Although Facebook doesn’t break out its app-install ad revenue, industry sources estimate it represents somewhere between 10% and 20% of total revenue, which makes it a likely multibillion-dollar business.
A lot of the app-install ad demand comes from game developers – and they’ve got the cash to spend, as evidenced by the fact that several are also spending on high-profile TV campaigns – but travel and ecommerce companies are also taking advantage, De Martini said.
Hotels.com, for example, has been experimenting with dynamic app ads to drive installs, which it uses to find people who are in the planning phase for upcoming travel. The travel booking site has seen lower user acquisition costs with the format compared to static retargeting campaigns.
Based on last year’s F8 conference, Facebook’s long-term vision is predicated on the notion of a post-app world in which messaging apps are the future hub of all things, in a sense removing the need to even download an app at all.
But in the meantime, app-install ads remain a monetization workhorse for developers and a cash cow for Facebook.
“We’re still seeing momentum in the app market,” De Martini said. “And it’s important to think about producing the right tools and services for now so that businesses can connect to consumers where it makes the most sense.”