Daily Active Users

Article byPrakhar Gajendrakar
Edited byRashmi Kulkarni
Reviewed byDheeraj Vaidya, CFA, FRM

What Is Daily Active Users (DAU)?

Daily Active Users (DAU) is a digital metric used by social media platforms, e-commerce websites, and other online portals to gauge the total number of users who visit and engage with the product, service, or platform every day. It is an important metric that highlights the number of people interacting with online businesses or platforms in a single day.

Daily Active Users

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Nearly all businesses with an online presence use the daily active user metric. However, many business analysts and management aces criticize it, stating it is a vague indicator of a platform’s online presence, growth, and performance. Many businesses prefer monitoring the average daily active users to get a more reliable value. In addition, firms are also interested in tracking Weekly Active Users (WAU) and Monthly Active Users (MAU).

Key Takeaways

  • Daily Active Users is closely related to the concept of active users, which refers to individuals who engage or interact with a product or service within a given timeframe.
  • It is commonly used by mobile applications, businesses, and companies offering products and services via online platforms and portals.
  • This parameter helps gauge growth and performance and enables companies to derive other KPIs for comparison and analysis.
  • There is no universally acceptable or defined good or bad number for the DAU. However, the higher this number goes, the better, and vice versa.

Daily Active Users Explained

Daily active users is a metric that defines the number of people who visit a website, log in to a mobile application, or access a social media platform in a 24-hour window. Today, many businesses have an online presence, which they use to execute extensive digital marketing plans and accelerate growth.

In such a scenario, it becomes important to track the number of people who visit a business’s online store for products, services, or entertainment. The DAU count is a direct metric of how many people interact with a business daily. It outlines the level of engagement and popularity of digital products, services, and entertainment avenues.

The daily active users definition states that it accounts for all the people who open a mobile application or browse a certain website to engage with the content in various forms, such as posts, likes, and views, among other forms of engagement. It includes people who visit the website or application, along with those who spend time and those who purchase a product or subscribe to a service.

The social media DAU is a common metric used by various social media platforms to understand the length of time people spend on their portal. It helps them evaluate the popularity of their products or services. Typically, companies use this data to revise marketing and promotion strategies, study user behavior, and develop other operations-related plans to build more revenue streams.

With DAU, businesses or platforms can study the existing business conditions as well as predict future growth and performance of their business models. Companies can make important business decisions based on whether they believe that their DAU can be improved. For instance, if specific measures, policies, or features are expected to improve DAU, companies usually implement them after careful analysis.

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How To Calculate?

DAU can be calculated by tracking the number of unique users who actively engage with an online platform, application, or website on a given day. For this, tracking and analyzing user activity data, such as logins, page views, or specific actions performed online, are considered. Identifying unique users and those returning from time to time is a crucial task in the context of this computation.

Daily active users formula = Total unique new users + Total unique returning users

Examples

Below are two examples of daily active users.

Example #1

Suppose Jennifer launches a streaming platform for fitness videos and designs a mobile application for people to log in and watch the videos she uploads. After three weeks, she calculates the DAU count using the formula

DAU = Total unique new users + Total unique returning users.

There were only 36 total unique new users and 54 unique returning users.

So, DAU = 36 + 54 = 90

Jennifer realizes that the daily active user count is only 90, which means only 90 people are visiting the platform and engaging with the content she posts. Since the count remains constant, it indicates that the total number of unique users and the total number of unique return users are both constant.

After monitoring the DAU for over 45 days, she decides that she must upload more content from different genres on the platform. The trick works for Jennifer, and her platform’s DAU starts increasing and reaches 4500 in a week.

Jennifer’s MAU count comes to be nearly 4500 x 30 = 1,35,000 monthly active users. In this way, she uses the DAU metric to improve the effectiveness of her video streaming platform.

Example #2

In Vox Media’s Code 2023 event interview, X’s CEO Linda Yaccarino said that the microblogging platform has been losing its daily active users since Elon Musk acquired the company (erstwhile Twitter) in 2022. In 2022, Elon Musk announced that X had 254.5 million daily active users the week before he acquired it.

She said X currently has 225 million daily active users—an 11.6% reduction in the number of users compared to the numbers seen before the acquisition. A report published by The Information revealed that X announced a revised DAU count of 254 million after the event.

X’s CEO avoided answering pointed questions about the company’s DAU figures and said that around 50,000 communities were active on the platform. She also said that engagement numbers have seen a rise since June 2023. This indicates that DAU is a crucial metric for companies with an online presence.

How To Increase?

There are many ways to increase the DAU. However, not every method works for every platform, application, or website. Some simple methods to increase the number of daily active users on a website or mobile application are:

  • Identifying the target audience and concentrating on them gradually increases the number of users on a website or mobile application.
  • Optimizing the product, UI, and services based on customer reviews demonstrates to people that their opinions are being given due consideration. This boosts engagement.
  • Push notifications help increase DAU. Sending notifications from time to time reminding users to come back to the application or resume using the services is an effective way to increase engagement.
  • Continuous innovation and trend-following are essential strategies for expanding a platform’s target market. By adapting to evolving user needs and preferences, businesses remain relevant, attracting a wider audience.
  • Modifying product or service pricing and membership plans helps increase engagement.
  • Businesses that focus on improving their services, fixing problems, resolving bugs, and reducing loading time typically succeed in increasing their DAU.
  • Organizing events, hosting contests and live challenges, and introducing rewards help increase the DAU.

Importance

The importance of daily active users has been explained below.

  • The DAU is an important metric that measures the total number of active users in 24 hours, giving a nuanced view of whether a company’s strategies are working.
  • It serves as a performance indicator, facilitating future growth predictions. Additionally, it helps make business decisions.
  • It offers the opportunity for minute evaluation since it is the smallest unit of active user measurement and contributes to weekly and monthly active user data assessment.
  • The ratio of Daily Active Users (DAU) to Monthly Active Users (MAU) represents the stickiness of a website or an app. Stickiness highlights the ability of a product or service to keep users engaged, prompting them to return to the website or application at regular intervals.
  • Businesses use the DAU figure and compare it with industry standards and competitors to arrive at important business insights related to platform popularity and engagement.

Daily Active Users vs Monthly Active Users

The ratio between these metrics quantifies the proportion of monthly active users who engage with a product or service on a given day. So, here are the differences between DAU and MAU.

  • The DAU gives the active number of users in a given day. Monthly active users signify the number of active users on a website or application in a given month.
  • The DAU count takes 24 hours into consideration, while MAU counts represent 30 days of engagement on a website or mobile platform.
  • Thirty consecutive DAU counts make one MAU. However, dividing MAU by thirty days does not accurately give a particular day’s DAU count (because the DAU does not always comply with the daily average).

Frequently Asked Questions (FAQs)

1. How to maintain the daily active users?

Some tips to maintain the number of daily active users are: 
– It is vital to understand the audience and meet their needs related to the specific products or services they wish to purchase or use.
– Keeping the process simple and not compelling users to divulge information helps maintain users. 
– Making the application user-friendly and appealing helps retain and maintain users.

2. What is a good daily active users and monthly active users ratio?

In terms of engagement, a DAU/MAU ratio below 10% is considered poor as it implies that users are visiting an average of 3 times in 30 days (10% of 30 days is equal to 3 days). According to research, a ratio of around 40% is considered good. A ratio of more than 60% is considered excellent. The DAU/MAU ratio is also called stickiness.

3. What does the term unique indicate in the context of daily active users?

In the context of DAU, the term unique refers to the counting of distinct users who interact with a platform, website, product, or service on a given day. It states that each user is counted “only once”, even if they engage with the platform, website, product, or service multiple times throughout the day.

This article has been a guide to what is Daily Active Users. We explain how to calculate it, compare it with monthly active users, its examples, & importance. You may also find some useful articles here –

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