Marketing mobile apps is a big business for Facebook . In fact, Facebook’s unique ability to deliver ads to people that will get them to download mobile games on their phones has been a huge driver of Facebook’s overall mobile ad revenue explosion.
So earlier this year, when Facebook rolled out a mobile ad network, providing app developers a new outlet to push their apps to consumers outside of Facebook, many saw a golden opportunity.
Then the early results came in, and many developers encountered low response rates when marketing their apps on other mobile apps, i.e. apps that weren’t Facebook, said Craig Palli, chief strategy officer at the mobile marketing firm Fiksu.
But Mr. Palli argues that Facebook’s mobile network–while delivering lower click-through rates for advertisers–actually provides a significantly better return on investment for app developers, according to new research conducted by Fiksu.
In conjunction with Facebook, Fiksu examined eight different mobile app ad campaigns, including one conducted by a major retailer and a game developer (mobile games apps represent a huge ad category). Overall, Fiksu found that mobile app ads on Facebook averaged click-through rates of 1.16%, while similar ads on Facebook’s mobile ad network generated click-rates of just .34%
However, while the response rates were lower for the ad network, the conversion rate was much higher–26.28% for the ad network, versus 16.61% for ads on Facebook, Fiksu found.
Even more noteworthy, reported Fiksu, was that the average revenue generated per user from Facebook’s network ads was considerably higher than ads on Facebook’s own mobile app: $3.64 on average versus $1.63 respectively.
Essentially, Fiksu found that mobile app ads on Facebook don’t get as many people to respond, but those that do are more valuable to app developers over time (e.g. these people shop more on these mobile apps, or buy more virtual goods in these mobile games, etc).
“When Facebook launched the network it was the great unknown,” said Mr. Palli. “They had to prove that people are as wiling to engage with ads like they are in the Facebook app, where you are doing some social free time activity and Facebook controlled the experience. And what we’ve found is that you have to look at the full picture [when evaluating Facebook's ad network]. “The measures needed to reach people may be higher but those you reach are more engaged.”
The Wall Street Journal
Mr. Palli said that it’s crucial for more app marketers to dig deeper into Facebook’s data when evaluating their ad efforts. He’s encouraged Facebook to make more data accessible.
“The reports we make available surface information to publishers to help them better monetize their apps, and to marketers to help them drive real business results,” said Sriram Krishnan, product manager, Facebook. “Our analytics at this time are pretty in-depth, but we’re always exploring ways we can provide more value to our partners.” –