Take the average length of time that a user stays with your service.
Find out the average number of purchases they make.
Multiply to get average lifetime value.
Spend less than this number on your customer acquisition, ie Adsense.
Example: The average subscriber stays with you 1 year. It's a monthly service, so the average customer makes 12 purchases. You have a low/no cost service with a gross profit of $2/mo.
12 x $2 Profit per Unit = $24 LTV of the average customer
If you have some sort of viral component where users are getting other users, you'll want to account for that as well.
Find out the average number of purchases they make.
Multiply to get average lifetime value.
Spend less than this number on your customer acquisition, ie Adsense.
Example: The average subscriber stays with you 1 year. It's a monthly service, so the average customer makes 12 purchases. You have a low/no cost service with a gross profit of $2/mo.
12 x $2 Profit per Unit = $24 LTV of the average customer
If you have some sort of viral component where users are getting other users, you'll want to account for that as well.