Diana Bogdanova is the Regional sales manager at Appodeal.
ARPDAU (Average Revenue Per Daily Active User) is an important measure that allows not only to calculate revenue but also evaluate the effectiveness of any given ad mediation solution. Here’s a formula:
ARPDAU = Total Revenue / DAU (Daily Active Users)
Sometimes it’s not enough to calculate general ARPDAU only to take right decisions on mediation or monetization strategies. It makes sense to esteem ARPDAU through the lens of several criteria. Let’s consider a few examples.
Breakdown by countries
Let’s imagine the following case: you noticed an obvious revenue or eCPM drop but you can’t find out what’s the problem. At the same time there were no changes on a mediation service side, and we haven’t changed your monetization strategy. In this case you should pay attention to a breakdown by countries and keep track of how metrics for Tier 1, Tier 2, and Tier 3 regions change over a period of few months.
To keep the results unbiased, it’s important to consider specific countries — usually, it’s all about your top revenue and/or traffic countries.
Suppose that your revenue top is America, and your region ratio changed — for example, US traffic went down but at the same time less profitable region (say, Tier 3, India or Russia) — went up. Then revenue would decrease significantly because US traffic was way more expensive than Tier 3.
Comparison by ad types
Do you to reveal each ad type performance or replace one ad format with another? The scenario remains the same: just monitor ARPDAU changes for different ad types plus the correlation between this measure and the number of users. ARPDAU calculation is an additional technique to analyze ad type performance. For instance, you can compare native ad and banner metrics, or explore what works better — interstitials that are showed one time per three minutes or a consistent bottom banner on the screen.
Keep in mind that ad type performance change and, consequently, ARPDAU also affect on Display Rate. Sure enough, both poor performance and ARPDAU decrease can trigger low Display Rate — this metric demonstrates a correlation between shown and downloaded ads.
Comparison by app versions
To dig deeper you can compare ARPDAU for different app versions. For example, using Google Analytics you can calculate ARPDAU of one mediation option and compare it to another app version with another mediation service, or even that app version which has no mediation service employed at all.
In addition to that there’s another option for Android version of an app: conduct A/B test of two mediation types using Google Staged Rollout and calculate and compare ARPDAU as part of the process.
! Many developers underestimate Google Staged Rollout tool, although it could be very useful. This tool allows to test not only different ad mediation service types, but also release app updates safely. For example, utilizing this tool you can upload new apk version and roll it out on 1% to 50% of your audience distributing the traffic randomly. Also during the first several days after release it’s possible to monitor crashes — and in case there are no crashes, you can roll an app out on 50%, and then on all 100% of the audience.
Seasonal fluctuation of metrics
Also it makes sense to take into account metric seasonal changes. To avoid ambiguity, exclude those months when metrics change by leaps and bounds. Generally, December is the most profitable month, and January is the month of the lowest revenue. For example, Appodeal data shows that from December 2016 till January 2017 banner ads’ eCPMs dropped 45%, Rewarded Video’s eCPMs dropped 9%, and interstitial ads’ eCPMs dropped 20%. In order to keep your evaluation objective, you shouldn’t consider these months in process.
In case with iOS version of an app we recommend to conduct tests on a quarter-by-quarter basis considering seasonal specifics. The more data you have the better: the best way to do this is to gather data for 3-6 months, or even up to 12 months. If you have such information at your fingertips, feel free to collect DAU (daily active users) for your top countries (by revenue or by traffic) for this time period and calculate ARPDAU.
Watch out if you switch your mediation services: it’s better to wait for several months before you get new ARPDAU data with a new mediation tool.
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