What is ARPU when it comes to your app? Simply, it is a revenue metric that stands for “average revenue per user”. In an ecosystem that is only becoming more competitive, with more and more apps fighting for revenue each year, healthy ARPU is paramount to success. So, why might app developers overlook this critical revenue metric? In this blog, we’ll break down ARPU, how to calculate it, and how Appnomix is helping apps across all verticals boost their revenue streams.

What is ARPU? Why Might It Be Overlooked?

For mobile apps, there is no shortage of performance metrics to track: customer acquisition cost (CAC), daily active users (DAU), lifetime value (LTV), and session length are just a few. ARPU, however, is one you shouldn’t forget. The metric helps your team determine how much revenue your app generates from each user, on average, over a specific time period (typically monthly). Instead of focusing on how many users your app attracts, ARPU shifts the spotlight to how effectively you’re monetizing your current users.

Part of the reason ARPU may be overlooked is that many developers may focus solely on in-app purchases or subscriptions when analysing their app’s total revenue. For most apps, though, only a fraction of users are willing to pay. In fact, only 5% of app users will make any in-app purchases to begin with. Focusing on ARPU instead can help you capture the true value of your users, whether they’re paying directly, clicking on ads, or engaging with mobile commerce offers from integrations such as Appnomix.

How to Calculate ARPU

The formula for calculating your app’s ARPU rate is simple: Take the total amount of revenue you generated in a specific period and divide that by the total number of users you had in the same period of time. Let’s say your app generated $7200 of revenue from 100,000 users last month. This would give you an ARPU rate of just over $0.07, shown by the graphic below.

Now, what rate should you target? While it depends on which industry your app serves, a traditional benchmark of $0.04 per user is a good start. ARPU can also be calculated quarterly or annually for apps where traffic is more sporadic, such as in the travel or rideshare verticals.

ARPU vs. ARPDAU: How the Two Differ

A common comparison in the world of app revenue is ARPU vs. ARPDAU (average revenue per daily user). It all comes down to how holistic a view you want of your app’s revenue. ARPDAU isolates your app’s revenue to those who interact with the platform daily. Why is this important? It can help you understand how your app’s marketing campaigns and in-app engagement are performing in the short term.

While both metrics are important when focusing on revenue totals, ARPU ultimately gives you a more complete picture, especially if you’re monetizing beyond legacy routes such as advertisements. Only looking at ARPDAU vs. ARPU may lead your app to miss revenue potential from non-paying users who engage with content or offers.

Steps to Boost Your App’s ARPU

Can you raise ARPU without disrupting your app’s user experience? That’s the million-dollar question. Fortunately, there are several strategies you can take to potentially raise your app’s ARPU.

1. Leverage the Power of Mobile Commerce

Nearly 80% of today’s app users say being able to unlock exclusive benefits made them more loyal to their favorite apps. Appnomix helps you do just that. By tapping into our network of 50,000+ eCommerce partners, you can deliver personalized discounts and coupons to users while they shop outside of your app on the mobile web. The more they buy, the more you earn.

2. Segment Your Users

Tailoring your revenue strategies to specific users is another potential strategy for boosting ARPU. The challenge of ad fatigue, for example, is something that app developers are constantly battling. However, with 76% of U.S. adults responding positively to ads that reflect their interests, there is plenty of potential for developers to segment their revenue strategies to their user base.

3. A/B Test Revenue Strategies

Additionally, it may be in your best interest to test when, where, and how you deliver advertisements, in-app purchase opportunities, or mobile commerce integrations to your users. Subtle changes can improve conversion rates without impacting UX.

How Appnomix Helps Apps Drive ARPU

Traditional ad revenue sources for apps are still king, but they can only go so far with added competition for clicks and the rising amount of AI-generated content. So, how can your app generate higher ARPU without disrupting your UX? Enter the Appnomix Commerce SDK. The first-ever non-invasive mobile commerce integration makes it easy for your app to generate new revenue.

When one of the world’s leading decentralized physical infrastructure networks partnered with Appnomix, the company leveraged our integration to achieve significant results. Within the first week of integration, the publisher saw:

• Tens of thousands of user downloads.
• Hundreds of thousands of mobile discount queries processed.
• An immediate boost to ARPU.

Ready to experience game-changing results like these for yourself? Contact our team to start a free demo today.

FAQs

What does ARPU mean in apps?
ARPU helps apps assess how efficiently they’re monetizing each user, generating an average revenue amount per user over a set period of time.

How is ARPU calculated?
ARPU is calculated by dividing total revenue by the number of active users during a specific time period—monthly, quarterly, or annually.

How can ARPU improve monetization?
By tracking ARPU, developers can identify monetization gaps, test strategies like mobile commerce integrations, and increase revenue without the immediate need to grow their user base.