What’s the best way to approach the K-factor
K factor is just an organic uplift of users created by user acquisition activities. Paid UA brings users and those paid users bring more organic users. In theory. In order to give detailed description, I am going to borrow this definition of K-factor from Ironsource
“K Factor is a metric for app developers that reveals your app’s virality, by measuring how many additional users each of your existing users brings along to the app.
The term K Factor actually comes from the world of medicine, where it’s used as a metric to measure how quickly a virus spreads.”
K-Factor evaluation also by Ironsource:
“Find a country where you have almost zero daily organic downloads. Then buy a certain amount of users – let’s say in this case you buy 10,000 users. If you see that after a specific period of time you suddenly have 12,000 users, you know that 2000 of them came as an indirect result of your paid user acquisition campaign.”
That means that if all your UA sources brought 10 users and you see 15 in the store (within a specific time period) your K factor is 1.5
For each user you paid for, you got 0.5 users “for free”.
Problems with K-factor
There are Three problems I see here.
- The evaluation process stated above doesn’t consider the fact that the moment you switch off the UA campaign, the number of users you get goes down to zero, so even if you had 10k users, you won’t “suddenly” jump to 12k. Thanks to attribution windows described in this article we will talk about why it’s not really zero, but what I am trying to say here is that the moment you turn off the tap, water stops flowing. What you would have to see in the chart would be continous flow of additional users over time, starting with low amount of numbers, continously increasing and after some time stabilizing at certain levels.
- In case you are just opening the new geo, you can no be 100% sure to tell if those 5 users would not install even if there was no UA.
- Again, nothing is free. Especially in advertising. Even if K-factor was real, you would pay for each users that you would get, because you would not get those users without UA in the first place. That means that if you get 10k users for $1 CPI, and in total you would acquire 12k, your CPI would obviously just decrease.
Now, K-factor can be both right and wrong to track. If you are spending $100k a day and you are doing iniciatives to get more people organically install the app, it makes sense to look at K-factor as one of the high lvl metrics of UA effect. In case you’re struggling to spend $2k a day on a game through all the channels, K-factor just doesn’t make sense to look at. The volume of the installs from UA will be just too low in that case.
Ways to increase the K-factor
Despite the fact that we can’t evaluate the K-factor from paid UA with 100% accuracy, we can boost and evaluate some specific iniciatives that increase it directly. We are going to skip iniciatives like “Make sure your app is great” or ” Target the right audience” for obvious reasons… Some of the relevant iniciatives for increasing K-factor might be improving sharing feature of the app (incentivized or non-incentivized sharing). Make sure the process of sharing the app is completely straight forward and seamless and users can navigate the sharing buttons easily.
Another iniciative are referral codes. Baiscally rewarding players for making other people to install the game. It’s possible to tell exactly how many users came from referral codes or other links, as long as they came to the game through link. Even here, it gets tricky as some portion of users might click on the link, get to the store and then leave. Or just get the invite from another users and install the game later on their own.
In the end, it of course will depend on what your goals are with the UA and what are your options. Even without calculating K-factor It’s still a good idea to incentivize users to share your game, talk about it on forums, invite more users to play and build the community around it. That’s how you truly can boost your UA efforts and create a growth loop.