If you have anything to do with mobile apps and advertising, you’ll hear people talking about ARPU and ARPPU as they are two of the most widely used measurements of app revenue.
What is ARPU?
ARPU stands for Average Revenue Per User. To calculate the ARPU of any app, you simply take the total revenue of the app, and divide it by the number of installs.
You can also calculate the ARPU of specific users in the same way. For example, many app publishers will break out the ARPU of an app by country, by day week or month, or by paid and organic installs. ARPU is the quickest and simplest way to see how your app is performing.
Another way ARPU is used is as a way to compare the effectiveness of advertising vendors and campaigns. By comparing the ARPU you can see which advertising networks and vendors are attracting higher quality and paying users. This allows app publishers to shift their advertising budgets to campaigns that drive the best revenues.
What is ARPPU?
ARPPU stands for Average Revenue Per Paying User. Whereas ARPU looks at the average revenue of an app across all installs, ARPPU specifically measures the revenues created by paying users and players.
It was originally designed as a measurement for apps based on a monthly subscription model, but today has become the most common way of measuring the revenues generated by ‘freemium’ games and apps that include in-app purchases.
With so many games and apps now based on the freemium model, ARPPU has become an essential way to understand how the most important users – the ones who spend money – are engaging with an app.
What is ARPDAU?
ARPDAU is similar to ARPU and ARPPU, but measures revenues over a single day. It stands for Average Revenue Per Daily Active User, and shows the app publisher how much revenue is driven by users in a single day that have actively used and engaged with an app.
ARPDAU is useful because an app may have a very large installed base of users, but only a percentage of them will use the app on any given day.
ARPDAU is useful as it can help to show how pricing decisions can affect app monetization on a more granular level.