More than 4,000 app developers will descend on San Jose, Calif., on April 18 and 19 for Facebook’s F8 conference, where, if you believe the rumor mill, Mark Zuckerberg will regale them with splashy announcements about group chatbots for Messenger and possible hardware offerings from his secretive Building 8 Lab.
But at its core, F8 is a show for developers, a place where app publishers can nerd out on the nitty-gritty, like marketing APIs, monetization, growth marketing and, of course, app-install ads.
Despite recent efforts by Snapchat and Pinterest to cut themselves a sliver of the app-install pie, Facebook continues to gobble up most app-install ad spend.
The reasons are simple: data and scale.
That’s a tough combo to beat, said Michael Oiknine, CEO of mobile attribution company Apsalar, a Facebook marketing partner.
“They lead because they have the best data, they have almost no data leakage and they understand the industry and how it’s changing, and then deliver products and sales efforts that reflect those changes,” said Oiknine, who also pointed to Facebook’s growing focus on post-install engagement marketing.
Five years after its release, Facebook is still investing in its app-install product, especially via Audience Network, a major growth area for Facebook as ad load maxes out in the news feed. In December, Facebook launched dynamic ads and event optimization for mobile app installs through Audience Network, which allows advertisers to target users with dynamic app-install ads based on recent product browsing history.
A report from Citi estimated that mobile app-install advertising accounted for 17% – or $2.9 billion – of Facebook’s total ad revenue in 2015. Assuming Citi’s approximated percentage held last year, mobile app-install ads would top $4.4 billion in 2016.
Clearly, the developer dollars are still flowing. Spend on Facebook dynamic ads, including mobile app-install formats, increased 164% between Q4 2015 and Q4 2016 across Facebook desktop, mobile and Audience Network, according to Nanigans, another Facebook marketing partner.
Game developer Glu Mobile, responsible for a slew of popular celebrity-inspired titles, including “Kim Kardashian: Hollywood” and “Nicki Minaj: The Empire,” continues to allocate “a large share” of its total marketing budget to app install ads on Facebook and Instagram, said CRO Chris Akhavan.
“Developers want access to the tremendous amount of data that Facebook has on the audiences we are trying to reach,” Akhavan said. “Nobody is currently matching Facebook’s targeting capabilities.”
It’s in Facebook’s own best interest to keep developers happy, especially as competitors wait in the wings to court them. In early April, for example, Snapchat rolled out interest-based targeting for app-install ads, the latest volley in a not-so-cold war with Facebook, which isn’t hiding its bloodlust to make mincemeat of its rival.
And Facebook could, indeed, do a few things to make life easier for the app publishers advertising on its platform, said Tony Vartanian, co-founder of Lucktastic, a free sweepstakes app developed by Jump Ramp Games.
For one, until recently, buying mechanisms for app-install ads on Facebook weren’t as “sophisticated” as Vartanian and his acquisition team wanted.
“You had to go through outside partners,” he said.
But, for the past three months, Lucktastic has been using new features within Power Editor, the far more souped-up professional version of Facebook’s Ads Manager, which lets marketers do bulk editing and have more end-to-end control over their campaigns.
If Lucktastic had Facebook’s ear, though, it would also ask for an easier way to understand the impact of particular inventory types.
“For instance, right now we could put half of our inventory into display and half in video, but we really wouldn’t know the specific outcome,” Vartanian said. “Facebook needs more transparency and options when it comes to splitting inventory.”
Retargeting and reactivation are also a black box, in terms of data exposure for marketers.
“Our team would like to see better tools and a more focused offering in this area,” said Vartanian, who noted that although Lucktastic still runs quite a lot of app-install ads through Facebook, it’s been diversifying its spend with an ever-increasing focus on video inventory.
But the fact is that it’s Facebook’s platform and, therefore, Facebook’s rules.
“Just like any social network, you’re limited by the features within the platform,” said Zbigniew Barwicz, CEO and president of shoppable video creator app dubdub. “With Facebook, you’re able to reach mass audiences in whatever vertical you’re interested in, but you’re still limited on the types of ad creative you can push out and the experience that Facebook provides.”
Regardless, app-install spend on Facebook is prodigious, and new types of advertisers are also starting to take advantage, said Moshe Vaknin, CEO and co-founder of mobile ad network YouAppi.
“Facebook is still very effective as a source for app installs for developers and to help sell ads,” Vaknin said. “We’re seeing more mainstream apps and the mobile versions of offline retailers spending more on Facebook, [and] app developers are getting better and more professional regarding their use of Facebook.”
It’s unclear, however, whether Facebook’s performance is better through the core Facebook app or Audience Network. Facebook doesn’t share performance metrics between the two. In fact, its marketing partners sign a nondisclosure agreement promising not to divulge that information.
But it stands to reason that Facebook’s owned-and-operated properties perform better because Facebook controls the news feed user experience, and a better user experience usually means better engagement.