---
title: What is Monetization rate?
url: https://markin.ai/glossary/monetization-rate
category: Revenue and ARPU metrics
aliases: Paying share
---

# Monetization rate

> Monetization rate is the share of active customers who pay anything in a period. Together with ARPPU it decomposes ARPU exactly, separating how many customers were converted from how much the converted ones spent.

## How it is calculated

```
Monetization rate = Paying users / Active users
```

ARPU = Monetization rate x ARPPU. If ARPU moves, this identity says which half moved.

## Why it matters for ARPU

It is the first diagnostic to run when ARPU shifts, and it usually points at a different team than the one that gets blamed.

## Related terms

- [ARPU](https://markin.ai/glossary/arpu), ARPU, average revenue per user, is total revenue in a period divided by the average number of active users in that period.
- [ARPPU](https://markin.ai/glossary/arppu), ARPPU, average revenue per paying user, divides revenue only by users who paid in the period.
- [Revenue per available customer](https://markin.ai/glossary/revenue-per-available-customer), Revenue per available customer spreads revenue across everyone reachable, including dormant and non-paying users, rather than only the active base.
- [Cohort analysis](https://markin.ai/glossary/cohort-analysis), Cohort analysis groups customers by a shared starting characteristic, usually acquisition month, and follows each group over time.

## Go deeper

- [Product diagnosis](https://markin.ai/solutions/product-diagnosis), Where conversion actually breaks.
- [What is ARPU: definition and formula](https://markin.ai/blog/what-is-arpu-definition-formula), The decomposition in full.

Source: https://markin.ai/glossary/monetization-rate