Facebook Mobile App Install Ads Capture Revenue, Drive Installs

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mobile-app1With so many mobile apps in the marketplace, app discovery is more competitive than ever. The race to get apps in front of people has turned ad installs into a lucrative market. Combined with a huge mobile user base, Facebook’s Mobile App Install ads have emerged as a star ad product for the company. Approximately 3,800 clients used the Install ads to drive more than 25 million installs in the Apple App Store and Google Play in Q1 2013, according to Facebook. In addition, 40% of the top 100 iOS and Android app developers bought Install ads in the last week of Q1.

Introduced in October 2012, the Mobile App Install ads were among the few ad products that remained standing after the company announced plans to overhaul its ad offerings. The Install ads, which appear in a user’s News Feed, include the name of the app, an image, a short description and an “Install Now” button that directs consumers to the app’s page in Google Play or Apple’s App Store.

As part of its simplification efforts, Facebook recently made it easier for app developers to post their Install ads on Facebook. Instead of registering the app with Facebook, developers just need to enter a link to the app on Apple’s App Store or Google Play. From there they can choose their target audience and set their budget to activate the ad.

One of the key benefits of the Install ads is the targeting features, noted Adam Grenier, director of mobile marketing at Hotel Tonight, an app that drives last-minute hotel reservations. “What’s cool with Facebook is it’s getting a lot more granular in terms of rich targets and different profiles of the people you’re putting the ads in front of,” Grenier said. “It allows me to be much more aggressive when I know it’s an audience that might turn into revenue at a better rate.”

Although Hotel Tonight prefers that customers begin using the app the minute they download it, many will access the app at a later date. Therefore, “it’s more about finding people who show a high intent of possibly booking a room,” Grenier explained. One example is an ad for avid golfers. Using Facebook’s platform, Hotel Tonight can identify groups of users who like golf courses or discuss golf-related topics on their wall. Based on that knowledge, Hotel Tonight could create an Install ad featuring a golf resort that will show up on those users’ News Feeds. Grenier estimates that his company targets roughly one thousand different audiences on Facebook at any given time.

“We try to focus on the ones that might have either a personal passion, like golf, or people who have trends that might fit in the profile of a frequent traveler,” Grenier said.

In terms of conversion rates, the click-to-install rate from the Install ads is 10 times higher on average than a standard banner ad. The cost-per-install of each Install ad is also 20% to 30% lower than banner ads. “An average install ad on Facebook might be $1.50 to $2.50 whereas the greater environment of banner ads might be $3 to $4 or even higher depending on the quality,” Grenier commented. “There are other places where you can drive $1 installs but those are usually really bad installs.” Other platforms that Hotel Tonight uses to drive installs include Pandora, Google AdWords and Drawbridge.

Being able to compete with larger mobile developers is critical for the three-year-old company. Large enterprises like Zynga “are spending 7 to 8 figures a month just on install ads, which can make it harder for companies that don’t have those types of resources,” Grenier noted. “There’s still a lot of inventory out there, though, so we’re not going to be pushed out by the people who spend a lot of money.”

The ability to target specific types of Facebook users makes Install ads extremely useful, agrees Maria Morales, senior marketing manager at the mobile-only marketplace Poshmark where users can buy and sell clothing from each other.

“We’re able to run multiple campaigns and target specific users based on their age, their interests, the brands they like, where they are in the US and we’re able to change that on an as needed basis,” Morales noted. The social nature of Facebook users also made the platform an ideal fit for the two-year-old startup. “Going into this, we expected the users we would get [from the Install ads] to be very engaged and our results have proved this,” Morales said. “The users post things and share items with their friends, which is great.”

While Morales declined to go into specifics, the company has seen ROI stats from Install ads on Facebook that were three times higher than other ad platforms and the acquisition costs were 30% lower than with other platforms. Poshmark also drives installs through Google, Pandora and a host of various ad networks.

In terms of improvements, Morales said she and her team are “always looking for more information about individual ads and how they’re performing.”

Hotel Tonight’s Grenier would like Facebook to make the Install ads “more social.” “One of the key things we’ve pointed out is that the Install ads don’t have a lot of social functionalities,” Grenier said. “That’s one of the benefits with Facebook Ad Units, that people can like, share and comment on them. But the only action you can take with an Install ad is to install it and if someone likes an app, they might want to share that ad with other people, which could lead to viral likes or clicks.”

As for best practices, Morales advises, “remember that you can add and change as many campaigns as you want, so test lots of different copy and images, do A/B testing and monitor everything closely.”

Grenier agrees. “Don’t go in and just do one ad,” he said. “The benefit of Facebook is you can work with so many different types of targets and audiences and the more you test, the more likely you’ll be able to find pockets that perform well for your application.”

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