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March 01, 2015

Is MAU an effective audience metric?

instagram-user-growthThere was much hullabaloo in December when Instagram announced it had reached the milestone of 300 million monthly users, surpassing Twitter, and putting the latter under a bit of pressure in its earnings call a couple of weeks ago. But there has also been plenty of debate about whether these measures of the reach of major internet services are reliable, especially when comparing numbers from two different companies. Just what is a “monthly active user”, or MAU, anyway?

Defining MAU and DAU

Monthly Active Users is a pretty simple metric conceptually – it is the number of unique users who were “active” on a service within a given month. It doesn’t matter how many times each user used the service in the month; they’re only counted once (it’s a UU measure, after all). Daily Active Users is just the same measure, but over the period of a single day. So when Instagram says it had 300m active users in the Month of November, that means that 300m unique users did something in one of Instagram’s apps during the month.

Of course, for a signed-in service like Facebook, Twitter or Instagram, the total number of registered users will always be much higher than active users, since there will always be a significant subset of users who register for a service and then never use it (or have stopped using it). By some estimates, Twitter has almost 900 million registered users, almost four times the number of monthly active users. But registered users doesn’t tell you very much if you’re trying to run one of these services, at least not on its own – if it is massively out of whack with your active user counts, then it might indicate that your service isn’t very compelling or sticky.

Since journalists are also skeptical about registered user numbers, online services have taken to reporting MAU instead. These services have an incentive to report the biggest possible active user numbers, so tend to include almost any measurable interaction with their app or service in the definition of “active”. But from an analytical point of view, this isn’t the most helpful definition. Not every interaction with a website or app really represents “active” or “intentional” use. But how do you define “active” engagement with your app or service? That depends on what you’re trying to achieve with the metric. Let’s break it down.

MAU vs MEU

Let’s look at some of the things you can do with the Instagram app:

  • Launch the app
  • Browse your feed (just look at photos)
  • Look at someone’s profile
  • Follow someone
  • Favorite a photo
  • Comment on a photo
  • Post a photo
  • Post a video

I’ve tried to order this list from “least-engaged” behaviors at the top to “most-engaged” behaviors at the bottom. At one end of the spectrum, it’s almost impossible to use Instagram without browsing your feed (it’s the thing that comes up when you launch the app), so it’s hardly a reliable indication of true engagement (some fraction of that number will even be people who launched the app by mistake when they were stabbing at their phone trying to launch Candy Crush Saga from the icon next door). At the other end, users who are posting lots of photos and video are clearly much more engaged, and a count of these folks would be a reliable indication of the size of the engaged population.

So where to draw the line? That depends on what you consider to be the minimum bar for “engaged” behavior. At Microsoft we’re having some very interesting discussions internally on where and how to draw this line across our diverse range of products – “Active” use means something very different across Bing, Office and Skype, to name just three. The advice I am giving my colleagues is to set the bar fairly high (i.e. not count too many behaviors as active use). Why? Well, consider the diagram below:

image

The outermost circle in the diagram represents the entire population of users of a service. As we covered earlier, only a subset of these users could be considered “active” (i.e. actually use the service at all), and an even smaller subset “active and engaged” (use the service in a meaningful way). If you’re running the service, it’s this group of users, however, that you’re most interested in cultivating and growing – they’re the ones who become the “fans” that will promote your service to their friends, and (if your service has any sort of social or network quality) will actually contribute to the quality of the service itself (Instagram would be pretty dull if nobody posted any photos).

What this all adds up to is that if you’re looking to track the growth and engagement of your user base, you probably want to track a couple of metrics:

  • Monthly Active Users (MAU) [Active Unengaged + Active Engaged, above]
  • Monthly Engaged Users (MEU) [Active Engaged only]

Of these two, the really important one is the MEU – the a number that really represents worthwhile usage of your product or service, and which only includes behaviors that are the ones you really want to encourage amongst the user base. If I were working at Instagram, I’d probably include almost all of the actions in the list above (possibly excluding app launch) in my definition of Active Users; but I would only include “Post picture” and “Post video” in my definition of Engaged Users (I might be persuaded to include “Post Comment” since it does contribute to the network.

Tracking MEU has another couple of advantages: If the number goes down, you’ll know that engagement with your service is diminishing. You can also track MEU as a fraction of MAU: If MEU/MAU is only 50% you can focus on growing engagement in your active base, whereas if MEU/MAU is 95% (i.e. almost all active users are engaged), you’ll probably want to focus on growing the active base (by recruiting new users).

The tactics for moving MAU and MEU will differ. To grow MEU, you can market to your existing base of “active unengaged” users (the population who falls into MAU but not MEU). These are the lurkers or the casual users who may only need a little nudge to become truly engaged and move into the middle circle. To grow MAU, you’ll need to recruit new users to your service, either from the pool of inactive users, or from the general population. This is usually a harder nut to crack, and one of the best tools in any case is to use your base of engaged “fans” to recruit – which underlines the importance of growing the MEU number.

So a final benefit of using MEU is that it is likely easier to move than MAU; and the next time you’re standing in front of your VP going through your product dashboard, you’ll be glad you picked a KPI you can actually move.

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