Varos Glossary

Daily Active User (DAU)

What is Daily Active User (DAU)

Daily active users (DAU) measures the total number of unique, engaged users on an application or platform within a 24-hour timeframe. While a large number of daily active users can indicate success, an active user doesn't always equate to a conversion or sale — for instance, an active user may be immensely frustrated with your software, and counting the days until they find a better alternative. 

Remember also that no metric exists in a vacuum. If you measure DAU without any further context, you may hobble yourself with an inaccurate picture of your business. You need to measure DAU alongside other growth and sales metrics. 

Lastly, it's also possible to misdefine your criteria for an active user and end up tracking activities or behaviors that don't align with your business goals. For this reason, I advise putting a great deal of thought into what it means to be active on your platform — something we'll discuss later in this glossary entry.

Why is the DAU Metric Important?

DAU gives you a sense of how many people interact with your brand each day. In addition to providing you with a window into the popularity of your platform, it also allows you to evaluate several other factors. These include:

  • The overall health and projected success of your business.
  • Your growth potential. 
  • Potential conversion or usability bottlenecks in your product, service, or website. 
  • Historic growth and activity trends.
  • The effectiveness of your marketing and advertising. 

DAU is typically measured alongside other SaaS benchmarks such as: 

Caption: Metrics such as revenue growth, repeating order ratio, and average order value provide important context when measuring DAU.

What Constitutes an Active User?

The most challenging thing about measuring DAU is defining what it means to be an active user. Every business has its own criteria for determining this. For instance, consider the top three social network: 

  • On Facebook, daily active users include anyone who interacts with the application in any way. Even liking a single post qualifies.
  • For Instagram, daily active users are likely defined along similar criteria to Facebook, in that any interaction with the app is enough to qualify.  
  • TikTok, with daily active users totaling roughly 50 million in the United States alone, has not released its criteria for measuring user activity. Being considered 'active' may be as simple as logging into the app, or you may be required to watch or browse content.

To define your own criteria for an active user, consider:

  • What forms of engagement align with your business objectives? This could include adding items to a shopping cart, interacting with specific product features, or simply spending a certain amount of time using an app. 
  • What types of interaction should be disregarded? For instance, if a user logs in and remains idle. 
  • Does frequency of interaction matter? To put it another way, is a single interaction with your application or platform enough to be considered active, or must this happen several times? 

How to Calculate Daily Active Users

To calculate DAU:

  1. Ensure you've defined your criteria for an active user, and that these criteria align with your goals. 
  2. Determine a specific timeframe you want to measure — which 24-hour window will you focus on? 
  3. Using an analytics tool, identify the number of unique users who match your criteria within that window. 
  4. Repeat as many times as you deem necessary.

By regularly calculating your DAU, you can identify possible upward or downward trends in business growth — and in the case of the latter, take action to address any potential issues.