![]() In contrast, a user can easily check their Twitter feed every single day, which is why DAU/MAU can be applied to those sorts of companies. a typical customer would not take a Uber or Lyft every single day throughout the year or book an Airbnb daily. The DAU/MAU metric is not feasible for products where daily usage is not reasonable. However, the DAU/MAU metric is not applicable to all media companies - instead, the ratio is only useful for products where daily use is plausible such as for social media, messaging platforms, and mobile applications like games. In general, the DAU/MAU targeted by most later-stage mature companies is approximately 40%, but the “target” ratio will fluctuate throughout different in the year (and be company-specific). The DAU/MAU ratio typically ranges from 10% to 20% per Sequoia, but certain apps such as WhatsApp can easily surpass 50%. Given those assumptions, the DAU/MAU ratio is 50% - which can be interpreted as the average user engaging with the app every 15 days per month. Moreover, those investors provide capital under the assumption that the startup will become more efficient operationally later on and figure out how to monetize its user base.ĭAU/MAU Ratio = Daily Active Users (DAUs) / Monthly Active Users (MAUs)įor example, suppose a social media company’s DAU is 500,000 while MAU is 1 million. Specific to startups, a high DAU - even if the startup is unprofitable and burning capital at a rapid pace - can raise more capital from venture firms due to the accumulation of monetizable customers. attempt to convert the free users to paid users. Once users are engaged and there is minimal churn, the company now has the option to monetize the user base, i.e. proving a potential “product-market fit.” ![]() Paid Users → Source of Recurring Revenue and Upselling OpportunitiesĮven if the cause behind a company’s high DAU is from offering a free product or having a freemium model, the active engagement suggests there is a valid value proposition and sufficient demand from consumers, i.e.Unpaid Users → More Opportunities to Monetize and Convert to Paid Users.Higher user engagement implies that users derive more value from the product, which creates a cycle of continued usage. In short, higher user engagement indicates greater revenue upside potential, with the opposite true for low user engagement. The DAU metric is categorized as a consumer metric used to track user engagement, which is why media companies (and the market) pay such close attention to the metric. Metrics such as DAU measure the engagement level of customers with a specific product, such as a website, mobile application, or online platform. The term “unique” means that users that engaged with an app over ten times in one day are only counted as a single active user. downloaded and accessed the app), where the user actively participated/used the website or app. Unique users are defined as a visitor to a website or users of an app (i.e. captures the total number of unique users that opened a site or app in the past 24 hours. The Daily Active Users (DAU) metric measures user engagement by counting the unique users or visitors that interacted with an app or site on a particular date.ĭaily Active Users (DAU): User Engagement MetricĭAU captures the total number of unique users on a website or mobile application on a specific date.ĭAU, short for “daily active users”, counts the number of unique users that were active on an app or site on a given day, i.e.
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