How do you calculate DAU?
To measure DAU, count the total number of unique viewers on a given day. To calculate this, you must know two things: The definition of a user: Most DAU calculations consider a user to be any unique visitor who’s downloaded their app or accessed their site and takes an action. The definition of an action: What constitutes ‘taking an action?’ For each app, it varies. Here are a few common examples:
- Online publication: Visit, login, view a page, save a story
- Mobile gaming app: Create an account, play a game, share with friends
- SaaS application: Add a task, complete a task, invite a team member
- Personal finances app: Add an account, view a report, make a budget
Though DAU may sound simple and straightforward, no two companies calculate it the same way. The slight variations in how they each define actions and users change the results drastically. For example, consider two very different types of companies that measure DAU, a B2B security software and a social media app like Facebook. Are the DAUs of these two organizations equivalent? Hardly. The security software has a high barrier to entry because it must be purchased and likely uses two-factor authentication. Facebook, on the other hand, has almost no barrier. It’s free and famously counts any interaction with Facebook’s messages or widgets anywhere across the internet as an action. The DAUs are incomparable.
Why is DAU such a critical metric?
DAU appears in the news almost daily – often in the context of technology IPOs – because executives, analysts, and investors find that it’s a great proxy for measuring product stickiness and potential for growth. DAU answers the question, “How many people find this app useful enough to use it every day?” The faster that number grows, the more likely it is that revenue will increase. Taken as a stand-alone metric, however, DAU can be a bit deceptive. Just because users take actions doesn’t mean that they’re taking valuable actions. Take a mobile gaming app, for example. If the team rejoiced at skyrocketing DAU but failed to notice that in-app purchases were declining, they could miss the fact that their profitable users were being supplanted (perhaps even being chased out by) unprofitable ones, in which case increasing DAU could be undesirable. To make the most of DAU, measure it in conjunction with indicators of value such as MAU and ADAU, or purchases, content downloads, songs listened to, number of articles read, and shares with friends. To monitor these behaviors, it will help to have a powerful app analytics platform. Want more insights into how to grow your site or app? Learn more about Mixpanel.