Monthly active users are a key performance indicator (KPI) used by social networking and other companies to count the number of unique users who have visited the site within the past month. Let’s understand the importance of MAU, how you can calculate it, and improve it for your business.
What is MAU?
The MAU full form in business is monthly active users. This metric helps in identifying the number of unique users who have engaged within an app, website, or product within a predefined 30-day period.
Brands monitor MAU using a unique identifier such as a username, user ID, or email. Tracking MAU helps in understanding user engagement along with forecasting customer churn. Therefore, a business can tackle potential issues proactively.
Every brand has a different set of factors based on which they define an active. It usually depends on their vertical or business needs. MAU is often analysed with respect to daily active users (DAU) to gain deeper insight into how customers are engaging with a product.
You need to understand three components in order to understand MAU:
- Users
MAU is calculated in regard to an active user who has performed some sort of in-app activity during 30 days. This can be logging in, completing any specific action, or a set of actions. A unique user is counted only once regardless of the number of times they have logged in.
- Action
Action according to MAU depends on different businesses. Usually, an action is defined when a user opens or logs in to the app.
- Time-Frame
Lastly, the time frame helps in calculating the MAU. Here, the last month or the 30 days leading up to a certain event is considered.
Importance of MAU
Monthly active users or active people help you to understand the growth rate of your business. A high MAU indicates a good app engagement rate along with positive retention over a period. When you measure MAU, you can understand which marketing strategies have worked and help you understand your app’s health.
You can combine MAU with other marketing metrics to identify various other app metrics such as revenue growth rate as well as churn rate. Identifying your app’s churn rate can provide you with a transparent picture of why some of your users have dropped your app.
When you notice a drop in your monthly average users, it can indicate a problem with your app. Although these users may not have completely stopped using your app they are at a risk of churning. Therefore, by looking at the KPIs and implementing other metrics, you can identify the reason and implement relevant measures to improve your app’s performance.
MAU can also help you form the basis of other metrics, such as lifetime value (LTV) and cost per action (CPA). It ultimately can give you an indication of your app’s perceived value.
How to Calculate MAU?
To calculate MAU, you need to follow the three basic steps:
Step 1: Define Active User Criteria
The most important step to calculate your MAU is to determine your criteria for active users. It can be as simple as logging or any in-app action. While the former is easy, it does not provide you with definite information while the latter is more useful in terms of understanding app usage.
For instance, if you have a product that converts image files from one format to another, an active user would convert at least one image file.
Step 2: Measure Engagement Frequency
After you have determined your active user criteria, you need to measure how many of your users log in within one month. It is crucial to note that each user only counts once per month since you are measuring unique users. You can follow a similar method to count daily or weekly active users.
For example, Meta, formerly Facebook, defines MAU as a registered and logged-in user. This user should have interacted with Facebook through the company’s website or a registered mobile device. Alternatively, the registered user could also have used its Messenger app in the last 30 days as of the date of measurement.
Step 3: Collect the Data
The last step is to use any analytical tool of your choice to collect the data and calculate the number of unique users who meet your active user criteria or the selected day, and then month. Make sure to measure unique users only.
What is MAU and DAU?
MAU or monthly active users can be paired with DAU or daily active users to calculate the relative volume of monthly active users who engage with your app over a period of 24 hours. Each of the values reflects how many customers are using their service monthly or daily.
What is the DAU / MAU Ratio?
The DAU and MAU ratio can help you forecast traction and potential revenue over time. Most importantly, this ratio helps in determining the value of your product for your users by measuring how often they return to our app.
DAU to MAU ratio formula:
Number of DAU
————————— = DAU MAU Ratio
Number of MAU
For example, let’s say you have 3000 DAUs and 9000 MAUs during the month of September. Your stickiness ratio (the extent to which users engage with an app regularly) for that month would be 33%.
This percentage can be considered a good number as a stickiness average of 20$ across industries is considered good.
What Are the Advantages and Limitations of MAU?
The MAU metric has several benefits as well as limitations. The key is to understand what the useful aspects are and how you can use them to identify performance growth.
Advantages:
- Reflects User and Business Growth
The biggest advantage of the MAU metric is that it helps you identify the position of your business and is a great health indicator. The number of MAUs directly tells you if your business is growing or declining. If your MAU is going down, you need to combine or use other metrics to identify the issue and work effectively to solve it.
- Provides Information on Overall Userbase
Looking at monthly active users helps you in understanding your user base and their behaviour. By using this metric, you can identify the future churn rate and thereby, implement innovative measures to make up for it.
- Easy to Calculate
You can calculate monthly active users or MAU very easily. Once you have defined an active user for your business, you can seamlessly calculate this metric. You can also choose to use different tools to make the calculation process more efficient.
Limitations:
- Lack of Industry Standardisation
A major limitation of MAU is the lack of industry standardisation. Every company relies on their own terminology and method to calculate its MAU. Due to this reason, this metric can only sometimes be used for making meaningful comparisons.
For instance, you can decide that the average user logs into your site five times in a month and count that as your active user. However, your competitor may count one user log-in per month for their active user. Due to this, this metric becomes useful when it comes to comparison.
- Can be Unreliable
If you put too much emphasis on MAU in the early stages of your business, it can be problematic. This is because your monthly active users are impacted by various other metrics such as paid ads and social media campaigns among others.
All these factors can inflate your MAU figure and provide you with no indication of steady growth. It is always recommended to use MAU once your site traffic has normalised over a few months so that you can get proper results.
- Depth of Usage Cannot be Measured
Another key limitation of MAU is that it cannot help you to completely understand user engagement. Simply logging in to your app does not lead to app engagement and you can only gain revenue when users are actively engaging with your app.
For example, if a user logs in to your site or opens your product for a couple of seconds and then leaves, it doesn’t provide you with information about the user using any feature of this app. This makes MAU a slightly superficial metric when it is viewed as a standalone figure. For this reason, if you define your active user by something meaningful, it can help you with more definitive results and give you a better idea of who is using your product.
- Quality of Users Cannot be Measured
Different sources of media will produce different user engagement behaviours. While some of your campaigns may lead to a steady number of installs, the users associated with that source may exhibit poor engagement and may lead to a sudden spike in the churn rate.
So, monthly active users for a specific campaign might look massive, however, the value of the acquired could be sub-par. It can also negatively impact your brand reputation, social media reviews, app store score, and customer satisfaction levels.
For example, after Meta acquired Instagram and WhatsApp, it made adjustments to its metric and published plans in 2022 on how it would add new components to the metric. For instance, the company would use “family” metrics to measure monthly and daily active people across all its platforms. This gives the platform an edge to gain insight into its users and gain valuable inputs.
How to Improve MAU?
To increase your app engagement, you need to include multiple channels like email, and in-app notifications and create re-engagement campaigns. Here are some tips on how MAU can be increased:
- Push Notifications
Push notifications are one of the most effective ways to engage your app users. However, you need to keep in mind the value you are providing to your user. You should never overuse push notifications as it can backfire and increase your uninstall rates.
Focus on improving your user’s experience by using personalised messages so that your user feels motivated to use your app or product again. Check push notification statistics regularly to figure out which techniques work and what you should avoid.
- Email / SMS
You can retain your customers when they have your app at the top of their minds. When this happens, they will come back to your app again and again. App onboarding is a continuous process and your new users may take some time to tap into the full potential of your app.
Here, emails or messages can prove to be valuable. You can remind users who were once active or new users who have downloaded the app but haven’t used it much. Your copy can say, “We miss you. Here are exciting updates that you might find useful.”
A user who was once active for 10 days straight but did not open your app for 4 days may appreciate the email with the update. With proper audience segmentation, you can identify the difference between an ideal and engaged user and create your campaigns accordingly.
- In-app messages
If your app is in alignment with the user’s needs, then they are likely to continue using it. Personalised in-app messages play a key role in increasing customer retention rates as they usually focus on improving the customer experience by notifying them about version upgrades or app issues.
To make the most out of this process, you need to segment your audience based on their regions, usage, preferences, or history. Tailor the messages that include real-time updates and links to personalised content.
- Deep Linking
Deep linking helps your user to directly land on the app page where you want them. It can be the install page of your app or if your user already has the app, it may redirect them to update. Attribution-fueled deep linking is a great cross-channel strategy.
By linking your siloed channels into one compact user experience platform, you make it easier for the user and provide them with a positive experience. With this strategy, you can build long-lasting relationships with your users and gain a competitive advantage against your competitors.
Conclusion
Thus, monthly active users or MAU is a useful metric for a quick overview of your company’s performance. It becomes more meaningful when you define your active user engaging with your app or product in a productive manner.
However, it’s best to not use this metric for comparison purposes and only use it when your business has a steady traffic flow. With MAU, you can get an insight into the number of users using your app and offer your insights into app engagement, user acquisition, retention and churn rate as well as growth rate.