• by Chris Hall , May 27, 2011

It was reported last month that Apple may have changed its Leaderboard algorithm to increase the weight of an app's use in its overall ranking system. Before this news hit the Internet, it was widely understood that Apple's Leaderboards were primarily based on raw downloads. So this change would have meant that apps appearing on a Top 25 list were opened and used more than their peer apps over time. Upon further review, however, it seems that Apple has just changed the weight associated with apps from different categories.

It's unfortunate that the originally reported change did not represent reality. However, it also seems that the future of such a change is eminent because our understanding of metrics that matter for mobile and web applications is evolving. We're beginning to realize that raw downloads don't tell us enough about how people are engaging with a particular application. Just as hit counters never really told the whole web traffic story over a decade ago. Simply put, marketers need to understand more about the engagement within a particular mobile or web application in order to make better decisions. As the cost for applications approaches free, downloads or sign-ups don't matter as much as "meaningful use."

The term "Meaningful Use" is the criterion laid out by the government to make doctors prove that they are actually implementing Electronic Health Records into their practice. The distinction is clear: It is one thing to purchase software, and it is another thing to actually integrate that software into daily routines. Although it's nice to know how many doctors have an Electronic Health Record system, it is a lot nicer to know the number of doctors actually using the software in a meaningful way. There is a clear parallel here with web and mobile applications. One way to begin to understand the engagement around an application is to ask how many people are using it daily.

It turns out that the term Daily Active User was coined "the new metric to be paying attention to" back in October of 2009, and yet it is not quite the norm to hear about the daily active users of most web or mobile applications. Twitter is a great, mainstream Internet, example of a web service that reports on registered users but not active users. The reason for this across the board is simple: active users will always be a subset of registered users, making it more impressive to publish the growth of the application's registered user base.

The truth is that there is a lot more that needs to be measured and understood when looking at mobile and web applications. Growth is a great metric to get an understanding of what is hot, but growth and engagement together paint a much clearer picture for marketers.

The Facebook ecosystem seems to have understood the importance of growth coupled with engagement for a while now. Last December, TechCrunch reported that Zynga's CityVille had six million Daily Active Users in eight days. A short five months later and CityVille has over 19 million Daily Active Users, according to AppData.com. To put 19 million Daily Active Users in perspective, 37.6 million people watched the Oscars this year, so roughly half of the people who watched the Oscars play Cityville everyday.

The fact that we have data like this in an ecosystem as large as Facebook's leads to the inevitability of the Daily Active Users metric becoming a future gold standard on every platform. Growth and engagement together begin to illustrate meaningful use, and serve as a much better indication of something worthy of your attention as a marketer.