If you’re looking to monetize your mobile app, it’s important to know how to calculate ARPDAU. This metric will help you determine how much revenue you can generate from each active user daily. Keep reading to learn how to calculate ARPDAU for your mobile app!
I remember when I first started my mobile app development journey, I had no idea how to monetize my apps and make money from them. It wasn’t until I learned about the importance of metrics like ARPDAU that I was able to start generating revenue from my apps. Calculating this metric is essential if you want to ensure that your app is profitable.
How To Calculate ARPDAU
There are a few different ways to calculate ARPDAU. The most common way is to take the total number of paying users for a specific period and divide it by the number of average daily active users (DAU) for that same period.
What is the Difference Between ARPU, ARPPU, and ARPDAU?
If you work in mobile advertising and apps, then you’ve probably heard a lot about ARPU and ARPPU. These two metrics are by far the most commonly used measurements for mobile app monetization.
While ARPPU focuses on the revenue generated by paying customers, it is not the only metric that measures a user’s contribution to revenue.
ARPU looks at the average revenue of an app across all installations.
Originally, the ARPU metric was designed to measure the revenue generated from subscription-based mobile apps. Today, it’s commonly used to measure revenue from freemium apps and games that include in-app purchase options.
ARPU includes all users who have used the app while ARPDAU focuses only on those individuals who actively engage with the app every day.
ARPU is used to measure the overall effectiveness of a monetization strategy. ARPPU and ARPDAU, however, are more immediately telling of pricing and user reactions.
While revenue from paying customers can be high, the conversion rate for paid customers is extremely low, with as few as 2% of users who make in-app purchases.
Monetizing your apps through advertising is becoming increasingly important for app developers. By supplementing the revenue of paid users with ad revenue, you can more effectively monetize your app.
Metrics such as the average revenue and users from ads can be important in that they account for advertising revenue.
What is ARPDAU?
The Average Revenue Per Daily Active User (ARPDAU) is the average amount of money that each user generates for your app. This key performance indicator (KPI) is crucial for measuring and improving your mobile app’s profitability.
This is one of the most important metrics to keep track of daily as it will tell you exactly how much money each of your active accounts is bringing in. This is different than ARPA (Average Revenue Per Account) and shouldn’t be confused with that.
Understanding your ARPDAU is key to understanding which of your users is the most valuable to your company. By looking at this figure, you can determine which users you should focus on and which you should let go of.
Top Metrics for Your App
Depending on your app’s business model and your end goals, you should have certain KPIs in place. These metrics detail how the app is doing.
When measuring your KPIs, the ARPDAU is an important metric to watch.
When looking at your data, the most important metric to pay close attention to is retention. This tells you the percentage of users who are still using your product.
The churn rate is another important number to keep an eye on, as it tells you how quickly people are abandoning your application.
There are a few important app performance metrics you should pay attention to. These include things like MAU, CPA, CPI, LTV, ARPPU, and ROI. These will tell you how well your mobile app is doing and where you can make adjustments.
Why is ARPDAU important?
ARPDAU is an important metric to track because it can give you insights into the effectiveness of your monetization strategies. By monitoring ARPDAU, you can quickly identify any issues that may be causing a drop in revenue. Additionally, tracking ARPDAU over time can help you see if your monetization efforts are resulting in sustained growth.
Ultimately, when you understand the data that is coming from ARPDAU, you will be able to make better-informed decisions for your business in order to grow.
If you don’t know how much revenue your daily active users are generating, you won’t be able to understand how to further grow and monetize your business.
The ARPDAU is a helpful way to analyze your app’s results. This can be used to align your earnings with a top-level view of your income.
How To Calculate ARPDAU?
Segmenting your new customers by acquisition channel is a great way to see where your customers are coming from.
You can measure your ARPDAU by seeing which games, networks, or apps are performing the best and worst in your app.
ARPDAU is a great way to see how well your app is doing, including:
- When your app is being downloaded
- How users engage with your content
- How users respond to in-app ads
- How much money you are making from each user
To calculate the ARPDAU, take your daily income, and divide it by the number of users you had that day.
ARPDAU = Daily income ÷ Daily active users
How to Increase ARPDAU
The only way to figure out what isn’t working is by testing. Iterating is a part of building apps, and there are a variety of methods you can use to iterate on your app.
How To Calculate ARPDAU: In-App Bidding Solution
Using a traditional waterfall to manually optimize ad networks is quickly becoming obsolete. In app-bidding automates the process of filling the network with the most money in an automated auction.
By automating its advertising, the mobile gaming company Hyper Hippo was able to improve its workflow and increase its revenue.
They saved time by automating their communication process with other departments and by getting rid of their manual workflow.
Strategic Ad Placement
If you’re looking to monetize your app through ads, it’s important to do so in a way that won’t negatively impact the user experience. Placing ads in strategic, unobtrusive locations will ensure that users are more likely to engage with them without feeling frustrated.
When is the best time to show an ad? You don’t want to interrupt people in the middle of something, like playing a game or working on an important project.
You should place your banner ads in between other tasks so that users are more likely to see your ad. Additionally, you should limit the number of times a user views an ad during the same browsing session.
A/B Testing Your Ads
Placing ads in optimal locations can help ensure they reach the right audience. Try A/B testing your ads to determine when or where to place them for the best results.
Insert these between levels or breaks in gameplay.
PocketGems, a San Francisco-based game company saw an increase of 60% in ad ARPPU after improving the user experience of their ads.
They made sure to balance the number of advertisements shown to players while making sure they were placed in a way that would engage them.
Segmenting your users by unique attributes will help you better understand their average revenue per user. This can help you adjust appropriately.
Reward Video Ads
Interactive ads can increase revenues by 20% to 40%. They do this by engaging the user on a deeper level than static banner ads can.
People know that they will be rewarded in some way, such as more in-game currency or extra lives in Candy Crush.
How To Calculate ARPDAU Encourage Non-Paying Users to Make In-App Purchases
Show rewarded videos to users who have never made a purchase. This will give them a glimpse of what they could get if they make an actual purchase, and how doing so can immediately improve the status of their account.
How ARPDAU Impacts Your Monetization Strategy
As you continue building out your app and your user base, keep your eye on your average revenue per daily active user (ARPDAU).
ARPDAU can be used to assess the effectiveness of in-app purchases, advertising, and other monetization strategies. By tracking ARPDAU over time, you can identify trends and optimize your app to maximize revenue.
Conclusion: How To Calculate ARPDAU
If you’re looking to monetize your mobile app, it’s important to know how to calculate ARPDAU. This metric will help you determine how much revenue you can generate from each active user daily. Keep reading to learn more about calculating ARPDAU for your mobile app!