The wonderful world of mobile game and app monetization is full of fun acronyms, and ARPDAU is one of the most important ones to understand. Short version: it’s a metric to determine how much revenue the average user is bringing in. Simple, right? Well, not quite. Read on to find out more about how understanding ARPDAU helps keep your monetization goals on track.
What does ARPDAU actually mean?
ARPDAU is short for Average Revenue Per Daily Active User. In other words, it’s a measure of how much money every regular user is bringing in on a daily basis. The money earned can be from in-app ads (e.g. rewarded video, offerwall etc.), in-app purchases, subscriptions, or whatever your particular mobile game or application uses as a monetization model.
How do I calculate ARPDAU?
You can find out your ARPDAU, which may change from day to day, by dividing the revenue earned in a 24-hour period by the number of active users in that same period of time. It’s important to note that ARPDAU calculates income from all players, even the ones who don’t make any purchases. (There are metrics that measure revenue from paying customers specifically, but that’s a topic for a different day!)
Why does ARPDAU matter?
ARPDAU is an important metric for app developers for a few reasons. While it’s not the only abbreviation that matters, it is a good way to analyze an app’s income, as well as whether your monetization efforts are working as intended. For example, if you have an influx of new users and the ARPDAU remains steady, it’s a good sign that the newbies are spending or generating income consistently, as intended. If the ARPDAU drops every time a new wave comes in, that means only the same small percentage of users are actually generating money, and it’s time to rethink your strategy.
This is particularly critical for free-to-play apps, which require frequent analysis to ensure that monetization is maximized in an environment where many users won’t be paying a cent. In-app purchases and advertising strategies need to be visible and balanced, and ARPDAU helps get a sense of whether or not you’re achieving that balance.
My ARPDAU is lower than expected. What do I do?
If you’ve analyzed your average revenue per daily user and you’re not quite thrilled with the results, not to worry. There are a few proven ways to engage these users and encourage them to generate revenue, either through ads or purchases.
If you’re not already using reward videos, you really need to start. As reported by Rubicon Project, “rewarded video earns a 79% completion rate,” which is “1.5 times greater than the mobile industry benchmark of 52%.” Post-video click-through rates are higher as well. Plus, reward videos tend to beat ad blockers, and users willingly engage with them, instead of avoiding them.
As for more traditional advertising, it might be time to assess how and where you present ads to users. Are they visible enough or too obscure? Are they too invasive? Are they relevant to your user base? A good mobile advertising partner (like Tapjoy!) can help you with the answers to these questions.
Finally, wherever applicable, nudge non-paying users toward in-app purchases. Make sure your prices are fair, and reward players (through videos or other methods) with a few premium options, just to show them what they’re missing. A free trial or currency sales on certain days also goes a long way towards encouraging users to drop a few bucks to heighten their enjoyment of a product they’re already using.
By now, you should have a firm understanding of ARPDAU and what to do with that information. The concept can be a little intimidating, but a comprehensive grip on your app’s ARPDAU is vital for keeping revenue streams high and users engaged.
To learn more about how Tapjoy can help you increase ARPDAU by using the most effective in-app advertising strategies, get in touch with our talented team of game and app monetization experts.