• by Craig Palli , July 1, 2013

As the mobile app marketing landscape evolves at lightning speed, I’m reminded how important it is for marketers to constantly assess new ways to identify and reach their most loyal customers.

Savvy app marketers already know two things:

-          Betting too heavily on any one or two mobile advertising methods is risky.

-          Testing new advertising options and quickly capitalizing on those that work is a smart way to stay ahead of the competition.

I recently took the time to analyze the performance of a few early Facebook mobile app install ad campaigns to assess how they worked and the early ROI. Here’s what I discovered:

What is it?

Facebook’s mobile app install ad is a new ad unit that can both diversify an app marketer’s traffic mix and help them stay on top of a new source of loyal users. When used correctly, these app ads can serve as a powerful element in a balanced media mix to reach loyal users. Mobile app install ads display in a user's news feed on mobile devices, and allow advertisers to drive users directly to an app's install page in the app store, which is optimal for conversion.

Facebook has harnessed the power of its social network with discrete, actionable audience customization elements. The ad unit is tailored for app promotion, but the real power comes from the extensive options for refining the audience. You can draw on a long list of demographic and behavioral characteristics to choose who sees your ad including location, age, gender, new job, interests, and more -- even Facebook presence.

That last option is worth some explanation. Marketing to your existing fans may seem redundant, but it's a great opportunity to efficiently remarket to existing customers. Using this tactic, you can migrate those customers to your mobile app to extend your brand functionality, and simultaneously, prevent competitors from claiming them in the mobile sphere.

I found that this remarketing tactic can be very affordable, too: data for one app marketer showed a cost per install (CPI) more than 50 percent less than their next-best-performing segment when marketing to their existing Facebook fans.

The key to success of any of these marketing measures is integrating the Facebook SDK, or working with a partner who has it integrated into their product. SDK integration allows you track actual conversions and the loyal usage events that drive your monetization.

Comparing results

Typically, app advertisers running optimized campaigns are seeing good to great results using this channel, as data analyzed from several recent campaigns shows:

• Click Through Rates (CTR): Average CTRs are approximately twice as high as other networks, and conversion rates are even better.
• Loyalty: Loyalty stats for Facebook users are similar to those on the best-performing mobile networks.
• Volume: For any given CPI, Facebook can provide higher volume than most comparable ad networks.

However, it’s worth noting that these exceptional CTRs and loyalty rates might not be permanent: in many new forms of advertising, response rates decay over time. The key to offsetting this is to optimize your results at a faster rate than the decay.

In general, CPIs for mobile app install ads are about 20 percent lower than the top performing ad networks. It's not the cheapest network in CPI terms – but it may be the cheapest source of loyal users for advertisers who can manage the ongoing optimization.

In one recent campaign I analyzed, a major app publisher drove tens of thousands of conversions in a short period of time at a CPI of $2.49 – a solid improvement over the $3 to $4 CPI they typically see on other comparable ad networks. For this app publisher, Facebook has become one of their top five cheapest networks – with dependable volume.

Of course, no two apps are alike, and driving cost-efficient user acquisition depends on a number of variables. Remember that every app has its own personality, and some are more suited for particular traffic sources than others. The bottom line is that the combination of extensive capabilities for focusing on specific audiences, the massive volume potential, and the results other apps have seen essentially mandate that any serious app marketer at least test this Facebook ad unit.

Additional tips?

-          Go big. The 600 x 360 banner outperforms the default.

-          Creative matters. Design a banner that conveys your app's value proposition or unique selling point.

-          Keep it brief. Don’t worry much about perfecting the supporting text that goes along with the image. While the text will also affect your results, the impact is less than 10 percent overall.

-          Keep it fresh. As with any advertising, there is a saturation factor for any particular ad -- that factor may be amplified using Facebook. Refresh your creative every two weeks or so to keep performance up.

-          ABO: Always be optimizing. Reaching peak performance requires constant optimization of your ad campaigns. Make sure you have the resources – or a qualified partner – to manage this optimization.