Facebook is set to announce an important new measurement tool for marketers that could help propel its position even further up the mobile advertising market.
The social network is set to announce, at its annual F8 developers conference that kicks off on March 25, a new measurement tool for brands to determine whether an ad actually caused a person to download an app, according to a report from The Information. The tool won’t just be able to determine how ads bought via Facebook performed, but ads served on other apps too.
Business Insider has contacted Facebook for comment and will update if we hear back.
If Facebook manages to convince enough partners within the mobile ecosystem to sign up (and that might be difficult as companies like Google, Apple’s iAd, Twitter are direct rivals in the mobile space and will be unlikely to want to give Facebook a competitive advantage), this announcement could be huge.
Ultimately, as the Information suggests, Facebook is looking to become a one-stop-shop for advertisers to buy ads — both desktop and mobile — across the web.
- That’s why it launched the Facebook Audience Network last year that allows marketers to extend their Facebook campaigns to other mobile apps using its targeting data.
- And it’s why Facebook is cranking up support behind its Atlas ad server which allows advertisers to use Facebook’s data about consumers to target them on non-Facebook websites and ads.
- And it’s why Facebook launched a new data analysis tool last week called “Topic Data” that shows marketers what their audiences are talking about.
By improving its measurement offering, Facebook now has given marketers yet another incentive to book more of their online ad campaigns through Facebook.
Mobile app install ads are a huge business. Business Insider Intelligence estimates 30% of total US mobile ad revenue last year was generated by app-install ads. It’s not just game developers that are buying these types of ad units: E-commerce companies and brands are buying them up because they result in significant downloads and an easily measurable return on investment (the holy grail of marketing). A mobile app install ad doesn’t just drive that one-time download, it drives what is known as “lifetime customer value,” whereby brands can analyse everything they do in that app.
A huge proportion of Facebook’s mobile advertising revenue is made up from mobile app install ads. The Information pegged Facebook’s mobile app install ad revenue at $US3 billion in 2014, or one-third of its total revenue. The report also claims that Facebook accounts for half of the entire mobile app install ad market.
Facebook’s mobile app install ads are more than than three times as expensive as the average Facebook ad, bought on a CPM (cost per mille/1,000) basis. And they’re also highly-priced when compared to other paid advertising (including other app install ads) on other platforms. Demand is likely so high due to Facebook’s ability to let marketers target highly specific audiences, based on the wealth of data it has on its users.
If Facebook can demonstrate how the hugely popular mobile app install ad format is driving conversions for marketers across the board, it will likely open up yet more revenue: More marketers will likely buy mobile app install ads through Facebook, and it will generate income by licensing out the measurement data.
There is already a market in tracking which ads a user clicked last before they went on to download an app. The Information spoke to one such measurement company, Kochava, which claimed some of its clients — in a roster that includes Disney, Netflix, Pandora, and even Facebook — pay hundreds of thousands of dollars a month to track their mobile ad campaigns. Now it looks as though Facebook is trying to carve off some of that burgeoning market for itself.
NOW WATCH: Briefing videos
Business Insider Emails & Alerts
Site highlights each day to your inbox.