RevenueCat’s in-app ad revenue tracking, now in public beta, lets apps that monetize with both subscriptions and ads — the common pattern for freemium apps offering a paid tier to remove ads — send ad impression and revenue events from AdMob or AppLovin into the same system that already tracks subscriptions. The pitch is a single customer lifetime value number instead of two disconnected dashboards: one showing subscriber revenue, one showing ad revenue, with no shared view of which users are actually worth the most.
The risk is in the blending itself. Ad revenue and subscription revenue are measured on fundamentally different bases — ad revenue is typically an estimate from the ad network (eCPM-derived, often reconciled days later), while subscription revenue is a confirmed transaction. Merge them into one LTV figure without keeping the two streams separately queryable, and you lose the ability to see that a “high-LTV” cohort is actually a handful of heavy ad-viewing free users propping up a number that looks like it came from paying subscribers. That matters directly for acquisition spend: bidding on install cost using a blended LTV that’s secretly ad-revenue-heavy will overpay for users who were never going to subscribe.
Data Points to Track
- Ad revenue and subscription revenue as separate fields on every customer record, even when reporting a combined LTV
- Ad revenue estimate vs. reconciled actual, tracked as a variance, since network-reported eCPM can drift from settled revenue
- Per-cohort revenue mix — the share of blended LTV coming from ads vs. subscriptions — segmented by acquisition source
- Ad-supported-to-paid conversion events, specifically when a heavy ad-viewing free user upgrades to remove ads
- Impression-to-revenue latency from the ad network, so a reporting delay doesn’t get read as a revenue drop
- Placement-level ad revenue alongside subscription events in the same session, to catch ad density that’s suppressing upgrade conversion
Setup Steps
- Send ad revenue events from AdMob or AppLovin into RevenueCat tagged with placement and format, not as a single rolled-up daily total.
- Keep ad and subscription revenue as separate queryable fields in your data warehouse export, even where the dashboard shows them blended.
- Build a variance check between estimated and reconciled ad revenue so a network’s settlement adjustment doesn’t get mistaken for a tracking bug.
- Segment LTV cohorts by acquisition source and revenue mix before using blended LTV to inform bid caps or spend allocation.
- Instrument the ad-density-to-upgrade-conversion relationship directly, since more ad impressions per session can raise short-term ad revenue while suppressing the subscription upgrades that are worth more per user.
Actionable Insights
The number worth tracking isn’t blended LTV on its own — it’s the ratio of ad revenue to subscription revenue within each acquisition cohort. A cohort where that ratio is stable and subscription-weighted is safe to use blended LTV for bidding decisions. A cohort where ad revenue is doing most of the work is a signal that the “growth” is actually a stack of free users who were never going to convert, and bidding on their blended value will misprice every campaign built on that data. Keep the two revenue streams separable at the query level, even after you start reporting them together.
Related Resources
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