What Is an Active User Rate?
- Active user rate compares the proportion of users with the intent to generate revenue against the number of users who actually generate revenue
- Use active user rate as a tool to optimize your in-app economy
- This metric also helps identify blockers to the user’s experience that would prevent them from converting to a paying user
How Do You Calculate an Active User Rate?
To determine your app’s active user rate, you must first choose what you would like to measure. That is, you must define what active users mean to your app. You could use your this KPI rate to measure your user’s engagement with various parts of your app, such as the amount of users going to the store and making a purchase or how many users choose to engage with a user-initiated ad format.
At adjoe, the AUR is measured based on the number of users who open the Playtime ad unit and then generate an install. This method effectively tells you the number of users who are likely to generate revenue compared with the number of users who actually generate the revenue.
While the AUR might vary from company to company, adjoe calculates this KPI as follows.
What Does an Active User Rate Tell You?
Calculating this very KPI helps you understand various aspects of your app’s performance, including the following.
1. How Well a Revenue Stream Is Converting Your Users into a Paying User
Do many users open your in-app store and then make a purchase? What is preventing your number of users from increasing? Developers can run A/B tests with the purchase values to see if they are able to increase the number of paying users by decreasing the cost of the items up for purchase.
While the unit prices drop, developers could notice an uplift in the active user rate. Meaning, overall revenue might then increase. This is because a higher percentage of users will convert into a paying user. This can help app economists optimize the value of their in-app purchase offers for a greater return.
2. If There Is Something Disrupting User Experience
If apps see a sudden drop in your active user rate, this can indicate that there is a problem with the user experience, which prevents them from completing an in-app event that would typically generate revenue.
In many cases, this UX hindrance might be something as simple as latency in the ad experience, a technical error preventing the page from rendering, or perhaps something blocking a revenue event from being received. Regardless of what is preventing the user from bringing in revenue, apps must constantly monitor their AUR to ensure there are no setbacks when it comes to their app’s ability to generate revenue.
3. The Success of Events or Promotions
Publishers can use events or promotions to increase the number of users interacting with their app. For example, those making a purchase or engaging with an ad unit. A popular way to increase your active user rate – and thus revenue – is by running double-reward promotions.
This is a popular strategy for apps that monetize with ads. Many publishers run regular double-reward promotions to increase the number of users opening an app (such as Playtime) and generating an install. During these periods, publishers see an increase in their AUR, which then results in double revenue during the promotional period.
By focusing on increasing the value of the rewards, users become more interested in installing the app. You should exploit any opportunity for more installs by making full use of rewarded ad formats and really publicizing promotions in your in-app store to generate higher revenue.
Your active user rate can refer to various actions within an app. However, its core purpose is to determine how users with revenue-generating intent convert into revenue-generating users.
This can refer to the percentage of users opening an in-app store and making a purchase or those opening Playtime or another type of ad unit then later completing the required action to generate revenue. Apps must continuously monitor this metric to ensure a smooth user experience when interacting with your app’s revenue streams as well as constantly find new strategies to increase the number of users deemed as active.
An active user rate is a way for app developers to understand how their daily active users are interacting with a particular part of their app. In many cases, the active user rate is then used to measure which users are engaging with a revenue stream and then generating revenue.
It depends on what you would like to measure. Adtech companies such as adjoe measure their active user rate based on the number of users who open the Playtime ad unit and then generate an install.
When it comes to optimizing your app’s performance, active user rate plays a crucial role for many reasons. You can investigate disruptions to the user experience, gauge how well a revenue stream is converting a user into a paying user, and see the impact of promotions and events – such as rewarded events – on your app’s performance.