile games by creating a performance-based model where affiliates earn commissions for driving new users to the game. The approach minimizes upfront costs for developers as they only pay for actual conversions rather than for ad placements and makes the strategy a budget-friendly option for user acquisition. Affiliates who may include bloggers, content creators or social media influencers leverage their established audiences to promote the game by using engaging content such as reviews, gameplay videos and tutorials that resonate with potential players. The targeted promotion enhances credibility and encourages downloads as users are more likely to trust recommendations from familiar sources. 

What are the User Acquisition Metrics for Mobile Games to Measure Cost?

The user acquisition metrics for mobile games to measure cost include customer lifetime value, conversion rate optimization, CAC, click-through rate, cost per acquisition, ROAS, average order value, order frequency, shopping cart abandonment rate, time to conversion, and consumer price index.

Here are the details of the user acquisition metrics for mobile games to measure cost:

Customer Lifetime Value

Customer lifetime value is a metric that estimates the total revenue a business expects from a single customer throughout their entire relationship and helps companies assess the long-term value of acquiring and retaining customers. The formula to calculate CLV typically involves three key components: average purchase value, average purchase frequency and average customer lifespan. The average purchase value is calculated by dividing total revenue by the number of purchases over a specific period. The average purchase frequency is determined by dividing the total number of purchases by the number of unique customers during that same timeframe. The basic formula is: 

CLV=(Average Purchase Value × Average Purchase Frequency per Year) × Average Customer Lifespan(in years)

Conversion Rate Optimization

Conversion rate optimization (CRO) is the process of enhancing a website or landing page to increase the percentage of visitors who take a desired action, such as making a purchase or signing up for a newsletter. In the formula, “Number of Conversions” refers to the total number of desired actions taken by visitors such as making a purchase, signing up for a newsletter or filling out a contact form. “Total Visitors” is the overall number of individuals who visited the page or site within a specific timeframe. The formula to calculate the conversion rate is expressed as: 

Conversion Rate = (Number of Conversions​ / Total Visitors) × 100

Churn Rate

Churn rate is the percentage of customers or subscribers who stop using a company’s product or service within a given time period that indicates customer retention and satisfaction levels. In the formula of churn rate, “Number of Lost Customers” refers to the total count of customers who have canceled their subscriptions or stopped using the service during the defined time frame. “Total Customers at the Start of the Period” is the number of customers at the beginning of that same period. The formula to calculate churn rate is: 

Churn Rate = (Number of Lost Customers​ / Total Customers at the Start of the Period ) × 100

Customer Acquisition Cost

Customer acquisition cost (CAC) is the total expense incurred by a business to acquire a new customer that includes marketing, sales and related costs divided by the number of new customers gained during a specific period. In the formula, “Total Marketing and Sales Expenses” encompasses all costs incurred during a specific period for acquiring new customers that including advertising, salaries, software and any other relevant expenses. “Number of New Customers Acquired” refers to the total count of customers gained during that same timeframe.  The formula to calculate CAC is:

CAC = Total Marketing and Sales Expenses​ / Number of New Customers Acquired 

Click-Through Rate

Click-through rate (CTR) is the percentage of users who click on a specific link or advertisement out of the total number of users who view the content and serves as a measure of the effectiveness of online advertising or email campaigns. In the formula, “Number of Clicks” represents the total instances where users clicked on an ad or link while “Number of Impressions” refers to how many times the ad or link was displayed to users. The formula to calculate CTR is: 

CTR=(Number of Clicks / Number of Impressions​) × 100

Cost Per Acquisition

Cost per acquisition (CPA) is a marketing metric that measures the total cost incurred to acquire a new customer or lead and is calculated by dividing the total advertising spend by the number of conversions achieved during a specific period. In the formula, “Total Cost of Marketing Campaigns” includes all expenses related to advertising, promotions and any other marketing activities aimed at attracting new customers within a specific timeframe. “Number of Acquisitions” refers to the total count of new customers or leads gained as a result of the campaigns. The formula to calculate CPA is:

CPA = Total Cost of Marketing Campaigns / Number of Acquisitions​

Return on Ad Spend

Return on ad spend (ROAS) is a marketing performance metric that measures the revenue generated for every dollar spent on advertising that helps businesses evaluate the effectiveness and profitability of their ad campaigns. In the formula, “Revenue from Ads” represents the total income generated directly from the advertising efforts and “Cost of Ads” refers to the total amount spent on those advertising campaigns. The formula to calculate ROAS is:

ROAS = Revenue from Ads​ / Cost of Ads 

Average Order Value

Average order value (AOV) is a metric that calculates the average amount spent by customers per transaction, provides insights into purchasing behavior and helps businesses optimize pricing and marketing strategies. In the formula, “Total Revenue” represents the total income generated from sales over a specific period and “Number of Orders” refers to the total count of individual transactions during that same timeframe. The formula to calculate AOV is:

AOV = Total Revenue​ / Number of Orders

Order Frequency

Order frequency is the metric that measures how often a customer makes purchases within a specific time frame which indicates customer loyalty and engagement with a brand. In the formula, “Total Number of Orders” represents the cumulative count of all purchases made during a designated time frame and “Total Number of Unique Customers” refers to the distinct individuals who have made purchases within that same period. The formula to calculate Order Frequency is:

Order Frequency = Total Number of Orders​ / Total Number of Unique Customers 

Shopping Cart Abandonment Rate

The shopping cart abandonment rate is the percentage of online shoppers who add items to their shopping cart but leave the site without completing the purchase to highlight potential barriers in the checkout process. In the formula, “Total Carts Created” refers to the total number of shopping carts initiated by customers during a specific period and “Total Completed Purchases” indicates the number of transactions finalized within that same timeframe. The formula to calculate the rate is:

Shopping Cart Abandonment Rate = [(Total Carts Created − Total Completed Purchases​) / Total Carts Created] × 100

Time to Conversion

Time to conversion is the duration it takes for a potential customer to complete a desired action such as making a purchase or signing up for a service after initially engaging with a marketing campaign or website. In the formula, “Total Time Taken to Convert” refers to the cumulative time (often measured in days or hours) from the initial interaction to the final conversion for all users during a specified period and “Number of Conversions” indicates the total count of successful conversions achieved in that timeframe.  The formula to calculate Time to Conversion is:

Time to Conversion = Total Time Taken to Convert​ / Number of Conversions 

Consumer Price Index

The Consumer Price Index (CPI) is an economic indicator that measures the average change over time in the prices paid by consumers for a basket of goods and services and reflects inflation and cost of living trends. In the formula, “Cost of Basket in Current Year” refers to the total cost of a predefined set of goods and services in the year being measured and “Cost of Basket in Base Year” represents the total cost of the same set of goods and services in a designated base year. The formula to calculate CPI is:

CPI = (Cost of Basket in Current Year / Cost of Basket in Base Year ​) × 100

What are the Benefits of Reducing User Acquisition Costs for Mobile Games?

The benefits of reducing user acquisition costs for mobile games increase profit margins, scale marketing efforts, improve ROI, outpace competitors, reallocate resources to growth areas, maximize customer lifetime value (CLV), allow flexible pricing models, enhance financial health, and attract investment.

Let’s discuss each benefit of reducing user acquisition costs for mobile games:

Increases Profit Margins

Profit margin is a financial metric that calculates the percentage of revenue that exceeds the costs of goods sold, indicating the profitability of a company. Reducing user acquisition cost (UAC) significantly enhances profit margins by lowering the expenses associated with attracting new customers. When businesses manage to decrease UAC through effective marketing strategies, optimized ad campaigns or improved targeting they spend less money to gain each customer. As a result, the revenue generated from each new user becomes a larger portion of the profit by directly boosting profit margins. For instance, if a company initially spends $10 to acquire a customer who generates $50 in revenue then the profit margin is $40. However, if they reduce UAC to $5 while still earning the same revenue then the profit margin increases to $45.

Scales Marketing Efforts

Marketing efforts refer to the strategies and activities undertaken by a business to promote the products or services, engage with the target audience, and drive sales and brand awareness. Reducing user acquisition cost (UAC) enables businesses to scale their marketing efforts more effectively by freeing up resources that are reinvested into additional marketing initiatives and channels. When the cost to acquire each customer decreases, companies allocate their budgets towards expanding their reach, testing new marketing strategies or enhancing existing campaigns without the risk of overspending. For example, if a business successfully lowers its UAC, the company may increase the ad spend on social media, explore influencer partnerships or invest in content marketing all of which can lead to greater visibility and customer engagement. The scalability allows for a more aggressive market presence and the potential to tap into new customer segments.

Improves ROI on Marketing Campaigns

ROI on marketing campaigns measures the return on investment generated from marketing efforts by comparing the revenue earned to the costs incurred to help businesses evaluate the effectiveness and profitability of their marketing strategies. Reducing user acquisition cost (UAC) significantly improves the return on investment (ROI) on marketing campaigns by allowing businesses to generate higher profits from their marketing expenditures. When UAC is lowered the cost associated with acquiring each new customer diminishes meaning the revenue generated from those customers has a more favorable impact on overall profitability. For instance, if a company spends less on acquiring customers while still achieving the same or higher sales the resulting increase in profit margins translates directly into improved ROI.

Outpaces Competitors

Competitors are businesses or organizations that offer similar products or services in the same market and vie for the same customer base to gain a competitive advantage over each other. Reducing user acquisition cost (UAC) allows businesses to outpace competitors by enabling them to allocate their resources more strategically and effectively. When a company successfully lowers its UAC that business gains a significant advantage in terms of profitability and flexibility and allows for more aggressive marketing strategies that capture market share. For instance, with reduced acquisition costs a business invests in higher-quality advertising, expands into new channels or offers more competitive pricing and promotions all of which attract customers away from competitors. A lower UAC leads to improved return on investment and allows for sustained growth and the ability to scale operations without sacrificing margins. 

Reallocates Resources

Resources are assets or inputs, including human, financial, physical and information that individuals or organizations use to produce goods and services to achieve objectives or create value. Reducing user acquisition cost (UAC) enables businesses to reallocate resources more efficiently and leads to enhanced operational effectiveness and strategic growth. When companies lower UAC they free up budgetary funds that are otherwise spent on acquiring customers and allow for the savings to be redirected toward other critical areas such as product development, customer service or innovative marketing campaigns. For example, with a lower UAC, a business might choose to invest more in user experience improvements, develop new features or enhance customer retention strategies.

Maximizes Customer Lifetime Value (CLV)

Maximizing Customer Lifetime Value (CLV) involves implementing strategies to enhance customer retention, increase average order value and improve customer experience. Reducing user acquisition cost (UAC) maximizes customer lifetime value (CLV) by enabling businesses to retain more profit from each customer over their engagement with the brand. When the cost to acquire customers decreases the initial investment in attracting them is lower and allows a larger portion of the revenue generated from the customers to contribute to overall profitability. The financial advantage is reinvested into customer retention strategies such as loyalty programs, personalized marketing or enhanced customer support. As customers remain engaged for longer and spend more over their lifetime the effective CLV increases significantly. 

Allows Flexibility in Pricing Models

Flexibility in pricing models refers to the ability of a business to adapt the pricing strategies based on market conditions, customer demand, competition and other factors that allow for dynamic adjustments to optimize sales and profitability. Reducing user acquisition cost (UAC) provides businesses with greater flexibility in pricing models and allows them to adapt their strategies to meet market demands and enhance competitiveness. When companies achieve lower UAC they afford to experiment with various pricing strategies such as promotional discounts, tiered pricing or freemium models without jeopardizing their profitability. The flexibility enables businesses to attract a broader range of customers by appealing to different market segments and accommodating varying consumer budgets. For instance, they might implement introductory offers to entice new users knowing that their reduced acquisition costs allow for lower margins on initial sales.

Enhances Financial Health

Financial health refers to the state of an individual’s or organization’s financial situation, assessed by factors such as income, expenses, savings, investments and debt levels to indicate their ability to manage finances effectively and meet obligations. Reducing user acquisition cost (UAC) significantly enhances a business’s financial health by improving profitability and cash flow. When UAC is minimized the amount spent to acquire each new customer decreases and allows for a greater percentage of revenue generated from sales to contribute to the bottom line. The increased profitability enables companies to reinvest in essential areas such as product development, marketing and customer service to foster growth and innovation. Lower UAC means that businesses achieve a quicker return on investment that positively impacts cash flow and provides the flexibility to respond to market changes or unexpected challenges. 

Attracts Investment

Investment is the allocation of resources, usually money into assets or ventures with the expectation of generating a return or profit over time. Reducing user acquisition cost (UAC) attracts investment by demonstrating a company’s efficiency and potential for sustainable growth. Investors are keen on businesses that acquire customers at a lower cost while maintaining or increasing profitability as lower cost indicates a well-optimized marketing strategy and effective resource allocation. A company’s lower UAC showcases the company’s ability to generate higher returns on marketing investments that signal to investors that the business is poised for expansion and has a competitive edge in the industry. The financial prudence enhances the company’s valuation and builds investor confidence in the management team and strategic vision.

What is the Impact of Game Genre on User Acquisition Cost?

Game genre impacts user acquisition cost by varying player demand and competition levels. Casual games have lower costs due to broad appeal and RPG games tend to have higher costs due to niche targeting and increased competition for high-value players.

How does User Retention Impact the Overall Acquisition Costs of Mobile Games?

User retention impacts the overall acquisition costs of mobile games by reducing the need for constant new user acquisition. High retention rates increase lifetime value, allow businesses to spread acquisition costs over longer periods, boost profitability and lower customer acquisition costs.

How do Mobile Game User Acquisition Costs Compare to Other Industries?

Mobile game user acquisition costs are higher than in many other industries due to the intense competition for attention in a crowded market and the need for targeted marketing strategies to attract and retain players. Industries like e-commerce or SaaS spend significant amounts on user acquisition. The cost per install (CPI) for mobile games often surpasses those in other sectors and is even higher for certain genres or markets. The discrepancy arises from the unique nature of mobile gaming where user engagement is heavily influenced by advertising effectiveness, in-game monetization strategies and the high churn rates associated with casual games.

What are the Expected Trends in User Acquisition Costs for Mobile Games in 2024?

The user acquisition costs for mobile games in 2024 are expected to rise due to increased competition and advertising costs. Developers may focus more on organic growth, and enhanced targeting to engage content to optimize spending and improve user retention strategies.

How can I Predict Future User Acquisition Costs for my Mobile Game?

To predict future user acquisition costs for your mobile game, analyze historical CPI and CAC trends, monitor competitor performance and account for market dynamics. Use predictive analytics tools and adjust for seasonality to make more accurate and data-driven cost forecasts.

What Benchmarks Should I Consider for User Acquisition Costs in Different Countries or Regions?

The benchmarks you should consider for user acquisition costs in different countries or regions are regional market characteristics, competition levels and consumer behavior. Benchmarks should reflect variations in advertising costs, cultural preferences and payment methods that help to tailor strategies.

What is the Cost of Retaining a User Versus Acquiring a New One in Mobile Gaming?

The main difference between retaining a user and acquiring a new one in mobile gaming lies in the associated costs and long-term value each strategy brings. The cost of acquiring a new user requires sufficient investment in marketing, advertising and promotions and depends on the target audience and competition. The cost of retaining a user incurs lower costs and focuses on engagement strategies like in-game rewards, updates and personalized experiences.

What is the Average Cost Per Install (CPI) for Different Game Genres?

Cost Per Install (CPI) is the average cost incurred to acquire a new user through app downloads. CPI is important for user acquisition cost analysis as CPI helps developers understand the efficiency of their marketing strategies. A lower CPI indicates a more cost-effective acquisition process and allows for better budget allocation and higher return on investment (ROI). For different game genres average CPI varies significantly. Between April 2023 and March 2024, the global average cost per install (CPI) for casual gaming apps was 2.17 U.S. dollars. Tracking CPI across genres enables developers to benchmark their performance and adjust their marketing strategies accordingly to maximize user growth and profitability according to statista.

What is the Difference Between Cost Per Install (CPI) and Customer Acquisition Cost (CAC)?

The main difference between cost per install and customer acquisition cost is that CPI measures the cost to acquire a user through app downloads and CAC includes all costs associated with acquiring a customer. But average CPI varies by game genre.