What is the Average revenue per daily active user (ARPDAU)?

ARPDAU stands for Average Revenue Per Daily Active User. It is a metric used to measure the average revenue generated per daily active user.

ARPDAU tells you how much revenue you are generating from each daily active user on average. It is calculated by dividing your total revenue over a period of time by the number of daily active users during that same period.

Whereas, Daily active users (DAU) refers to the number of unique users who interact with an app or platform on a daily basis. This includes activities like logging in, browsing content, making purchases, etc.

Why is ARPDAU Important?

ARPDAU is an important metric for several reasons:

1. Understand user value – ARPDAU helps you understand the monetization potential and value of your daily active users. A high ARPDAU indicates your users are highly engaged and spending money. A low ARPDAU may signal your users are not finding enough value to regularly spend money.

2. Benchmark performance – You can benchmark your ARPDAU against competitors or across products/platforms. This allows you to evaluate the success of monetization efforts and identify opportunities for improvement. A rising ARPDAU over time usually indicates improving monetization.

3. Identify growth opportunities – Analyzing ARPDAU by market, platform, user cohort, etc. can uncover market segments where you may have the opportunity to increase revenue. For example, if ARPDAU is much lower among Android than iOS users, you could invest more in Android monetization features.

4. Inform business decisions – ARPDAU provides an objective data point to inform decisions around pricing, platform development, advertising, and more. For example, if launching a new premium feature causes ARPDAU to rise, you know it is generating incremental revenue.

5. Monitor the impact of changes – You can track ARPDAU before and after major changes like launching a new product, changing pricing, running a promotion, etc. This shows directly how product and marketing decisions impact monetization and revenues.

6. Set goals – Establishing ARPDAU goals can align your teams and give a clear target to work towards. Leaders may set goals to achieve a certain ARPDAU threshold or percentage increase over time.

Uses of Average revenue per daily active user

Here are some examples of how companies use ARPDAU as a metric:

A mobile gaming company monitors ARPDAU by game, user cohort, and geography to understand which games and markets offer the most monetization potential. This steers decisions on where to focus development resources.

An on-demand services marketplace tracks ARPDAU over time and against projections. If ARPDAU is lagging, they will dig deeper to understand why and take corrective actions like adjusting commission rates.

A subscription software business analyzes ARPDAU by plan type and user segment. They identify that ASPDAU is significantly lower for students compared to professionals. This leads them to develop student-specific pricing and features.

A sports media publisher keeps a close eye on ARPDAU by website vs. mobile app. They notice a growing monetization gap between platforms, prompting an initiative to improve in-app advertising, subscriptions, and commerce.

An ecommerce retailer monitors ARPDAU by traffic source and campaign. They find email subscribers have a much higher ARPDAU than social visitors. This demonstrates the value of their email program and that they should continue investing in this channel.

A gaming platform calculates ARPDAU separately for pay-to-play vs. free-to-play games. They use this data when deciding which game types and monetization models to focus their internal studio resources on developing.