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Facebook App Install Advertising is Working

Posted By PlacePlay on January 11, 2013

In this weeks App Developer Conversations, Ryan Morel of PlacePlay, Robi Ganguly of Apptentive, and Ian Sefferman of MobileDevHQ talk about app developers early successes utilizing Facebook’s app install advertising, and whether or not the trend can continue. Ryan, Ian, and Robi also discuss eBay’s move away from in-app advertising, and how developers need to think about the monetization strategy that best suits their content.

Watch the video here, or read the transcript below.

Make sure to check out this weeks other segments:

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[youtube=http://youtu.be/ada3VNbU05o&w=427&h=240]

 

Ryan: Hi. Welcome to our New Year installment of App Developer conversations. As always, I’m here with Robi Ganguly, of Apptentive; and Ian Sefferman, of MobileDevHQ. How are you guys doing?

Robi: Great.

Ryan: Good. We’ve had a couple good segments so far of the numbers that we’ve seen come out in the New Year. There’s been a couple of other pieces of interesting news that we thought worthwhile.

First was, eBay came out and said they’re removing ads from their apps. I think the first reaction would maybe be, “Mobile advertising doesn’t work.” Maybe the right reaction is, “It doesn’t work for eBay.” I think it brings up a bigger point of how should app developers be thinking of the right monetization strategy? Maybe you want to start us off.

Robi: I think what eBay said when they talked about it, which says to me, “You should be thinking about this in a lot of different categories.” Our primary user scenario is for somebody to come and look to buy some things from other eBay sellers, essentially, and distracting them. Potentially taking them out of the app is actually a negative cost. That’s a cost for us; that’s bad for business. It seems to me like a lot of publishers need to be thinking about how they’re making money and if ads are their competition for their primary source of revenue.

Ian: I’ll make that a little bit more nuanced which is, when I was at Amazon, Amazon introduced ads on product detail pages. Everybody was like, “Why the hell would you send people away from the detail page?” It was interesting because it actually a profitable endeavor for them, because Amazon had such weight toward all of their pages, that whenever anybody talks about a product, where do they link? They link to Amazon. Obviously, Google rates Amazon super-highly, so you’re going to get all the good Google juice out of it.

Not everybody who hit those pages directly actually wanted that particular product. A low conversion rate with ad in there made sense for them. Where I think it falls down in the eBay situation is they didn’t think about the fact that the form factor is smaller. People aren’t randomly finding their way to a detail page in the mobile app; that doesn’t happen because of the way that it works. eBay probably had good intentions, but didn’t think about the nuance view of the world, and how different things are affecting that.

Ryan: I would say for app developers, and I think we talked about this a little bit before, because we’re not that far away from being at the point where we can understand up front, who’s going to buy and who’s not. If you can instrument that into your advertising, then that makes sense. It’s clear, as you said, if your main goal is to get someone to stay in your app for as long as possible, then giving them exit option at $0.05 a click isn’t worth it.

Robi: No, not at all.

Ryan: The second thing we saw is a couple people coming out and saying, “Facebook mobile install ads are actually working really well.” It sounds like the conversion tracking isn’t necessarily working for everybody, but that’ll get fixed. It sounds like people are seeing some $2 CPIs. Obviously, a good thing as prices go up, but I think the big question is; what are the factors that will affect whether or not that lasts?

Robi: I think it’s a matter of them going out and telling this story. I’m pretty sure the Facebook is helping the story about it being cheap circulate, and if that gets circulated broad enough, there are enough aggressive developers out there, the prices are going to naturally start to trend towards the other places, I would imagine.

Ian: Interestingly, I already feel as Facebook user that there’s too many ads on mobile app. They ramped that up pretty darn quickly and it’s getting to be a little distraction. I think that helps them on a CPI basis, because certainly, artificially lowering the supply is going to increase price, but I don’t know if that ends up being a net positive to developers.

Ryan: It feels like a really short-term opportunity. Where not everybody is doing it yet and not everyone’s annoyed. It sounds like if you’re going to do it, do it now.

Ian: Do it now, right.

Ryan: We talked a little bit about this in your segment, I think. There’s now opportunities to target advertising based on people’s interests. Instead of targeting everybody on Facebook, you can go out and target someone who is interested in dogs, for example, and that immediately makes it a little more expensive, but you get a qualified user.

Ian: Right. Yes.

Ryan: Any other new things you guys saw from an app marketing perspective, over the last couple of weeks?

Ian: I thought that ChartBoost was interesting. There’s actually an article right here on it. It was $19 million from Sequoia in a Series B. That’s a big raise. They must be showing some serious traction, what to me, amounts to basically being the old-school circle ads.

Ryan: It’s a huge number. I think they’ve clearly reached the point where they’ve got the network effect. Now their numbers are just going to go way up. Great for them, and it’s good for people like us. If someone else can do it, great.

Robi: Right. Seeing Sequoia come in and play in the space is nice. Historically, some of the traditional heavyweights in the venture capital business have been leaning back on investing in the space, aside from advertising. Seeing them come in, maybe take a little bit more of an interesting approach. ChartBoost is definitely a little bit of a different company. I think that’s good.

Ryan: I think this is maybe an interesting topic. What happened to the I-Fund and the S-Fund? Do you remember those?

Ian: I think you can still invest out of the I-Fund, actually. I wasn’t that worried about that fund.

Robi: It was a $10 million fund, I think.

Ryan: I think it was 100.

Robi: What?

Ian: I think it was 100. Still, we’re already like 3 or 4 years into the I-Fund. I’m surprised that a capital has not deployed.

Ryan: Congratulations ChartBoost; fantastic. I think that’s it. Thanks for watching. Make sure like this video and subscribe to our channel. Check out Robi and Ian’s segments.

By Ryan Morel

info@placeplay.com

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