ARPDAU

Mobile app companies and game developers are constantly seeking newer ways to comprehend their revenue metrics at a smaller level. A key performance indicator (KPI) that gives you a good overall snapshot of daily monetization is ARPDAU (Average Revenue Per Daily Active User), a crucial metric for evaluating how well your app or game is making money from your DAU (Daily Active Users). In this post, we will look at what ARPDAU is, how to measure it, why it’s important, and how it can help fine-tune your monetization strategy and boost user retention.

What Is ARPDAU?

ARPDAU is a metric that helps you understand how much revenue, on average, is generated from each of your daily active users. DAU is the number of unique users interacting with your app or game at least once daily. ARPDAU is calculated by taking the total daily revenue and dividing it by the total number of daily active users, which gives you a snapshot of how much your app or game is earning each day.

In more general terms, it also lets you get a sense of the health of your monetization strategies on a micro-level, that is, a day-by-day basis. It shows you how well your app conversions are doing and whether your in-app purchases or subscriptions are clicking with your target market. It provides you with the framework to spot trends in user behavior or anomalies. Because many apps monetize through ads, in-app purchases, or subscriptions, ARPDAU is a critical metric to see how much each monetization channel makes on average each app day.

How to Calculate ARPDAU

The ARPDAU formula looks like this:

Here’s the breakdown of these calculations:

1. Total Revenue in a Day: Your daily income from your app or game. If you make money from in-app purchases, advertising, or subscriptions, count each of these in your daily income.

2. Daily Active Users: The number of users who interact with your app on a certain day. It's crucial to track DAU correctly (through analytics tools or an in-house solution) so the ARPDAU figure retains its confidence-giving reliability.

For instance, if your app generated $2,000 yesterday and you had 10,000 daily active users during the same period, then your ARPDAU would be:

So, each user was worth 20 cents of revenue. This simple but powerful metric offers a quick glimpse at how efficiently you are monetizing your app daily.

Why ARPDAU Matters

There are several reasons why ARPDAU is such an important KPI. It lets you drill down into your day-to-day revenue performance without getting tangled in other extensive (and sometimes more volatile) metrics like monthly active users or lifetime value (LTV). Because it’s a daily drill-down, ARPDAU enables near-immediate course corrections if you see sudden changes in earnings or user behavior.

Here are a few more specific reasons why ARPDAU is particularly important, broken down by key points.

Measures Daily Monetization Efficiency

The main strength of ARPDAU is its razor-sharp lens on daily monetization. And this granularity is a sink-or-swim matter for apps or games that depend on short purchase cycles — for example, daily in-app purchases or ad impressions. Adding a new item or feature to your in-app store will allow ARPDAU to show you the immediate revenue effect, and you will be able to catch the changes in user behavior within 24 hours.

Unaffected by User Base Size Fluctuations

ARPDAU is less affected by the large swings in your total user base, as it considers daily active users versus monthly or weekly active users. Even when your user acquisition strategy is successful and generates new downloads, it is still the single metric to analyze how much every new active user will bring separately. If, however, some users churn, then this measurement can show whether daily active users are still driving a healthy flow of revenue.

Early Warning for Churn Impact

A decline in ARPDAU can be an early indicator that something may be causing users to cease spending money or even stop playing your game. For instance, an unpopular update could result in fewer in-app purchases, ultimately decreasing your ARPDAU. By monitoring this metric regularly, you will catch any issues early and be able to reduce your churn before it’s too late and you’ve let it get out of control.

ARPDAU vs. ARPPU

While ARPDAU and ARPPU (Average Revenue Per Paying User) are closely related, they serve different analytical purposes when looking at how well your app is doing:

• ARPPU comes into play only when discussing paying (or revenue-generating) app users. It measures the amount of money you make from paid users over a specific period, whether daily, weekly, or monthly.
• ARPDAU, in contrast, divides total daily revenue by all active users, including those who did not make a purchase. This includes users who don't pay.

If you’re seeking insights into how efficiently you turn active users into paying users, ARPPU can be enlightening. But if you’re after the general picture of how much revenue comes in from the average active user on any given day, whether they’re paying or not, ARPDAU is the pushier metric. You can use them in parallel, using ARPPU to follow your monetization strategy for paying users and ARPDAU to get a complete impression of the overall daily income brought by your users.

Using ARPDAU for Analysis

ARPDAU isn’t just a way to understand how much revenue you’re making per daily active user — it also helps you identify trends, see patterns, and make informed decisions about new features, marketing campaigns, or monetization strategy. Here are a few ways to use this metric for more in-depth analysis.

Tracking Trends Over Time

A great use of ARPDAU is to watch it from day to day, week to week, and month to month. That means you can immediately spot whether there’s any massive difference in daily revenue when you’re first setting a new feature free, redesigning, and so on. However, if it goes up shortly after you roll out a new batch of in-app purchases, your users react well to your change. On the other hand, if you ship new features but fail to achieve a boost in ARPDAU, you should consider if they are answering a need from your users, and how much of your user base is paying attention to in-app promotions.

Gauging Impact of Updates or Monetization Changes

When you adjust a subscription plan, add a new type of ad placement, or A/B test your app’s UI for higher conversions, ARPDAU can act as your real-time barometer of success. Instead of waiting for a weekly or monthly report, you have near-instant feedback on whether your monetization changes are working or falling flat with users. This is particularly noteworthy in a competitive market where rapid iteration and adjustment to user behavior can make the difference between a profitable app and one that’s not.

How to Boost ARPDAU

Raising ARPDAU (Average Revenue Per Daily Active User) involves a balance of maximising existing revenue streams and new monetisation experiments. Here are a few tips, especially for mobile apps, to help boost daily monetization.

Increase In-App Purchase Uptake

• Offer limited-time deals: Nothing motivates users to buy like a ticking clock. Lightning deals, available for a few hours, or sometimes just a day or two, can spur on-the-spot spending.
• Tiered pricing and bundles: Offering two or more purchase choices or bundled buys can promote higher value sales.
• Personalized offers: Utilize analytics to customize in-app purchase suggestions based on user behavior or preferences.

Concentrating on in-app purchase optimization also leverages a direct revenue stream that can increase your ARPDAU quickly, especially if users approach the app daily.

Optimize Ad Placements

• Less intrusive advertisements: Keep your advertisements concealed. You don’t want them to hamper user experience, which could lead to a higher churn rate.
• Rewarded ads: Allowing “rewarded ads,” or ads that users can watch to get lives, currency, or bonuses inside your app, is a great way to get additional ad revenue without upsetting users.
• Frequency caps: Restricting frequency allows you to minimize spamming and keep retention rates healthier.

Ad revenue can account for a significant portion of ARPDAU for apps with a highly active daily user base. Nonetheless, optimizing the user experience in the presence of ads is fundamentally important to avoid hurting user retention.

Run Events to Boost Daily Spend

• Regular content updates: Retain your players with daily or weekly promos or events that prompt them to spend on new content.
• Seasonal-related promotions: Create campaigns for special events or based on holidays.
• Competitive or cooperative events: Use leaderboard competitions or team-oriented challenges that drive app purchases to stay competitive.

You boost your ARPDAU by creating frequent, convincing reasons for users to return — and spend — every day.

ARPDAU in Games

For mobile game makers, ARPDAU is significant because of constant fluctuations in in-game economies. In many games, the primary means of making money are micro-transactions, virtual currency, or premium seats/boxes at the in-game arena. In this ecosystem, users generally engage very frequently, and ARPDAU is an essential metric for monitoring how new features or promotions affect spending behavior.

• Post feature releases: After you release new characters, levels, or weapons, ARPDAU can tell if these additions temporarily boost in-app purchases or establish a steady state where in-app purchases level off as users do the bulk of purchasing at their own pace over time.
• During promotion: The ARPDAU values increase under the effect of a limited-time sale, special item, or event sale, which can bring a noticeable profit boost for the day.
• User segment tracking: In-game analytics can additionally segment ARPDAU according to user groups, allowing marketers to target high-value users, such as “whales” who spend more frequently and in greater amounts.

Since gaming apps are frequently affected by spikes and dips caused by updates, seasonal events, and marketing promotions, ARPDAU is a real-time barometer of whether monetization is a win or loss.

Final Thoughts

ARPDAU is a realistic measurement of how well you monetize a daily active user, providing immediate visibility into how well (or not!) you’re doing at in-app purchases, subscriptions, the push and pull of your advertising set-ups, and other monetization vectors.