In October, Facebook began leveraging the enormous popularity of its mobile apps to advertise other apps. The mobile ads for apps, which run in users’ news feeds and direct them to app install pages appropriate for their devices, help mobile developers distinguish their products from the nearly 2 million apps in the Apple and Google Play app stores and help Facebook ramp up mobile revenue, which at the time of their launch was non-existent. According to the latest numbers, the setup is working out swimmingly for the social network and its advertisers.
Between April and June, 8,400 advertisers purchased Facebook’s mobile app install ads, compared to 3,800 advertisers the previous quarter, Facebook product manager Deborah Liu tells Fast Company. During the same period, the ads drove 46 million app downloads, an increase from 25 million.
Liu says about 50% of the top 100 grossing apps in the Apple App Store and Google Play Store use the product. “Developers come to us and say, ‘This is exactly what we were looking for,'” says Liu. “This is the kind of thing that all startups and all companies need. App discovery is such a big problem.”
Fiksu, a company that helps automate mobile app advertising campaigns, tells Fast Company that Facebook app install ads have been so efficient that they cut its costs for acquiring a new user by 15% to 60% compared to other ad options.
There has been some concern (and some evidence), that the price of app install ads will rise as demand for them increases, but Liu says that isn’t necessarily the case. “We’re showing fewer apps to people and giving better recommendations to people over time,” she says. “And obviously the fewer impressions we’re using for a specific app install, the better the whole system works, and the prices actually go down.”
Update: An earlier version of this article included Tapjoy, FreeMyApps and SponsorPay, which compensate users with perks like free game credits in exchange for downloading apps, in Fiksu’s cost comparison with Facebook mobile install ads. They are not included.
[Image: Flickr user Geir Tønnessen]