Definition
Cohort analysis is a method of studying user behaviour by grouping people according to a shared starting event - usually the date or week they first registered, first deposited, or were acquired from a particular source - and then tracking how each group behaves over the days, weeks and months that follow. Instead of one blended average that mixes new and old users, you see a separate curve for each cohort.
The value is that it separates the effect of when and how users were acquired from the effect of what happened afterwards. A drop in this month's average revenue could mean the product got worse, or simply that a large low-value cohort was acquired recently and is dragging the blended number down.
Cohorts make the difference visible.
In context
In iGaming, cohort analysis is the standard way to judge acquisition quality and product health. An operator groups first-time depositors by acquisition month and source, then tracks cumulative net revenue, retention rate, second-deposit rate and average deposit for each group over 7, 30, 90 and 180 days.
This shows which affiliates and campaigns deliver players who keep playing, not just players who deposit once, and it exposes a good-looking source whose cohorts collapse after week two.
For the analysis to be reliable, cohorts need enough users - a few hundred is a common minimum - and consistent definitions (the same qualifying event, the same time windows) across comparisons. Practitioners use it to set payback expectations (how many months until a cohort's cumulative revenue covers its acquisition cost), to decide which sources to scale or cut, and to detect changes: if the day-30 retention of successive registration cohorts is trending down, something in the funnel, the onboarding or the traffic mix has shifted and needs investigation before it compounds.
Worked example
An operator's blended ARPU looks flat month to month, but cohort analysis shows the June acquisition cohort reached $95 cumulative net revenue per player by day 90 while the September cohort is on track for $60. The difference traces to a new affiliate whose players deposit once and rarely return, and the operator moves that partner to CPA and caps its volume.
Related terms
Frequently asked questions
Browse more iGaming terms in our glossary.
← Back to glossary