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According to a new report by eMarketer, mobile ad spending in the United States grew an incredible 178% last year. And a huge part of this was with thanks to Facebook.
With no mobile ad revenues until mid-2012, the company surged to capture more than $390 million worth in the US by year-end. This represented more than 21% of all US mobile display ad revenues, skyrocketing Facebook ahead of veterans like Google, Apple and Millennial Media. The gap between Facebook at #1 and Google at #2 in mobile display ads is expected to widen in 2013, with eMarketer projecting Facebook to grab three out of every $10 spent on mobile display ads this year.
Why have advertisers been so quick to adopt Facebook mobile ads?
The massive scale of its high quality, engaged audience is a major reason, along with its slew of compelling mobile ad products. Adoption of Facebook mobile ads has been especially strong with mobile developers aiming to drive discovery and installation of their apps, as Facebook released an ad unit designed specifically to meet their needs in the fall of 2012 — mobile app install ads. In fact, at GDC last week, Facebook shared that in the last month alone it has driven more than 263 million visits on behalf of app developers to the Apple App Store and Google Play.
Another reason is the unmatched targeting options that Facebook has brought to mobile, encompassing everything from geography and device to specific demographics, psychographics and behaviors. Ever adding to this arsenal of mobile targeting options, last week Facebook broadly released two new targeting options for mobile app developers in particular: operating system version targeting and wifi targeting. An overview of these along with early adoption and performance data is included below:
Different mobile operating systems provide developers a variety of capabilities when building their mobile apps. And not all apps necessarily work similarly and seamlessly across all operating systems. Operating system diversity isn’t just at the highest level in terms of Google’s Android or Apple’s iOS; capabilities change and evolve from one version of an operating system’s release to the next. Apple’s release this past September of iOS 6, for example, equipped developers with 200 new features, including deep Facebook integration.
What does this have to do with mobile advertising?
Control and relevancy. When driving discovery and distribution of a mobile app, developers should consider limiting targeting to reach people with operating systems compatible with their app functionality, as much as they should consider how ad creative and messaging may resonate differently with people using one operating system version as opposed to another. Mobile app developers now have this control and relevancy when advertising on Facebook mobile.
Developers can reach people with the specific operating system versions their apps are built for and exclude reaching, for example, people using earlier versions that their app may not support. Mobile app developers also now have the flexibility to employ and test different messaging based on what’s most relevant to the people using these diverse operating systems.
Facebook also broadly released wifi targeting last week — compelling to mobile app developers for a couple of key reasons.
When people are connected to the internet on their mobile devices via wifi as opposed to through their mobile carrier, it suggests they’re not completely on-the-go and instead perhaps at home, work or someplace like a coffee shop. Seemingly, these people are then more likely to be spending longer periods of time on their mobile devices, and thus then also more likely to install an app to shop, play or otherwise use it.
Mobile apps greater than 50 megabytes in size require wifi connectivity in order to install them onto a mobile device. This matters when it comes to advertising apps of this size. If someone is directed to download the app and cannot connect to wifi, the conversion funnel requires an additional step on behalf of the user to then connect to wifi. This added step may deter some altogether from immediately installing the app. In this scenario, the advertiser then pays for the click, but cannot necessarily attribute an install to the spend.
Thanks to Facebook broadly releasing wifi targeting last week, advertisers can now capitalize on both scenarios– be it to catch people in the mindset of spending more time on their mobile device than quickly checking updates, or be it to ensure a seamless conversion funnel.
In terms of advertiser adoption and ad spend distribution, the vast majority of mobile app developers advertising through Nanigans’ software are targeting the umbrella operating system (e.g., iOS vs. Android) as opposed to specific versions. Given version targeting was announced publicly just last week, this is not alarming and we expect adoption to increase in coming months.
For those testing version targeting for iOS, advertisers are most frequently allocating spend to iOS 4.3 and above or iOS 6.0 and above (and to a lesser degree iOS 5.0 and above). For Android, advertisers are most frequently targeting Android 2.2 and above or Android 4.0 and above (and to a lesser degree Android 2.1 and above).
From a performance perspective in the last two weeks, mobile app developers are seeing higher costs to advertise on iOS than Android. Android versions are averaging 36% lower CPCs and 47% higher CTRs than iOS versions. At the more specific version level, advertisers are seeing higher CPCs when targeting newer iOS versions; however, this trend is not occurring between older and newer operating systems.
While wifi targeting also has limited adoption given how recently it was announced, early performance suggests this targeting strategy will be slightly more expensive. CPCs across campaigns are currently 30% higher than the overall average for mobile app install ads. This makes sense given a smaller subset of mobile users have wifi connectivity than those connected through their wireless carrier.
Announcement of both these enhanced targeting options can be found here on Facebook’s developer blog, which features several success stories around mobile app install ads – including a case study from the team here at Nanigans.
To make the most of these enhanced mobile targeting options with your mobile app today, contact us!