# Tips on How to Determine a Max Bid

3 Ways to determine an affordable CPI (Cost Per Install):

a) Growth strategy: I want 100K installs in 3 months and my marketing budget is \$300,000 = \$3.00 CPI

b) LTV strategy: I know each new user generates \$9.00 in revenue before churn (LTV) divided by 3 (33% marketing budget)= \$3.00 CPI

c) Tips on Calculating Simple LTV (Life Time Value) to arrive at a CPI Bid
• Last month's revenue (look up in iTunes + Ad Providers + In-app-commerce) divided by...
• Last month's users (look up in Google Analytics, Flurry etc) equals Revenue per user, multiplied by...
• Lifetime (length of time guesstimate) of customer before he churns equals LTV
• LTV divided by 3 (33% marketing budget) = CPI Bid
• Example: (\$20,000 total revenue last month) divided by (10,000 users last month) = (\$2 Revenue per user) multiplied by 4.5 months lifetime = \$9.00 LTV divided by 3 = \$3.00
Determining an affordable CPC (Cost per click):

a) Set a target CPI above (using any of the 3 methods) and divide by 5 = CPC.

Why 5? Assume 20% or 1 out of 5 clicks results in an install.

Example: \$3.00 target CPI divided by 5 = \$0.60 cost per click bid