What is ARPU (Average Revenue Per User)?
Average Revenue Per User - a key metric for measuring monetization success.
ARPU (Average Revenue Per User) is a financial metric that measures the average amount of revenue generated per user over a specific time period. It provides insight into the monetization efficiency and helps evaluate the financial performance of mobile apps, games, and digital products.
Why It Matters
ARPU is essential for understanding monetization effectiveness and making strategic business decisions. It helps compare performance across different user segments, time periods, and competitor benchmarks. For mobile apps, ARPU directly impacts LTV (Lifetime Value) calculations and determines how much can be spent on user acquisition while maintaining profitability.
How to Calculate
ARPU = Total Revenue ÷ Total Number of Users (for a specific time period). For monthly ARPU: Monthly Revenue ÷ Monthly Active Users. For daily ARPU: Daily Revenue ÷ Daily Active Users. ARPU can be calculated for specific user segments, geographic regions, or acquisition channels.
Industry Benchmarks
| Category | Average | Good Performance |
|---|---|---|
| Mobile Gaming | $1-5 monthly ARPU | $10+ monthly ARPU |
| Social Media Apps | $1-3 monthly ARPU | $5+ monthly ARPU |
| Subscription Apps | $5-15 monthly ARPU | $20+ monthly ARPU |
| E-commerce Apps | $2-8 monthly ARPU | $15+ monthly ARPU |
Best Practices
Segment ARPU analysis by user acquisition source, geographic region, and user behavior patterns. Track ARPU trends over time to identify seasonality and growth patterns. Compare ARPU against Customer Acquisition Cost (CAC) to ensure profitable growth. Use cohort analysis to understand how ARPU develops over user lifetime. Focus on increasing ARPU through feature optimization, personalization, and strategic pricing.
Examples
A mobile game with 100,000 monthly active users generating $50,000 in monthly revenue has an ARPU of $0.50. A freemium app with 1 million users where 50,000 users spend an average of $10 per month has an overall ARPU of $0.50, but a paying user ARPU of $10.
Notes
ARPU should be analyzed alongside other metrics like retention rate and user acquisition cost for complete performance picture. High ARPU with low retention may indicate monetization is too aggressive. ARPU can vary significantly by geographic region due to purchasing power differences. Consider calculating ARPDAU (Average Revenue Per Daily Active User) for more granular insights.