active users
{{Short description|Performance metric for success of an internet product}}
{{Use mdy dates|date=February 2019}}
{{Infobox unit
| name = Active users
| image = Indonesian Wikipedia Active Users February 2012.jpg
| caption = Number of new and active Wikipedia users in Indonesia between September 2010 and March 2012
| standard = Product metric
| quantity = Media consumption
| symbol = DAU, WAU, MAU
}}
Active users is a software performance metric that is commonly used to measure the level of engagement for a particular software product or object, by quantifying the number of active interactions from users or visitors within a relevant range of time (daily, weekly and monthly).
The metric has many uses in software management such as in social networking services, online games, or mobile apps, in web analytics such as in web apps, in commerce such as in online banking and in academia, such as in user behavior analytics and predictive analytics. Although having extensive uses in digital behavioural learning, prediction and reporting, it also has impacts on the privacy and security, and ethical factors should be considered thoroughly. It measures how many users visit or interact with the product or service over a given interval or period.{{cite journal | vauthors = Henry TF, Rosenthal DA, Weitz RR | title = Socially Awkward: Social Media Companies' Nonfinancial Metrics Can Send a Mixed Message | journal = Journal of Accountancy | date = September 2014 | volume = 218 | issue = 3 | pages = 52 | id={{Gale|A381838689}} }} However, there is no standard definition of this term, so comparison of the reporting between different providers of this metric is problematic. Also, most providers have the interest to show this number as high as possible, therefore defining even the most minimal interaction as "active".{{cite web | title = Spotify for instance defines monthly active users as "..the total count of Ad-Supported Users and Premium Subscribers that have consumed content for greater than zero milliseconds in the last thirty days from the period-end indicated" | url = https://s29.q4cdn.com/175625835/files/doc_financials/2022/q3/57490e79-80c9-4704-a0c3-9f9683c7d11f.pdf | access-date = January 7, 2023}} Still the number is a relevant metric to evaluate development of user interaction of a given provider.
This metric is commonly assessed per month as monthly active users (MAU),{{cite web | title = Monthly Active Users (MAU) | work = AppStore Knowledge Base | date = December 11, 2019 | publisher = AppStoreGrowth | url = https://www.appstoregrowth.com/knowledge-base/mau/ | access-date = January 20, 2020 | archive-date = March 8, 2021 | archive-url = https://web.archive.org/web/20210308140213/https://www.appstoregrowth.com/knowledge-base/mau/ | url-status = dead }} per week as weekly active users (WAU),{{cite web|access-date=February 16, 2019|title=How Slack Plans to Make It Easier to Chat With Colleagues at Other Companies|url=http://fortune.com/2017/09/12/slack-shared-channels/|website=Fortune|first=Barb|last=Darrow | name-list-style = vanc |date=September 12, 2017}} per day as daily active users (DAU){{cite news|access-date=February 16, 2019|title=Twitter reveals its daily active user numbers for the first time|url=https://www.washingtonpost.com/technology/2019/02/07/twitter-reveals-its-daily-active-user-numbers-first-time/|newspaper=The Washington Post|first=Hamza|last=Shaban | name-list-style = vanc |date=February 7, 2019}} and peak concurrent users (PCU).{{cite journal |last1=Wu |first1=Xianfeng |title=Who’s watching? Classifying sports viewers on social live streaming services |journal=Annals of Operations Research |date=January 2024 |volume=332 |issue=1-3 |pages=1303–1305 |doi=10.1007/s10479-023-05305-6}}
Commercial usage
= Predictors of success engagement measurement (KPI) and advertisement =
Active users on any time scale offers a rough overview of the amount of returning customers a product maintains, and comparing the changes in this number can be used to predict growth or decline in consumer numbers. In a commercial context, the success of a social-networking-site is generally associated with a growing network of active users (greater volume of site visits), social relationships amongst those users and generated contents. Active Users can be used as a key performance indicator (KPI), managing and predicting future success, in measuring the growth and current volume of users visiting and consuming the site. The ratio of DAU and MAU offers a rudimentary method to estimate customer engagement and retention rate over time.{{cite journal |title=Understanding repeat playing behavior in casual games using a Bayesian data augmentation approach |journal=Quantitative Marketing and Economics}} A higher ratio represents a larger retention probability, which often indicates success of a product. Ratios of 0.15 and above are believed to be a tipping point for growth while sustained ratios of 0.2 and above mark lasting success.{{Cite web|url=https://www.gamesbrief.com/2011/10/daumau-engagement/|title=DAU/MAU = engagement|last=Lovell|first=Nicholas | name-list-style = vanc |date=October 26, 2011|website=Gamesbrief|access-date=December 3, 2019}}
Chen, Lu, Chau, and Gupta (2014){{cite journal |last1=Chen |first1=Aihui |last2=Lu |first2=Yaobin |last3=Chau |first3=Patrick Y.K. |last4=Gupta |first4=Sumeet |title=Classifying, Measuring, and Predicting Users' Overall Active Behavior on Social Networking Sites |journal=Journal of Management Information Systems |date=3 July 2014 |volume=31 |issue=3 |pages=213–253 |doi=10.1080/07421222.2014.995557 |s2cid=38855806 }} argues that greater numbers of users (early adopters) will lead to greater user-generated content, such as posts of photos and videos, that "promotes and propagates" social media acceptance, contributing to social-networking-site growth. The growth of social media use, characterised as increase of active users in a pre-determined timeframe, may increase an individual's social presence. Social presence can be defined as the degree to which a social-networking communications medium allows an individual to feel present with others.{{cite journal |last1=Fulk |first1=Janet |last2=Steinfield |first2=Charles W. |last3=Schmitz |first3=Joseph |last4=Power |first4=J. Gerard |title=A Social Information Processing Model of Media Use in Organizations |journal=Communication Research |date=October 1987 |volume=14 |issue=5 |pages=529–552 |doi=10.1177/009365087014005005 |s2cid=145786143 }}{{cite journal |last1=Cyr |first1=Dianne |last2=Hassanein |first2=Khaled |last3=Head |first3=Milena |last4=Ivanov |first4=Alex |title=The role of social presence in establishing loyalty in e-Service environments |journal=Interacting with Computers |date=January 2007 |volume=19 |issue=1 |pages=43–56 |doi=10.1016/j.intcom.2006.07.010 }}
Moon and Kim's (2001){{cite journal |last1=Moon |first1=Ji-Won |last2=Kim |first2=Young-Gul |title=Extending the TAM for a World-Wide-Web context |journal=Information & Management |date=February 2001 |volume=38 |issue=4 |pages=217–230 |doi=10.1016/S0378-7206(00)00061-6 |citeseerx=10.1.1.859.5396 |s2cid=17709833 }} research results found that individual's enjoyment of web systems have positive impacts on their perceptions on the system, and thus would form "high behaviour intention to use it". Munnukka (2007){{cite journal |last1=Munnukka |first1=Juha |title=Characteristics of early adopters in mobile communications markets |journal=Marketing Intelligence & Planning |date=30 October 2007 |volume=25 |issue=7 |pages=719–731 |doi=10.1108/02634500710834188 }} have found strong correlations between positive previous experience of related types of communications and adoption of new mobile site communication services. However, there are also cases where active users and revenue seemed to have a negative correlation. For instance, Snap Inc.'s gains in daily active users (DAU) have stabilised or decreased during the COVID-19 Pandemic, revenue still exceeded estimates, with strong similar strong trends in the current period.{{Cite news|date=2020-07-21|title=Snap's Missed User Target Shows Challenge Predicting Growth|language=en|work=Bloomberg.com|url=https://www.bloomberg.com/news/articles/2020-07-21/snap-s-daily-user-growth-lags-forecast-revenue-gains-17|access-date=2020-11-01}}
File:New articles+active users on Swedish Wikipedia.png
Greater number active users boost the number of visits on particular sites. With more traffic, more advertisers will be attracted, contributing to revenue generation.{{cite journal |last1=Chen |first1=Rui |title=Member use of social networking sites — an empirical examination |journal=Decision Support Systems |date=February 2013 |volume=54 |issue=3 |pages=1219–1227 |doi=10.1016/j.dss.2012.10.028 }} In 2014, 88% of corporation's purpose of social media usage is advertising.{{cite journal |last1=Dehghani |first1=Milad |last2=Niaki |first2=Mojtaba Khorram |last3=Ramezani |first3=Iman |last4=Sali |first4=Rasoul |title=Evaluating the influence of YouTube advertising for attraction of young customers |journal=Computers in Human Behavior |date=June 2016 |volume=59 |pages=165–172 |doi=10.1016/j.chb.2016.01.037 }} Active Users increase allows social-networking sites to build and follow more customer profiles, that is based on customer's needs and consumption patterns.{{cite journal |last1=Rao |first1=Bharat |last2=Minakakis |first2=Louis |title=Evolution of mobile location-based services |journal=Communications of the ACM |date=December 2003 |volume=46 |issue=12 |pages=61–65 |doi=10.1145/953460.953490 |s2cid=1330830 }} Active user data can be used to determine high traffic periods and create behavior models of users to be used for targeted advertising. The increase of customer profiles, due to increase of active users, ensures a more relevant personalised and customised advertisements. Bleier and Eisenbeiss (2015){{cite journal |last1=Bleier |first1=Alexander |last2=Eisenbeiss |first2=Maik |title=Personalized Online Advertising Effectiveness: The Interplay of What, When, and Where |journal=Marketing Science |date=September 2015 |volume=34 |issue=5 |pages=669–688 |doi=10.1287/mksc.2015.0930 }} found that more personalised and relevant advertisements increase "view-through responses" and strengthen the effectiveness of "the advertised banner" significantly. DeZoysa (2002){{Cite journal|last=DeZoysa|first=Sanjima|title=Mobile advertising needs to get personal|journal=Telecommunications International |volume=36|issue=2}} found that consumers are more likely to open and responsive on personalised advertisements that are relevant to them.
= External reporting purposes =
The Financial Accounting Standard Board defines that objective of financial reporting is provide relevant and material financial information to financial statement users to allow for decision making and ensure an efficient economic |resource allocation.FASB. (2008). Statement of Financial Accounting Concepts No. 1. Retrieved from http://www.fasb.org/resources/ccurl/816/894/aop_CON1.pdf All reporting entities, primarily publicly listed companies and large private companies are required by law to adhere to disclosure and accounting standards requirements. For example, in Australia, companies are required to comply with accounting standards set by the Australian Accounting Standards Board, which is part of the Corporations Act 2001. In social media company's context, there is also reporting of non-financial information, such as the number of users (active users). Examples may include:
class="wikitable"
! Company |
Facebook
|Daily Active Users (DAU), Monthly Active Users (MAU) |
Twitter
|Monthly Active Users (MAU), Timeline Views Per MAU |
Groupon
|Active Customer Units |
Alternative methods of reporting these metrics are through social networks and the web, which have become important part of firm's "information environment" to report financial and non-financial information, according to Frankel (2004),{{cite journal |last1=Frankel |first1=Richard |last2=Li |first2=Xu |title=Characteristics of a firm's information environment and the information asymmetry between insiders and outsiders |journal=Journal of Accounting and Economics |date=June 2004 |volume=37 |issue=2 |pages=229–259 |doi=10.1016/j.jacceco.2003.09.004 }} whereby firm relevant information is being spread and disseminated in short spans of time between networks of investors, journalists, and other intermediaries and stakeholders.{{cite journal |last1=Rubin |first1=Amir |last2=Rubin |first2=Eran |title=Informed Investors and the Internet |journal=Journal of Business Finance & Accounting |date=July 2010 |volume=37 |issue=7–8 |pages=841–865 |doi=10.1111/j.1468-5957.2010.02187.x |s2cid=59058862 }} Investment blogs aggregator, like Seeking Alpha, has become significant for professional financial analysts,{{cite journal |last1=Saxton |first1=Gregory D. |title=New Media and External Accounting Information: A Critical Review: New Media and External Accounting Information |journal=Australian Accounting Review |date=September 2012 |volume=22 |issue=3 |pages=286–302 |doi=10.1111/j.1835-2561.2012.00176.x }} who give recommendations on buying and selling stocks. Studies by Frieder and Zittrain (2007){{cite journal |last1=Frieder |first1=Laura L. |last2=Zittrain |first2=Jonathan |title=Spam Works: Evidence from Stock Touts and Corresponding Market Activity |journal=Berkman Center Working Paper |date=2007 |url=http://nrs.harvard.edu/urn-3:HUL.InstRepos:4455162 |ssrn=920553 }} have raised new concerns about how digital communications technologies information reporting have the ability to affect market participants.
Admiraal (2009){{cite journal |id={{ProQuest|236822392}} |last1=Admiraal |first1=Michèl |last2=Nivra |first2=Royal |last3=Turksema |first3=Rudi |title=Reporting on Nonfinancial Information |journal=International Journal of Government Auditing |volume=36 |issue=3 |date=July 2009 |pages=15–20 }} emphasised that nonfinancial metrics reported by social media companies, including active users, may give not desirable assurance in success measurements, as the guidance, and reporting regulations that safeguards the reliability and quality of the information are too few and have not yet been standardized. Cohen et al. (2012){{cite journal |last1=Cohen |first1=Jeffrey R. |last2=Holder-Webb |first2=Lori L. |last3=Nath |first3=Leda |last4=Wood |first4=David |title=Corporate Reporting of Nonfinancial Leading Indicators of Economic Performance and Sustainability |journal=Accounting Horizons |date=1 March 2012 |volume=26 |issue=1 |pages=65–90 |doi=10.2308/acch-50073 |s2cid=154627046 }} research on a set of economic performance indicators found that there is a lack of extensive disclosures and a material variability between disclosure practices based on industries and sizes. In 2008, the U.S. Securities and Exchange Commission took a cautious approach in revising their public disclosure guidance for social media companies and claim the information to be "supplemental rather than sufficient by themselves".U.S. Securities & Exchange Commission. (2008). Commission guidance on the use of company web sites (Release No. 34- 58288). Retrieved from http://www.sec.gov/rules/interp/%202008/34-58288.pdf. Alexander, Raquel, Gendry and James (2014){{cite journal |last1=Alexander |first1=Raquel Meyer |last2=Gentry |first2=James K. |title=Using social media to report financial results |journal=Business Horizons |date=March 2014 |volume=57 |issue=2 |pages=161–167 |doi=10.1016/j.bushor.2013.10.009 }} recommended that executives and managers should take a more strategic approach in managing investor relations and corporate communications, ensuring investor's and analyst's needs are jointly met.
Usage in academia
= Researching and web-behavioural analysis and prediction =
The active user metric can be particularly useful in behavioural analytics and predictive analytics. The active user metric in the context of predictive analytics can be applied in a variety of fields including actuarial science, marketing, finance services, healthcare, online-gaming, and social networking. Lewis, Wyatt, and Jeremy (2015),{{cite journal |last1=Lewis |first1=Thomas Lorchan |last2=Wyatt |first2=Jeremy C |title=App Usage Factor: A Simple Metric to Compare the Population Impact of Mobile Medical Apps |journal=Journal of Medical Internet Research |date=19 August 2015 |volume=17 |issue=8 |pages=e200 |doi=10.2196/jmir.4284 |pmc=4642395 |pmid=26290093 |doi-access=free }} for example, have used this metric conducted a research in the fields of healthcare to study quality and impacts of a mobile application and predicted usage limits of these applications.
Active users can also be used in studies that addresses the issue of mental health problems that could cost the global economy $16 Trillion U.S. Dollars by 2030, if there is a lack of resource allocated for mental health.{{cite journal |last1=Patel |first1=Vikram |last2=Saxena |first2=Shekhar |last3=Lund |first3=Crick |last4=Thornicroft |first4=Graham |last5=Baingana |first5=Florence |last6=Bolton |first6=Paul |last7=Chisholm |first7=Dan |last8=Collins |first8=Pamela Y |last9=Cooper |first9=Janice L |last10=Eaton |first10=Julian |last11=Herrman |first11=Helen |last12=Herzallah |first12=Mohammad M |last13=Huang |first13=Yueqin |last14=Jordans |first14=Mark J D |last15=Kleinman |first15=Arthur |last16=Medina-Mora |first16=Maria Elena |last17=Morgan |first17=Ellen |last18=Niaz |first18=Unaiza |last19=Omigbodun |first19=Olayinka |last20=Prince |first20=Martin |last21=Rahman |first21=Atif |last22=Saraceno |first22=Benedetto |last23=Sarkar |first23=Bidyut K |last24=De Silva |first24=Mary |last25=Singh |first25=Ilina |last26=Stein |first26=Dan J |last27=Sunkel |first27=Charlene |last28=UnÜtzer |first28=JÜrgen |title=The Lancet Commission on global mental health and sustainable development |journal=The Lancet |date=October 2018 |volume=392 |issue=10157 |pages=1553–1598 |doi=10.1016/s0140-6736(18)31612-x |pmid=30314863 |s2cid=52976414 |url=https://kclpure.kcl.ac.uk/portal/en/publications/the-lancet-commission-on-global-mental-health-and-sustainable-development(849a67c7-9a29-496a-82e2-706a71158e19).html }} Through web-behavioural analysis, Chuenphitthayavut, Zihuang, and Zhu (2020){{cite journal |last1=Chuenphitthayavut |first1=Krittipat |last2=Zihuang |first2=Tang |last3=Zhu |first3=Tingshao |title=The prediction of behavioral intention to use online mental health interventions |journal=PsyCh Journal |date=June 2020 |volume=9 |issue=3 |pages=370–382 |doi=10.1002/pchj.333 |pmid=31957241 |s2cid=210832011 }} discovered that the promotion of informational, social and emotional support that represents media and public perception has positive effects on their research participants behavioural intention to use online mental health intervention. Online psychological educational program, a type of online mental health interventions are found to promote well-being, and decreased suicidal conception.{{cite journal |last1=Hoffmann |first1=Willem A. |title=Telematic Technologies in Mental Health Caring: A Web-Based Psychoeducational Program for Adolescent Suicide Survivors |journal=Issues in Mental Health Nursing |date=January 2006 |volume=27 |issue=5 |pages=461–474 |doi=10.1080/01612840600599978 |pmid=16613799 |s2cid=34925001 }}
In the fields of online-gaming, active users is quite useful in behaviour prediction and churn rates of online games. For example, active user's features such "active Duration" and "play count" can have inverse correlations with churn rates, with "shorter play times and lower play count" associated with higher churn rates.{{cite journal |last1=Kim |first1=Seungwook |last2=Choi |first2=Daeyoung |last3=Lee |first3=Eunjung |last4=Rhee |first4=Wonjong |title=Churn prediction of mobile and online casual games using play log data |journal=PLOS ONE |date=5 July 2017 |volume=12 |issue=7 |pages=e0180735 |doi=10.1371/journal.pone.0180735 |pmc=5498062 |pmid=28678880 |bibcode=2017PLoSO..1280735K |doi-access=free }} Jia et Al. (2015){{cite journal |last1=Jia |first1=Adele Lu |last2=Shen |first2=Siqi |last3=Bovenkamp |first3=Ruud Van De |last4=Iosup |first4=Alexandru |last5=Kuipers |first5=Fernando |last6=Epema |first6=Dick H. J. |title=Socializing by Gaming: Revealing Social Relationships in Multiplayer Online Games |journal=ACM Transactions on Knowledge Discovery from Data |date=26 October 2015 |volume=10 |issue=2 |pages=1–29 |doi=10.1145/2736698 |s2cid=207224445 |url=http://resolver.tudelft.nl/uuid:92b43f9a-9dbf-4d92-bfdd-babbb5831116 }} showed that there are social structures that transpire or emerge and centred around highly active players, with structural similarity between multiplayer online-games, such as StarCraft II and Dota.
The Active Users metric can be used to predict one's personality traits, which can be classified and grouped into categories. These categories have accuracy that ranges from 84%–92%.{{cite journal |last1=Li |first1=Lin |last2=Li |first2=Ang |last3=Hao |first3=Bibo |last4=Guan |first4=Zengda |last5=Zhu |first5=Tingshao |title=Predicting Active Users' Personality Based on Micro-Blogging Behaviors |journal=PLOS ONE |date=22 January 2014 |volume=9 |issue=1 |pages=e84997 |doi=10.1371/journal.pone.0084997 |pmid=24465462 |pmc=3898945 |bibcode=2014PLoSO...984997L |doi-access=free }} Based on the number of user's in a particular group, the internet object associated with it, can be deemed as "trending", and as an "area of interest".
Ethical considerations and limitations
With the internet's evolution into a tool used for communications and socialisation, ethical considerations have also shifted from data-driven to "human-centered", further complicating the ethical issues relating with concepts of public and private on online domains, whereby researchers and subjects do not fully understand the terms and conditionsBuchanan, E., & Zimmer, M. (2018). Internet Research Ethics. In The Stanford Encyclopedia of Philosophy. Metaphysics Research Lab, Stanford University. https://plato.stanford.edu/entries/ethics-internet-research/ Ethical considerations need to be considered in terms of participative consent, data confidentiality-privacy-integrity, and disciplinary-industry-professional norms and accepted standards in cloud computing and big data research. Boehlefeld (1996){{cite journal |last1=Boehlefeld |first1=Sharon Polancic |title=Doing the Right Thing: Ethical Cyberspace Research |journal=The Information Society |date=June 1996 |volume=12 |issue=2 |pages=141–152 |doi=10.1080/713856136 }} noted that researchers usually refer to ethical principals in their respective disciplines, as they seek guidance and recommended the guidelines by the Association for Computing Machinery to assist researchers of their responsibilities in their research studies in technological or cyberspace.
Informed consent refers to a situation that participant voluntarily participates in the research with full acknowledgement of the methods of research, risks and rewards associated. With the rise internet being used as a social networking tool, active users may face unique challenges in gaining informed consents. Ethical considerations may include degree of knowledge to the participants and age appropriateness, ways and practicality in which researchers inform, and "when" it is appropriate to waive the consent.{{cite journal |last1=Hudson |first1=James M. |last2=Bruckman |first2=Amy |title='Go Away': Participant Objections to Being Studied and the Ethics of Chatroom Research |journal=The Information Society |date=April 2004 |volume=20 |issue=2 |pages=127–139 |doi=10.1080/01972240490423030 |s2cid=18558685 |citeseerx=10.1.1.72.635 }} Crawford and Schultz (2014){{cite journal |id={{ProQuest|1664533162}} |last1=Crawford |first1=Kate |last2=Schultz |first2=Jason |title=Big Data and Due Process: Toward a Framework to Redress Predictive Privacy Harms |journal=Boston College Law Review |volume=55 |issue=1 |date=January 2014 |pages=93–128 |url=http://lawdigitalcommons.bc.edu/bclr/vol55/iss1/4 }} have noted consent to be "innumerable" and "yet-to-be-determined" before the research is conducted. Grady et al. (2017){{cite journal |last1=Grady |first1=Christine |last2=Cummings |first2=Steven R. |last3=Rowbotham |first3=Michael C. |last4=McConnell |first4=Michael V. |last5=Ashley |first5=Euan A. |last6=Kang |first6=Gagandeep |title=Informed Consent |journal=New England Journal of Medicine |date=2 March 2017 |volume=376 |issue=9 |pages=856–867 |doi=10.1056/nejmra1603773 |pmid=28249147 |doi-access=free }} pointed out that technological advancements can assist in obtaining consent without the in-person meeting of investigators (researchers) and the research participants.
A large number of researches is based on individualised data, that encompass users online identity (their clicks, readings, movements) and contents consumed and with data-analytics produced inferences about their preferences, social relationships, and movement or work habits. In some cases, individuals may greatly benefit, but in others they can be harmed. Afolabi and García-Basteiro (2017){{cite journal |title=Informed Consent |journal=New England Journal of Medicine |date=18 May 2017 |volume=376 |issue=20 |pages=e43 |doi=10.1056/NEJMc1704010 |url=https://researchonline.lshtm.ac.uk/id/eprint/3928366/1/Informed%20Consent_GREEN%20VoR.pdf }} believed that informed consent to research studies is beyond "clicking blocks or supplying signature", as participants could have feel pressured in to joining the research, without researcher's awareness of the situation. There is yet to be a universally accepted form of industry standards and norms in terms of data-privacy, confidentiality and integrity, a critical ethics consideration, but there has been attempts to design a process to oversee the research activities and data collection to better meet the community and end-user's expectations.{{cite journal |last1=Jackman |first1=Molly |last2=Kanerva |first2=Lauri |title=Evolving the IRB: Building Robust Review for Industry Research |journal=Washington and Lee Law Review Online |date=14 June 2016 |volume=72 |issue=3 |pages=442 |url=https://scholarlycommons.law.wlu.edu/wlulr-online/vol72/iss3/8 }} There are also policy debates around ethical issues regarding the integration of edtech (education technology) into K-12 education environment, as minor children are perceived to be most vulnerable segment of the entire population.{{cite journal |last1=Regan |first1=Priscilla M. |last2=Jesse |first2=Jolene |title=Ethical challenges of edtech, big data and personalized learning: twenty-first century student sorting and tracking |journal=Ethics and Information Technology |date=September 2019 |volume=21 |issue=3 |pages=167–179 |doi=10.1007/s10676-018-9492-2 |s2cid=54220346 }}
Technical limitations and challenges
Many social media companies have their respective differences definition and calculation methods of the active users metric. These differences often cause differences in the variable that the metric is measuring. Wyatt (2008){{cite journal |last1=Wyatt |first1=Anne |title=What financial and non-financial information on intangibles is value-relevant? A review of the evidence |journal=Accounting and Business Research |date=January 2008 |volume=38 |issue=3 |pages=217–256 |doi=10.1080/00014788.2008.9663336 |s2cid=219594306 }} argues that there is evidence that some metrics reported by social media companies do not appear to be reliable, as it requires categorical judgements, but is still value-relevant to financial statement users. Luft (2009){{cite journal |last1=Luft |first1=Joan |title=Nonfinancial Information and Accounting: A Reconsideration of Benefits and Challenges |journal=Accounting Horizons |date=1 September 2009 |volume=23 |issue=3 |pages=307–325 |doi=10.2308/acch.2009.23.3.307 }} conveyed that non-financial metric, like active users, there presents challenges in measurement accuracy and appropriateness in weighting when coupled with accounting reporting measures. There has been increasing notice from business presses and academia on corporate conventions of disclosure of these information.{{cite journal |last1=Cohen |first1=Jeffrey |last2=Holder-Webb |first2=Lori |last3=Nath |first3=Leda |last4=Wood |first4=David |title=Retail Investors' Perceptions of the Decision-Usefulness of Economic Performance, Governance, and Corporate Social Responsibility Disclosures |journal=Behavioral Research in Accounting |date=1 January 2011 |volume=23 |issue=1 |pages=109–129 |doi=10.2308/bria.2011.23.1.109 |s2cid=145264864 }}
Active users are calculated using the internal data of the specific company. Data is collected based on unique users performing specific actions which data collectors deem as a sign of activity. These actions include visiting the home or splash page of a website, logging in, commentating, uploading content, or similar actions which make use of the product. The number of people subscribed to a service may also be considered an active user for its duration. Each company has their own method of determining their number of active users, and many companies do not share specific details regarding how they calculate them. Some companies make changes to their calculation method over time. The specific action flagging users as active greatly impacts the quality of the data if it does not accurately reflect engagement with the product, resulting in misleading data.{{cite journal |last1=Park |first1=Patrick |last2=Macy |first2=Michael |title=The paradox of active users |journal=Big Data & Society |date=27 December 2015 |volume=2 |issue=2 |pages=205395171560616 |doi=10.1177/2053951715606164 |doi-access=free }} Basic actions such as logging into the product may not be an accurate representation of customer engagement and inflate the number of active users, while uploading content or commenting may be too specific for a product and under-represent user activity.
Weitz, Henry and Rosenthal (2014) suggested that factors that may affect accuracy of metrics like active users include issues relating to definition and calculation, circumstances of deceptive inflation, uncertainty specification and user-shared, duplicate or fake accounts. The authors describes Facebook monthly active users criterion as registered users past 30 days, have used the messenger, and took action to share content and activity differing from LinkedIn who uses registered members, page visits and views. For example, a customer who uses the Facebook once, to "comment" or "share content", may also be counted as an "active user".{{cite news |last1=Sorkin |first1=Andrew Ross |title=Those Millions on Facebook? Some May Not Actually Visit |url=https://dealbook.nytimes.com/2012/02/06/those-millions-on-facebook-some-may-not-actually-visit/ |work=DealBook |date=6 February 2012 }} A potential cause for these inaccuracies in measurement is the implemented Pay-for-Performance systems, that encourages desired behaviours, included high-performance work system.{{cite journal |last1=Jenkins |first1=G. Douglas Jr. |last2=Mitra |first2=Atul |last3=Gupta |first3=Nina |last4=Shaw |first4=Jason D. |title=Are financial incentives related to performance? A meta-analytic review of empirical research. |journal=Journal of Applied Psychology |date=1998 |volume=83 |issue=5 |pages=777–787 |doi=10.1037/0021-9010.83.5.777 |s2cid=55875563 }} In social media companies, active users is one of the crucial metric that measures the success of the product. Trueman, Wong, and Zhang (2000){{cite journal |last1=Trueman |first1=Brett |last2=Wong |first2=M. H. Franco |last3=Zhang |first3=Xiao-Jun |title=The Eyeballs Have It: Searching for the Value in Internet Stocks |journal=Journal of Accounting Research |date=2000 |volume=38 |pages=137–162 |doi=10.2307/2672912 |jstor=2672912 |citeseerx=10.1.1.195.103 }} have found that in most cases unique visitors and pageviews as a measurement of web-usage accounts for changes in stock prices, and net income in internet companies. Lazer, Lev and Livnat (2001){{cite journal |last1=Lazer |first1=Ron |last2=Lev |first2=Baruch |last3=Livnat |first3=Joshua |title=Internet Traffic and Portfolio Returns |journal=Financial Analysts Journal |date=May 2001 |volume=57 |issue=3 |pages=30–40 |doi=10.2469/faj.v57.n3.2448 |s2cid=153506314 }} found that more popular website generated greater stock returns, in their research analysis of traffic data of internet companies through the division of higher and lower than median traffic data. Yielding portfolio more returns may sway investors to vote on a more favourable bonus package for executive management. Kang, Lee and Na's (2010){{cite journal |last1=Kang |first1=Jun-Koo |last2=Lee |first2=Inmoo |last3=Na |first3=Hyun Seung |title=Economic shock, owner-manager incentives, and corporate restructuring: Evidence from the financial crisis in Korea |journal=Journal of Corporate Finance |date=June 2010 |volume=16 |issue=3 |pages=333–351 |doi=10.1016/j.jcorpfin.2009.12.001 |s2cid=153441435 }} research on the 2008 financial crisis highlights the importance of prevention of "expropriation incentives" of investors, that provides very prominent implications on corporate governance, especially during an economic shock.
Active user is limited in examining pre-adoption and post-adoption behaviours of users. Users commitment to a particular online product may also depend on trust and the alternatives quality.{{cite journal |last1=Li |first1=Dahui |last2=Browne |first2=Glenn J. |last3=Chau |first3=Patrick Y. K. |title=An Empirical Investigation of Web Site Use Using a Commitment-Based Model |journal=Decision Sciences |date=August 2006 |volume=37 |issue=3 |pages=427–444 |doi=10.1111/j.1540-5414.2006.00133.x }} Pre-adoption behaviour's effects on post-adoption behaviour, that is predicted by past research has suggested,{{cite journal |last1=Kim |first1=Sung S. |last2=Malhotra |first2=Naresh K. |title=Predicting System Usage from Intention and Past Use: Scale Issues in the Predictors |journal=Decision Sciences |date=February 2005 |volume=36 |issue=1 |pages=187–196 |doi=10.1111/j.1540-5915.2005.00070.x }} is found to have associations with factors such as habit, gender and some other socio-cultural demographics.{{cite journal |last1=Venkatesh |first1=Viswanath |last2=Morris |first2=Michael G. |last3=Davis |first3=Gordon B. |last4=Davis |first4=Fred D. |title=User Acceptance of Information Technology: Toward a Unified View |journal=MIS Quarterly |date=2003 |volume=27 |issue=3 |pages=425–478 |doi=10.2307/30036540 |jstor=30036540 |s2cid=14435677 }} Buchanan and Gillies (1990){{cite journal |last1=Buchanan |first1=Robin W.T. |last2=Gillies |first2=Crawford S. |title=Value managed relationships: The key to customer retention and profitability |journal=European Management Journal |date=December 1990 |volume=8 |issue=4 |pages=523–526 |doi=10.1016/0263-2373(90)90115-M }} and Reichheld and Schefter (2000){{cite journal |id={{ProQuest|227807543}} |last1=Reichheld |first1=Frederick F |last2=Schefter |first2=Phil |title=E-loyalty: Your secret weapon on the Web |journal=Harvard Business Review |volume=78 |issue=4 |year=2000 |pages=105–113 }} argues that post-adoption behaviours and continuous usage is "relatively more important than first-time or initial usage" as it shows "the degree of consumer loyalty", and that ultimately produces long term product value.