ARPDAU and LTV for Ad-Funded Apps

eCPM tells you what an impression is worth. It does not tell you what a user is worth, and that is the number you need when you decide how much to spend on growth, whether a new feature paid for itself, or whether your app can support a paid marketing campaign.

Two metrics bridge the gap. ARPDAU measures what an average active user earns you each day. Lifetime value, or LTV, measures what an install earns over the whole time that user keeps opening the app. Put LTV next to what you pay to acquire a user and you have the basic economics of an ad-funded app.

This guide defines both, shows how retention connects them, and works through an example using eCPMs from our benchmark tables. The retention figures in the example are hypothetical, so swap in your own as soon as you have them.

ARPDAU: revenue per daily user

ARPDAU stands for average revenue per daily active user.

ARPDAU = daily ad revenue / daily active users

If your app earned $550 yesterday from 10,000 daily active users, ARPDAU is $0.055. That single figure rolls together everything that affects ad income per person: how many ads each user sees, which formats they see, where they live and what each impression fetched.

That makes ARPDAU a better health check than eCPM for many decisions. Adding a banner might lower your blended eCPM while raising ARPDAU, and ARPDAU is the one that reflects your income. Our eCPM explainer covers why blended averages move in surprising ways.

Ad ARPU over a period

ARPU, average revenue per user, uses a longer window. Ad ARPU for a month is total ad revenue for the month divided by the number of unique users who opened the app in that month.

The difference matters. A user who opened the app on 20 days counts 20 times in daily figures but once in the monthly figure. So monthly ARPU is not simply ARPDAU multiplied by 30. If your app reports both, the ratio between them tells you roughly how many days a typical monthly user is active. If you also sell in-app purchases or subscriptions, keep ad ARPU separate so you can see what each income stream contributes.

Retention: the bridge to lifetime value

Retention is the share of users who come back after installing. It is usually reported as day 1, day 7 and day 30: the percentage of an install group still active on that day.

Plot retention by day and you get a curve that starts at 100% on install day, falls steeply over the first week, then flattens. The area under that curve is the number of days an average install stays active. Multiply that by ARPDAU and you have ad LTV.

LTV = ARPDAU x expected active days per install

Small changes early in the curve matter most, because every user lost on day 1 takes all their future days with them.

A worked example

Take a casual game on Android with a Tier 1 audience, monetised through AdMob. Each active user sees, on average, 3 rewarded videos, 2 interstitials and 6 banner impressions a day. Our benchmark tables give AdMob Tier 1 eCPMs of about $12.00, $8.00 and $0.90, and a casual game multiplier of 0.95.

Revenue per user per day:

• Rewarded: 3 x $12.00 x 0.95 / 1,000 = $0.0342
• Interstitial: 2 x $8.00 x 0.95 / 1,000 = $0.0152
• Banner: 6 x $0.90 x 0.95 / 1,000, about $0.0051

ARPDAU comes to about $0.0545.

Now the hypothetical retention curve. These numbers are illustrations only:

Over the first 30 days an install is active for about 4.61 days, so 30-day LTV is 4.61 x $0.0545, about $0.25. Over 90 days the total reaches about 7.01 days and LTV about $0.38.

Treat these as the centre of a band. Our tables run from 0.7x to 1.35x around each figure, which puts the 30-day value between roughly $0.18 and $0.34. On iOS our 1.3x multiplier lifts the central 30-day figure to about $0.33. The same game with a Tier 3 audience, at eCPMs of $1.40, $0.90 and $0.10, has an ARPDAU near $0.0063 and a 30-day LTV of about $0.03. Geography often moves LTV more than any design change.

You can test your own mix of formats and regions in the AdMob revenue calculator, or compare networks in the AppLovin MAX revenue calculator.

Comparing LTV with acquisition cost

Cost per install, or CPI, is what you pay a network or channel for each new user. The basic test is simple: if LTV over a period you can afford to wait is higher than CPI, the campaign can pay for itself.

Using the example above, suppose a campaign costs a hypothetical $0.30 per install. The 30-day ad LTV of about $0.25 does not cover it. The 90-day figure of about $0.38 does, but only if retention holds and you can fund the gap while the money comes in. Payouts also arrive after a delay, as our AdMob payment guide explains, so cash flow lags revenue.

Some practical rules:

• Compare LTV and CPI for the same country and platform, never blended across all markets.
• Use a payback window you can survive, not a lifetime guess.
• Measure retention by install cohort, since early users often behave differently from later ones.
• Add in-app purchase revenue separately if you have it, then compare total LTV with CPI.

Raising ARPDAU and LTV

There are two levers: earn more per active day, or keep users for more days.

To earn more per day, improve format mix and placements, add competing demand and review prices. Our guides to rewarded or interstitial ads, mediation versus a single network and fill rate cover each one.

To keep users longer, protect the first sessions. Heavy ad loads in the first day can lift ARPDAU while cutting retention, and the lost days usually outweigh the gain. Test changes on new users and judge them on LTV rather than ARPDAU alone. The wider list in earning more without more users is a good place to look for ideas.

Where to find the numbers

ARPDAU needs active user counts next to revenue. Linking your app to Google Analytics for Firebase is a common way to get them, and the AdMob report can then show user metrics where they are available. Reading the AdMob report explains where they sit, and the AdMob help centre gives Google's own definitions. Our mobile eCPM benchmarks provide the price inputs for your first estimates.