So basically, how does one value a Facebook app and what are some acceptable standards of any such metrics used to value an app? For example, I think the following factors make a lot of sense when valuing an app: 1. Stickiness 2. Pageviews 3. Unique Visitors 4. ARPU 5. DAU/MAU What else have I missed? How do I figure out the valuation and decide whether to sell or not? Thank you!
3
Answers
Clarity's top expert on all things startup
First define "successful" and make sure others would see it as the same. If growth is stagnating, that's not what success looks like in an app.
The only way you have a chance at selling it at anything above "fire sale prices" is you can say that you have enough actively engaged users, which is primarily DAU/MAU, then you have a chance of selling the users to someone who wants those users but it's still really tricky.
Happy to talk through it in more detail with you.
Answered almost 11 years ago
Technical consultant and Digital Marketing expert
When its about money, you need to take under consideration only those metrics that are responsible for revenue. These are called KPI (Key Performance Indicators). Following are some of the KPIs that you can consider:
1. New User Referral rate: How many new users does each of your acquired users refer?
2. ARPU (average revenue per user, which can take into account revenue attributed to ads, in app purchases, paid downloads, subscriptions and any other applicable source)
3. LTV (lifetime value of a user/customer, which takes ARPU one step further into considering things like churn rate, referrals and repeat purchases)
4. DAU/MAU (the average number of daily or monthly active app users)
5. CAC (customer acquisition cost - how much you pay to acquire each new customer/user)
6. Churn rate (a measure of how many users stop using your app after a period of time - there are many ways to calculate churn rate, depending on how complex or accurate you want to get)
7. NPS (net promoter score - a ratio of your user advocates:neutral users:detractors. NPS is a difficult KPI to measure that requires actually talking to users rather than just measuring app usage. GrowthBug published a great article on measuring NPS from app users: https://growthbug.com/using-net-promoter-score-to-reduce-your-app-s-churn-and-increase-downloads-316c4c94cac#.m2pysfb5k
8. Free-to-paid conversion rate (users who pay for a service / all users)
Give me a call to discuss further.
Answered over 7 years ago
Marketer. Author. Blogger. Public speaker.
I would say that a good way is to value it by reach and engagement, also I would do some tests on how many of the people that see the link-posts click them.
Number of fans has no value, but engagement and being able to move traffic outside Facebook to your page has great value.
Answered over 9 years ago