Glossary
Adtech terms simply explained by our in-house experts

What Is an Active User Rate?

Active user rate is a metric that helps app developers and publishers understand how their daily active users interact with a particular – popular – area of their app.

In many cases, this rate is used to measure which users engage with a particular revenue stream or app feature, such as a particular in-app ad unit, and then complete a revenue event, such as installing an app after interacting with a rewarded ad.
Key Takeaways
  • This metric helps app developers understand how their DAUs are interacting with a particular area of their app
  • AUR compares the proportion of users who could generate revenue with the number of users who actually generate revenue
  • The metric helps identify blockers to the user’s experience that might prevent them from converting to a paying user

How Do You Calculate Active User Rate? 

To determine their app’s active user rate, an app developer or publisher must first define what an active user is within the context of their app. 

This metric could, for example, measure user engagement or retention in various areas of an app: 

  • How many users are going to the store and making a purchase? 
  • How many users choose to engage with a rewarded ad format.

Active user rate at adjoe is measured based on the number of users who click on the Playtime ad unit and subsequently generate an install. This method effectively tells app publishers the number of users who are generating revenue compared with the number of users who actually generate the revenue.

While it varies from company to company, adjoe calculates the rate by dividing the total number of installs by the number of users who have clicked the Playtime ad format.

active user rate formula for adjoe’s playtime

What Does Active User Rate Tell You? 

Monitoring this metric helps publishers understand various aspects of an app’s performance, including the following.

1. How Good a Revenue Stream Is at Generating Paying Users

Do many users open the in-app store and then make a purchase? What is preventing an app from converting more users into paying users? 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 might notice an uplift in the active user rate. This means overall revenue might then increase. This is because a higher percentage of users will convert into a paying user. This can help app developers optimize the value of their in-app purchase offers for a greater return.

2. How Much Friction There Is in the App Experience

If apps see a sudden drop in active user rate, this often indicates that there is a UX problem, which prevents them from completing a certain action in the user flow – and from generating revenue.

This UX issue might in many cases be something as simple as latency in the ad experience, a technical error preventing the page from rendering, or something blocking revenue from being generated. 

Apps must constantly monitor their active user rate to ensure there are no setbacks when it comes to their app’s ability to generate revenue.

3. How Successful Events or Promotions Are

Publishers can use events, LiveOps, or promotions to increase the number of users interacting with their app. This could include users, for example, engaging with an ad unit. A popular way to increase active user rate – and therefore revenue – is by running LiveOps, double-reward, or seasonal promotions

This is a popular strategy for apps that use ad monetization. Many publishers run regular double-reward promotions in order to increase the number of users opening Playtime and generating an install. During these periods, publishers see an increase in the active user rate, which then results in double revenue during the promotional period. 

bar graph showing active user rate over a promotional period

Conclusion 

The core purpose of active user rate metric is to determine how many users with revenue-generating intent convert into users that really do generate revenue. 

Apps should continuously monitor this metric to ensure a smooth user experience as well as identify new strategies to increase the number of users deemed as active.

FAQs

What Is an Active User Rate?

This rate is a way for app developers and publishers to understand how their daily active users interact with a particular, popular part of their app. In many cases, this rate is then used to measure which users engage with a revenue stream and then convert into a revenue event.

How Do You Calculate Your Active User Rate?

It depends on what you would like to measure. Adtech companies such as adjoe measure active user rate based on the number of users who click the Playtime ad unit and then generate an install within the same time period.

What Does Active User Rate Tell You?

This metric plays a crucial role in app optimizations for many reasons. Publishers can investigate UX problems, gauge how well a revenue stream is converting a user into a monetized user, and the impact of promotions and events – such as LiveOps – on an app’s performance.

Know the ins and outs of adtech

Visit our blog