What is ARPPU (Average Revenue Per Paying User)?
Average revenue per paying user, commonly called ARPPU, refers to the projected amount of revenue a single paying user will generate for an app within a certain time period.
How to Calculate ARPPU
To calculate ARPPU for your apps, divide the total revenue each app generates by the total number of paying users each app has. Here’s the formula:
ARPPU = (Total Revenue) / (Number of Paying Users)
For example, an app that has 25,000 paying users, and generates $100,000 over a 30 day time period, would have an ARPPU of $4.00.
Why is ARPPU Important?
ARPPU is an important metric because it helps app developers better understand their revenue streams. Once you calculate it for your app business, you’ll learn how much customers are willing to pay for your app and, perhaps more importantly, which channels, networks, and marketing campaigns attract the highest value customers.
Ways to Improve Your ARRPU
There are a few things you can do to improve ARPPU:
- Boost Prices: While this strategy may increase your ARPPU, it could lower the number of paying users your app has, reducing profits in the process.
- Convert Users: Does your app have active, non-paying users? Convert them into paying users via incentives, such as special offers and first-time purchases.
- Celebrate Users: Encourage current paying users to continue being paying users by recognizing their in-app achievements and giving them special perks.
- Try New Ad Formats: Experiment with different kinds of ads (rewarded video ads, playable ads, etc.) to boost user engagement and ARPPU metrics.
