ARPPU (Average revenue per paying user)

The revenue a single paying user generates during a specific period. An example of a paid action is subscribing, making in-app purchases, or paying for a download. Using this metric, users who have not paid for anything can be removed from the equation. The calculation formula is total revenue divided by the number of paying users.

What is ARPPU (Average revenue per paying user)?

ARPPU, or average revenue per paying user, measures how much money a user spends on a product or service in the gaming and software industries. It is calculated by dividing the total revenue generated by the number of paying users. This metric can be helpful for businesses because it allows them to understand how much money they are generating per user, and can be used to identify trends and make decisions about pricing and marketing strategies.

How is ARPPU calculated?

To calculate ARPPU, you need to know two things: the total revenue generated by a product or service and the number of paying users. The formula for ARPPU is simple:

ARPPU = Total Revenue / Number of Paying Users

For example, if a game generates $100,000 in revenue and has 1,000 paying users, the ARPPU would be $100. This means that, on average, each paying user spends $100 on the game.

How is ARPPU used in mobile app marketing?

In the mobile app industry, ARPPU is often used as a key performance indicator (KPI) to measure the effectiveness of marketing campaigns and the overall success of an app. By tracking ARPPU over time, app developers and marketers can identify trends and make decisions about how to improve the app’s monetization strategy.

For example, if an app has a high ARPPU, it may indicate that it is popular among a certain demographic or that its pricing strategy is effective. In this case, the app’s developers and marketers may want to focus on targeting the same demographic and maintaining the current pricing strategy. On the other hand, if the ARPPU is low, it may indicate that the app is not appealing to users or that the pricing strategy is ineffective. In this case, the app’s developers and marketers may want to consider making changes to the app’s features or pricing to increase revenue.

Overall, ARPPU is a valuable metric for app developers and marketers because it provides insight into how much money users are spending on an app, and can be used to make data-driven decisions about how to improve the app’s performance and generate more revenue.

How do I improve my ARPPU?

To improve ARPPU, you need to focus on two things: increasing the amount of money that users are spending on your product or service and increasing the number of users who are paying for it. Here are some strategies you can use to do this:

1. Adjust your pricing strategy: Another way to increase the amount of money that users are spending on your product is by adjusting your pricing strategy. For example, you could offer different pricing tiers for your product, with each tier offering a different set of features and benefits. This can make your product more appealing to a wider range of users, and may encourage more users to pay for it.
2. Offer premium features or add-ons: One way to increase the amount of money that users are spending on your product is by offering premium features or add-ons that are only available to paying users. For example, if you have a mobile game, you could offer additional levels or characters that can only be accessed by users who pay for the game.
3. Improve the user experience: A great user experience can be a powerful motivator for users to pay for your product. By making your product easy to use, intuitive, and enjoyable, you can increase the chances that users will want to pay for it.
4. Invest in marketing and advertising: Finally, investing in marketing and advertising can help you reach more users and increase the number of paying users. By promoting your product and highlighting its value, you can attract more users who are willing to pay for it.

Overall, improving ARPPU involves a combination of strategies that focus on increasing the amount of money that users are spending on your product, and increasing the number of users who are paying for it. By implementing the strategies above and tracking your ARPPU over time, you can make data-driven decisions that will help you improve your product’s performance and generate more revenue.