How to Calculate Your Target Cost per Result for App Campaigns

"Price is what you pay. Value is what you get." - Warren Buffett

Cost per result is one of the most important numbers in your ad account, because it's tied directly to your business. If you don't know what you can afford to pay for a trial or a new user, every decision after that is a guess: when to scale, when to cut, and when to give an ad more time.

Working it out is also a good moment to step back and look at what's working in the business and what isn't. You might be seeing one result on Meta, but when you do your unit economics on the backend with your own numbers (from Superwall, RevenueCat or whatever you use), the picture can look very different.

This piece is for subscription apps. E-commerce works a little differently, so I'll cover that in a separate article.

Start with what a paying user is worth

Start with your AOV (average order value): what a paying user spends on their first payment. You'll find it in RevenueCat, Superwall or your own backend.

Your AOV also tells you how your paying users split between plans. With a $20 monthly and a $40 annual plan, an AOV of $30 means half went annual and half went monthly.

Then take out the app store fee:

• Apple takes 30% by default, or 15% if you're in the App Store Small Business Program (under $1M in proceeds a year). Subscriptions also drop to 15% once a subscriber has been paying for more than a year.
• Google Play takes 15% on subscriptions from day one.

At 15%, a $30 AOV leaves you $25.50 per paying user. That's not your target yet, because you don't pay for paying users. You pay for trials.

Then factor in your conversion rate

Only some of those trials turn into paying users, so multiply by your trial to paid rate. At 30%, that's $25.50 × 30% = $7.65.

That's the break-even cost per trial to aim for in your ad account, whichever platform you're on. Spend more than that and every new user costs you more than they bring in.

The conversion rate is what hurts the most

Here's that same example, live. Prices are fixed at $20 monthly and $40 annual with a 15% store fee. Move your AOV to see how the split between monthly and annual changes, then move the conversion rate to see what you can afford per trial. (Give it a try: drag the sliders and watch what happens to your cost per trial.)

A higher AOV helps, and the easiest way to get one is to push more users onto the annual plan. But look at what happens when you drag the conversion rate down. As it goes down the ladder, your cost per result has to get cheaper and cheaper, fast. At 10% trial to paid, even with a $35 AOV (75% of users on annual), you can only afford about $3 per trial.

It doesn't matter how good your pricing looks on paper. If your conversion rate isn't there, there's only so much you can spend before every new user becomes unaffordable. That's why your trial to paid rate is the first number I'd look at before touching bids or budgets.

Run it with your own numbers

The example above locks the prices and fees. Here you can change everything: your plan prices, your AOV, your store fee and your trial to paid rate. It'll also show you the monthly vs annual split your AOV implies, so you can sanity check it against what you see in your backend.

Final thoughts

Your target cost per result shouldn't come from a benchmark or what another app pays. It comes from three things: what your plans cost, which plans people choose (your AOV), and how many trials actually convert.

Aim for your break-even, but try to land a little below it. That leaves room for refunds, cancellations and the gap between what the ad platform reports and what your backend sees. And if the number comes out uncomfortably low, that's useful too. It usually means the fix is in the product or the paywall, not the ads.