• by Mark Walsh  @markfwal, January 7, 2013

Ads that Facebook introduced allowing developers to promote applications in the mobile news feed continue to show early promise, according to Facebook ad partner AdParlor.

The social network began testing app install ads in August and extended the format widely to iOS and Android developers in October. When people click on the ads, they will be sent to the App Store or Google Play to download an app, depending on what device they own.

In October, Facebook said beta partners like Kabam, Fab, TinyCo and Big Fish were able to reach a more relevant audience and efficiently drive installs. TinyCo, for instance, had seen 50% higher CTRs and higher conversion rates compared to their current mobile channels as well as a significant increase in player engagement, according to Facebook.

AdParlor on Monday said the app install ads had an average click-through rate of 0.5%, and sometimes higher by vertical, during November and December. That’s far higher than the CTR of .072% for Facebook ads that run on the desktop on the right side of the page, and roughly on par with the rate for ads running in the desktop news feed (0.485%), according to data collected by AdParlor in September.

But the click rate for app install ads is still only half the 1% rate for Sponsored Story ads in the mobile news feed. The 0.5% rate is also down from the 1% to 2% rate AdParlor initially reported for app install ads in October, following the beta period.

AdParlor also highlighted results from a four-week campaign for a large global gaming company using app install ads to drive players to its iOS app. Delivering more than 10 million impressions and thousands of installs, the company tracked conversions and optimized toward the most effective cost-per-install in real-time.

The cost ranged from a low of $2.24 in Sweden to a high of $2.88 in Norway, with a CPI of $2.24 in the U.S. Mobile app marketing firm Fiksu, which tracks the cost to acquire returning users for iOS apps, reported that this cost rose to $1.38 per user in November from $1.06 the prior month.

The app install ads are part of Facebook’s broader push to monetize its mobile audience of 600 million users, along with extending formats like Sponsored Stories and page posts to mobile devices. In the third quarter, the company reported $150 million in in mobile ad revenue, up from only about $10 million the prior quarter.

In a research report today, Brian Wieser, senior analyst at Pivotal Research Group, projects Facebook will generate about $1 billion this year in revenue from mobile ad products. With the overall expansion of mobile ad spending, AdParlor CEO Hussein Fazal said he expects Facebook to be a key part of the marketing mix for all mobile app developers.