When you’re a marketer, you always need to know how many users are on your platform daily and monthly.
This forms the basis for multiple aspects of understanding marketing like:
Is there a scope to increase sales?
Are there shortcomings in my app?
Am I doing better than my competitors?
Is there another platform I can use to increase sales?
What is my user engagement like?
What are MAUs and DAUs?
Your Daily Active Users (DAU) to Monthly Active Users (MAU) ratio measures the stickiness of your app and/or platform. Daily active users are calculated on a 24-hour basis and monthly on a 30-day basis. Percentages can also measure stickiness. For instance, a ratio of 50% would mean that your users engage with your app, on average, 15 out of 30 days.
How do you calculate MAU and DAU?
DAU::MAU% = DAU / MAU
The concept was popularized by Meta back then on Facebook. Soon after, other consumer apps were often judged by the same KPIs because of the ease of understanding and more straightforward calculations.
How is MAU/DAU influenced?
There are multiple aspects by which your DAU and MAU are influenced.
PR / influencer collaborations
Organic / paid channels
New launches
Advertising campaigns
Network effects
Time of the year / Holiday seasons / Celebratory seasons,
Among others
Most companies’ DAU/MAU ratio ranges from around 10% to 25%. However, these numbers should not be taken at face value since a. As mentioned above, there are multiple factors influencing DAUs, and b. These users don’t reflect retention; they can also be new users landing on the platform. Yet, certain apps can easily surpass 50+%, which generally consist of messaging apps like WhatsApp or industries like news and entertainment.
Of course, the closer to 100% the ratio is, the better the user engagement. Still, realistically that would be unattainable (i.e., it would imply that every user uses the platform every day).
Hence, it’s better to combine DAUs and MAUs with meatier metrics like click-through rates, conversion metrics, impressions, reach, bounce rate, website sessions, CPCs, CAC, response time, etc.
Good MAU/DAU ratios by industry:
DAU can vary greatly depending on your industry, and your target ratio should be company-specific. For apps like Facebook & Instagram, DAU could probably be the most important KPI, but for someone like a healthcare app, you might not depend on DAUs for measuring your growth trajectories. So figuring out the importance of this metric in correspondence with the industry and company you operate in is the foremost thing to do.
For example,
Say you’re a food delivery platform, and most of your users are active on Sundays – your DAU. You can run promotions on Sundays, offering direct discounts or incentives to spend more.
Specifically, in the case of MAUs, when you take a broad look at the month-on-month data, you’ll also be in a position to predict the future growth potential of your company (of course, you need to tie the CLTV with this for the best predictions).
According to a 2017 Mixpanel report, here are some benchmarks for good DAU/MAU metrics.
Conclusion:
DAUs/MAU significantly impact how you view your product and sales.
However, they have a wide range of pros and cons to consider before deciding anything.
The ratio is beneficial in understanding how valuable your product is to your target audience, but also, you can’t assess how many users are retained or churned basis of this number alone.
And lastly, your DAU/MAU metrics might differ from your competitors, but that isn’t a reason alone to change the way you market. Multiple factors influence MAU/DAUs, even in the same industry.
Consider other valuable factors in the long run, and you should be able to decide if your daily and monthly user influence is your crucial metric for making significant decisions. You could always try a few metrics until you settle on the best one for your business, but spending that amount of time, money, and energy on these factors will totally be worth it.
All the best!
