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Dear readers, I have moved to Substack and I will be writing here from now on:
In the meantime, I will leave up for posterity. Enjoy!

Rethinking Facebook’s “Daily Active Users”

What’s the key metric for Facebook apps?
You might recall that initially, Facebook apps were measured by installs, and shown on leaderboards as such, and as a result, people optimized for that.

These days, you see people quoting DAUs, meaning Daily Active Users.

Problem is, as I wrote in my last post on "When and why do Facebook apps jump the shark?" DAUs can still hide a festering retention problem underneath a very viral app. Ideally, you want something that gives you a sense for how good the retention is, regardless of how viral it is.

Viral apps can have inflated active user counts
As you might expect, as you are acquiring tons of users in a viral process, you can inflate the active user counts. That means:

DAU = users acquired through invites + users that are repeat users because they’re happy

… and ideally, you want to separate the two, and provide metrics to reflect the information. For the second term above, let’s call that "Daily Repeat Users"

How about "Daily Repeat Users?"
One way to do that is to use the cohort method, which I discuss in the jumping the shark article above, and also here. What you’d want to expose is what % of users, after getting exposed to the app one time are likely to come back and use it again.

As a result, you want to count users that come back MULTIPLE times, but subtract out first-time users.

You might also think about how to subtract out users who come back via notifications, or other shenanigans that app developers may use to boost this new metric. Obviously you’d expect some gaming either way – it’s inevitable with so much visibility at stake – but the more transparent the better.

If anyone has other suggestions for a better way to do this, I’m all ears!


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