What are the most important metrics to track in mobile advertising campaigns?

Some great answers have already been contributed here, so I'll just chime in to say that in the era of algorithmic, "black-box" campaign management (eg. with Facebook's AEO and VO bid strategies and Google's UAC), there's a tendency to ignore CPI altogether and to manage campaigns exclusively to a ROAS target (ROAS is defined in another answer here).

I think that's a mistake. For most campaigns, running VO (or UAC for that matter) without any eye to CPI can make it really hard to hit medium- and longer-term ROAS goals, even when short-term goals are hit via the VO algorithm. Keep in mind that VO campaigns are optimized by Facebook with very short feedback loops providing the optimizing signal: early payments don't necessarily proxy for long-term monetization, and VO campaigns can blow up even when very early-stage ROAS targets are hit just because the CPI got so expensive that it became nearly impossible to recover the install price.

So I'd caution against only looking at ROAS in running value-optimized campaigns; you need to temper the desire to run these campaigns at max budget with only early-stage ROAS as a constraint with the understanding that if CPIs approach the hundreds of dollars, that early-stage monetization will be hard to maintain for long enough to recover the install price. I think "cost-adjusted ROAS" is a better way to think about ROAS for VO campaigns, meaning: a campaign is optimized for ROAS targets within some reasonable cost per install.

The answer will depends on the business goals.

However to scale your mobile ad campaigns, your most important KPI is ROAS* (Return on Ad Spend) which will of course take into account : 

• your business goals and generic objectives but also 
• all pre download specific metrics (CTR, IPM) which will be affected by creatives and targeting capabilities
• post install metrics which depends on the business as well but include generally Dx retention and purchase (IAP, sub) and / or ads. 

In my opinion the answer should be split into two sections; creative metrics and post-install metrics. 

There are many that you should monitor but these are the most important high-level metrics to track.

In terms of creative metrics:

Click-Through-Rate (CTR) - The percentage of clicks over impressions that you get for your creatives. This is important to track how well your individual videos, statics, playables etc. are at peaking interest and getting users to interact and go to your store page.

Store Conversion Rate (CVR) - The percentage of installs over clicks on the store for your app. This lets you know how good your store is in general, but also at matching expectation with the creative that brought them to your store page. For example a flashy video, with high CTR, that captures interest but is nothing like the game, and therefore store page, will probably have a low CVR.

Install Rate (IR) - The percentage of installs over impressions. The most important metric to look at; it allows you to track players from the initial viewing of creative through to the installation. You will find that some creatives have high CTR and low CVR, or low CTR and high CVR, but the IR will give you clearer picture on the overall effectiveness. 

In terms of post-install metrics:

Cost Per Install (CPI) - How much are you paying per install? This is obviously extremely important. As is matching the CPI to the source and understanding how that relationship affects your return. For example a highly targeted value-optimized Facebook campaign will have a much higher CPI than a run of network campaign on Unity, but the quality should be far greater.

Retention - The percentage of users that return to your game. Understanding the relationship between traffic sources and retention can help you plan out and project growth and return. If players stay around they are much more likely to contribute to Advertising or IAP revenue, as well as the Daily Active User (DAU) numbers.

Return on Advertising Spend (ROAS) - The big one; the percentage return on your spend over time. For most mobile advertising campaigns this is right at the top of the list of importance, but it should be noted that all of the above metrics affect your ROAS. Having better IRs drives your CPI down and increases scale, having low CPIs generates more profit and ability to spend, and high Retention means the users you brought in play for longer and could turn into spenders.

Short answer - it depends. :).

Slightly longer answer - it depends on your business level goals. :)

More nuanced answer:

Certainly as mentioned by @ohgosu below, installs, retained users, ROAS etc. are all absolutely important metrics to track. However what metrics matter to your mobile marketing will depend entirely on your business level goals. Perhaps two examples of different scenarios will illustrate this:

SCENARIO A: AGGRESSIVE GROWTH: For one product that I worked on, the priority was to grow as aggressively as possible, as quickly as possible. In this case, our KPIs were revenue(and revenue growth), DAU(and DAU growth) - and we used retention, ROAS & CPI as guardrails to ensure that our DAU & revenue growth were sustainable. Since growth was crucial, we had a relatively low ROAS target(100%) with a 1 year payback period to ensure we maximized our install volumes.

SCENARIO B: CAPITAL-EFFICIENT GROWTH: For another product I worked on, short term profitability and capital efficiency were key goals. In this case, the most important KPIs were ROAS(with more aggressive targets than the product in scenario A) and payback period. Scale was unimportant - and secondary to capital efficiency.

SCENARIO C: LEARNING: Yet another product that I worked on was in soft-launch. In this case, our goal was to test and establish benchmarks for mobile marketing - so the key objective was learning. In this case, the KPIs included CTR, Install Rate, retention & LTV.

I'm sure if you had very different goals from the above(grow virally, for instance; you would have very different KPIs). In summary, you pick your key metrics depending on your goals.

The most important metrics to track in mobile advertising depends fundamentally on your business goals. Assuming your goal is return on ad spend (ROAS), then the following are, in my opinion, the most important metrics to track.

Each of these key metrics can be grouped under either of the following four co-dependent objectives.

1. Generate the most installs at the lowest cost

Ad spend

Ad spend is not a direct measure of performance. However, it is still one of the most important metrics in managing a campaign. Besides being an indicator of growth and a necessary metric for media mix management (Media Mix Modelling), ad spend is necessary to weight performance. A campaign of $100 with a Day 7 ROAS of 30% is not necessarily better than a campaign of $100k with a Day 7 ROAS of 20%. Metrics should always be weighted against their volume.

CTR

The clickthrough rate is one of the metrics marketers can have the most direct impact on. Changes to creatives, targeting, bids or other campaign settings can directly impact CTR. One can't stress enough the importance of testing at the top-of-the-funnel, especially with creatives.

ctr = clicks / impressions

Install rate

The install rate is another top-of-the-funnel metric a marketer can directly impact. Besides ensuring consistency between the ad experience and the store experience, a marketer can leverage all of the App Store and Play Store’s asset customization features, including but not limited to the app name, app icon, preview video, screenshots, description, etc.

install rate = installs / store visits

CPI

The cost per install can be a misleading metric if looked at by itself. A low cost per install may lead to negative ROAS just as a high cost per install may lead to a positive ROAS. It’s best to look at CPI holistically with other metrics like retention, payer rate, cost per payer and ROAS.

cpi = adspend / installs

2. Generate the most retained users

Day 1, Day 7, Day N retention

Retention is the first user-level metric that will give you insight into the health status of a campaign. A low user retention campaign has a lower likelihood of being profitable (as there would be less remaining users to monetize), just as a high user retention campaign has a higher likelihood of being profitable.

Day N retention = Day N active users / installs

where

N = user date - install date
active users = users with a session

3. Generate the most payers at the lowest cost

Day 1, Day 7, Day N payer rate

Day N payer rate = Day N payers / installs

where

N = client date - install date
payers = unique users with a purchase

Day 1, Day 7, Day N cost per payer

Day N cost per payer = adspend / Day N payers

where

n = client date - install date
payers = unique users with a purchase

4. Maximize ROAS

Day 0, Day 7, Day N ROAS

ROAS at Day N is arguably the most important metric for a performance marketer. It's a direct view into the profitability or future profitability of a cohort.

Day N ROAS = ( Day N iap revenue + Day N ad revenue ) / adspend

where

N = client date - install date
iap revenue = in-app purchase revenue
ad revenue = ad revenue