Daily Active Users: the complete guide
Knowing how many Daily Active Users (DAU) your website or application has can tell you a lot more than you may think.
This is a great way to determine how quickly your product is growing, what users think of a new feature or service, and even how users are behaving. Especially for subscription companies, these kinds of insights are essential.
So let’s dive into the details of how to determine DAU, then explore what you can do with it once you have.
What are Daily Active Users?
Daily Active Users (DAU for short) refers to the total number of unique users who visit and interact with your website or application within a given day. This means they not only open or log in to your product, but engage with it in some meaningful way.
How to define engagement will depend on your needs. A common method is to specify a task for people to complete, such as using a feature or filling out a form. In order to best determine how to do this, it can be helpful to think about what a successful interaction would look like to you.
That way, DAU becomes more than a number, but a measurement of performance as well.
Why is it important?
DAU is an interesting metric to measure user engagement. Once you have a good notion of what is an active user in your product (more on that below), here is what measuring DAU can tell you:
It is an ongoing check on product health. DAU gives you a window into whether users are actually using your product. You can compare how this changes every day, enabling you to identify trends and determine whether your customers are using your product as you intended.
It can warn you about potential churn. By consistently monitoring DAU, you can spot areas where users are engaging less or dropping off entirely. This will give you a chance to proactively fix areas that may be overly complicated, broken, or altogether unnecessary, helping reduce your potential churn rate.
It is key to a holistic view of your users. When combined with other KPIs, such as Monthly Active Users (MAU) and In-App Purchases (IAP), you can gain a better understanding of your users’ entire experience.
How to measure your Daily Active Users?
Depending on how you choose to define users and your criteria for active engagement, measuring DAU can range from simple to complex. Let’s start with simple. Here’s a basic formula for determining your DAU:
Unique New Users + Unique Returning Users = Total DAU
In this formula, new users refers to any person who has not previously used your product before, while returning users refers to those people who have previously used your product. Keep in mind that both of these are unique, meaning that if a person comes back and uses a feature multiple times throughout a day, they will still only count once.
What’s the point in breaking DAU apart like this? Doing so enables you to determine how well your organization is both attracting users and retaining them over the long term (or whatever period you specify). The ratio of new to active users will likely be very different for different products and services.
For example, a social platform like Facebook may expect high figures for both metrics – they want to be attracting new users and reengaging current ones at the same time. In contrast, an e-commerce clothing company may not expect users to return daily to shop. This means they may be content to see a high number of new users alongside a lower number of returning users. However, because of this, they may also find it useful to keep track of these numbers over a longer timeframe.
Defining what an Active User is
Where DAU gets a bit more complicated is when it comes to what, exactly, we mean by “active user.” The short answer is that this will depend on multiple factors, such as the type of product or service you offer, the different ways users can interact and engage with it, and the long-term goals for your company.
This last point is particularly important. Unless you’re defining “active” using an action that you can show directly impacts the success of your company, you may not be measuring DAU correctly. (Of course, how you measure “success” is another discussion entirely.)
With all that in mind, here are some of the different ways you could define what an “active user” is:
Views or Visits: This is the broadest way to define “active user.” All a user has to do is go to a webpage or application. For most companies, this won’t be very useful because it will tend to inflate DAU.
Login or Session Starts: This refers to when a user logs into their account or starts a session. Like views and visits, this can also inflate DAUs, especially if you do not specify the time period for each user to remain logged in.
Feature Interaction: This is when a user takes advantage of a specific feature or service. Maybe they “like” a photo or send a direct message to another user. Depending on the specific product, there may be some overlap with action/purchase below.
Action or Purchase: This is when a user completes a primary action within the product. This could be as simple as sending an email or making a transaction. Or it could be a more complex action, such as completing a training program. Like feature interaction, it will depend on the product.
Regardless of how you define your product’s DAU, it is good practice to rely on more than one action. Because the end goal is to produce a metric that will help you increase profit and grow your company, you will want to gain as complete a view as possible into how users are interacting with your product.
Active users definition examples
Here are a few examples of how well know companies keep track of their active users:
Facebook defines a DAU as "a registered Facebook user who logged in and visited Facebook through our website or a mobile device, used our Messenger app, or took an action to share content or activity with his or her Facebook friends or connections via a third-party website or application that is integrated with Facebook, on a given day."
Twitter defines their active users like this: "[...] the accounts of people, organizations, or other accounts who logged in or were otherwise authenticated and accessed Twitter on any given day through twitter.com, thus enabling the Twitter applications to show ads, or paid Twitter products, including subscriptions to such accounts."
Another interesting example is Duolingo. They define their Current Active Users as Users who completed a lesson today and at least one other time in the previous 7 days. That allows them to exclude new users and measure only engaged users.
Important Factors To Consider When Using DAU
Even after carefully defining the actions that will define how you track a DAU, there are still several common mistakes to look out for:
You aren’t connecting DAU to your core value
You may think you understand the core value your product or app delivers. But when your users actually start using it, you may discover that the features or services you thought would be popular actually aren’t.
This is why it’s so important to measure as much activity across the board as possible, regardless of what you anticipate your users will do. You may just find that a secondary feature, one you had considered an afterthought, is what most of your users are using. By spending more time developing and supporting that feature, you can ensure your users will continue getting value from your product.
You aren’t measuring for long-term retention
Even if you’ve identified the most popular parts of your product, if your users aren’t returning to them, then that means you’re simply measuring hype rather than actual engagement. Instead, you need to connect DAU with your user retention rate. What do users both like and return to on a regular basis? What makes your product sticky?
Sometimes, this may not be the most widely used feature. A majority of users may be initially drawn to something you’ve spent considerable time promoting. But a closer look may reveal that a smaller subset of users are actually returning due to another feature entirely. That is where your real value is. Define “active users” against retention, then understand how they grow (and churn) over time, and you’ll be able to plan for long-term growth.
You’re comparing your DAU numbers to others
DAU may seem like a simple metric you can compare across competitors, but there are many different ways to calculate it. For one, different business types will have much different priorities.
As we mentioned before, a clothing shop should not expect users to return as frequently as a social media app. But even within the same industry, comparing DAU isn’t very helpful. There are too many different features, user types and behaviors, and other metrics to account for.
You should instead focus on how your DAU trends over time. Has your active user base grown since this same period last year? Are certain features causing activity to drop off? Has a UX change helped or hurt engagement? By analyzing your data for patterns and asking the right questions, you’ll be better able to tell if you’re headed in the right direction.
