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What is Lifetime Value?  

Lifetime Value or LTV is a customer’s life cycle in your business. This term involves the total profit that the customer brings for all the time they are with you. 

Why do I need to measure LTV?

It is important to understand the profitability of all traffic sources in full, because attracting a new customer may cost you more than the profit from the first sale, but if you take into account that the same customer will make purchases on your site monthly throughout the year, then the cost of attracting him will fully pay off.

Let us not describe in detail the formulas for calculating LTV, but will focus on the possibilities of contextual advertising to increase this indicator.

Knowing the customer’s life cycle helps set the direction for improving your marketing strategy. Use contextual advertising tools to increase user loyalty and, accordingly, your profit.

What do we use to increase LTV?

User audiences

You can improve your advertising campaign by personalizing your ads.  Add special offers for your store’s customers. Create audiences of users who made a purchase a week or two months ago and use different calls for them.

Create search-based advertising campaigns (for example, about the sale of individual products), focusing exclusively on users who are already familiar with your site or business.

To improve loyalty rates and increase repeat sales, support your brand online. At a low cost, display banners in the Yandex Advertising Network or the Google display network. We talked about how to do it correctly earlier/link/.

Advertising on YouTube

A top video viewing site is a great platform for displaying advertising messages to your target audience. Your visibility on the web, including on YouTube, will positively affect the increase in LTV. It is much easier to sell to a brand that is always on the radar.

Results

Using the capabilities of contextual advertising, you can significantly increase the repeated requests of customers to your store. At the same time, it should be understood that customer loyalty and the duration of its life cycle depend on many factors related to both the internal organization of the business and the construction of a comprehensive marketing strategy.  To objectively evaluate the effectiveness of your advertising campaigns, use LTV in combination with other metrics.

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