Predicted Lifetime Value (or pLTV) value optimization helps you acquire high-value customers using your own long-term value predictions.
Here is what I’ve learned from Meta’s developer documentation on the feature…
How it Works
Predicted Lifetime Value (pLTV) is built around a single conversion event that helps predict value. So maybe you can predict that the average person who starts a free trial is worth $100. The free trial is then your conversion event, and you have seven days to send the pLTV for a new trial.
You can then optimize delivery toward the people you expect to generate the most value.
Requirements
Meta says that before using pLTV, you should confirm the following:
1. You have an existing web Conversions API integration. I’ve long used the Conversions API Gateway (both through Stape and the one-click CAPI solution).
2. You have a pLTV model that is validated in some way. Meta isn’t clear how that model would be validated, but says it may already be used for optimization, measurement, or budget decisions.
3. Your predictions must include at least five distinct pLTV values. All values must be positive and the highest value should be at least 3x greater than the lowest. So you could pass values of $1, $3, $5, $7, and $10, for example.
4. You have a minimum of 100 conversion events per week attributed to Meta for each of the last four weeks. Meta doesn’t say whether the 100 conversion event minimum is for all conversion events or for the specific events you’d be passing pLTV. My assumption is the latter.
5. Your dataset is not in Core Setup, which is ineligible.
The following events support pLTV value optimization:
- Purchase
- Subscribe
- StartTrial
- CompleteRegistration
- AddPaymentInfo
- Custom events
Should You Optimize for pLTV?
pLTV is definitely not for everyone. Not only do you need volume of events, but the systems and processes for establishing, validating, and passing values. While I may be proven wrong, I assume that this will mostly be useful for higher-priced products with a lead funnel, where you can pass multiple events based on the stage a new lead has reached.
Read Meta’s official documentation for more info.
