In Facebook’s latest earnings call, after reporting a first quarter in which it generated $1.3bn in mobile advertising revenue (59 per cent of the total posted), the social network said its mobile app install ads were among its best performing products, driving 350 million app installs to date. More than 60 per cent of the top grossing apps on the Apple App Store and Google Play have invested in Facebook app install ads – an impressive performance for a product that only launched in January last year.
Facebook CEO Mark Zuckerberg added that the site is also seeing more diversity in the customers on mobile than it saw on desktop with its Canvas formats – which were dominated by games developers – as more types of brands explore using app install ads.
The solid performance of Facebook’s mobile app install ads in a short space of time put paid to the reasons why digital ad sector rivals Twitter and Google also recently announced the launch of their own versions of the performance-based format across their portfolios.
First off the starting blocks was Twitter on 17 April, announcing a suite of targeting, creative and measurement tools to enable its clients to promote their mobile apps across Twitter and through the thousands of mobile apps that use MoPub’s mobile advertising exchange. Twitter acquired MoPub, the mobile automated ad marketplace, in September 2013.
Google soon followed by announcing it was to enhance app install ads across its search results and extend them to YouTube, allowing brands and app developers target users based on the apps they have already downloaded.
Using app install ads for retention
This means an advertiser like Hotels.com, for example, can provide a utility and not only get a user back into using their app – as the typical direct response app install ad would play out – but also cut down the clicks it takes from search for a consumer to book a hotel, Howe explains.
Ultimately, the biggest opportunity in the three of the biggest digital media players offering mobile app install ads is scale, according to OMD UK’s head of mobile Milton Elias, who says while Apple and Google never reveal the secrets behind their app store algorithms, it is clear that more downloads drive ranking and visibility inside the stores.
Improving the overall customer experience through an app
But the growing opportunity social offers with this nascent format beyond the numbers game is to overlay targeting to add to the overall customer experience rather than just trying to drive installs as per the big mobile gaming companies, Elias says.
On Twitter for example, you can target a user based on what they have previously tweeted about – giving a brand like Starbucks the perfect opportunity to serve a consumer who has previously tweeted about coffee with an app install ad and a promotion to use in-store, Elias explains.
Another key difference with Twitter’s install ad format is its “download” button, which means users call install an app with one click – cutting out extra stages that could irritate a consumer into changing their mind.
Google will also be able to offer marketers “highly effective targeting capabilities” with its app install product because it has a wealth of app information from its Google Play Store, according to Simon Mansell, CEO of TBG Digital.
He adds: “With the mobile app deep linking initiative which integrates AdWords, this should offer marketers highly effective targeting capabilities from within search.”
Getting in early with Google and Twitter could prove cost effective
A benefit to trialling Google’s and Twitter’s install app offerings early could be competitive pricing compared with Facebook. Data seen by Marketing Week from one ad buyer suggests the cost per install of Facebook’s mobile app install format has rocketed, to almost double what it was previously for some advertisers, since 4 March when the social network implemented changes to its algorithm across its platform.
Those changes also coincided with a “bug” that saw a marked delivery drop in ad reach across the platform. That bug has now been resolved, but sources familiar with the matter tell Marketing Week that the algorithm changes – which have also seen Facebook Pages’ organic reach plummet – compounded with more competition in the sector has meant the pricing of Facebook app install ads has continued to increase.
“Everyone is trying to bid higher to get anywhere near the same traffic as before. It’s like chasing waterfalls,” one source said.
Facebook is also rumoured to be announcing the launch of its own mobile ad network today, which will allow it to place ads across the mobile web beyond its own site and possibly place even more of a premium on its mobile inventory. Twitter and Google could take advantage by undercutting Facebook on app install ad pricing in the short-term – providing a clear incentive for marketers to test other app install formats.
Gaming companies are spending “many millions” of dollars per month on mobile app install ads, mobile app marketing company Fisku’s chief strategy officer Craig Palli recently told the Wall Street Journal. But with the more inventory flooding the market thanks to Google and Twitter and the layer of socially-driven targeting the format provides across the different platforms, household name brands could soon be driving the market’s growth even further.