Facebook is realizing solid revenue from the rapid acceleration of the mobile app economy. With over 1.5 million apps across the Apple and Google Play app stores, Facebook's app install ads are sure to be a growing source of revenue for the company.
Facebook app install ads were the star of Facebook’s earnings call today. Sheryl Sandberg said 3800 developers used the ads to drive over 25 million installs. 40% of the top 100 iOS and Android app developers bought these ads in the last week of Q1 alone. Mark Zuckerberg meanwhile said, “We’re starting to see real revenue from selling mobile app installs.”
Since native app stores function as walled gardens, Facebook has created a solution that offers solid dividends for apps publishers. Given the growing number of Facebook mobile users, app ads within users' news feeds provide a seamless on boarding process.
Even though the apps recommended to users aren't always the best fit, it's still a highly relevant category to Facebook's mobile user base. As evidenced by the product's early success, it appears that users would much rather see ads for mobile apps than services not strongly correlated to mobile.
With the growth of Facebook app install ads, I would caution the company from being too aggressive with the product. These ads are best in moderation. In order to provide the best value to app publishers and Facebook users, the company needs to ensure that it's suggesting apps relevant to a user's behavior.
I think Facebook would be well served in creating a solution that offers a mix of curated and sponsored apps. This way the company would ensure that growth of the app install ad unit won't cannibalize user engagement.
In this vein, Facebook may be best suited purchasing an app discovery solution like Hubbl or App Flow. Hubbl, for example, delivers app recommendations based upon an app relevance engine that use micro-contextual and behavioral targeting. Sounds like a nice fit with Facebook's growing mobile app install ad business.
Labels: apps, facebook, mobile