Users From Facebook App Install Ads Spend 4x More On In-App Purchases

Andrew Hubbard on Facebook app install ads

The biggest challenge in building a successful mobile app is acquiring and retaining customers. And if you’re unable to acquire customers, there isn’t much scope to work on the retention strategies.

Facebook app install ads or paid marketing campaigns can certainly help app developers or entrepreneurs gain that crucial early traction, on the back of which then will they be able to grow their mobile startup.

To understand exactly how Facebook app install ads work, and how to make these campaigns more effective, I spoke to Andrew Hubbard, the founder of App Publishers Paradise – a resource for mobile app user acquisition and marketing. Andrew also helps app developers create highly successful Facebook app install ads through online courses and personalised coaching.

Q. How do Facebook app install ads compare with organic downloads? Is there a context in which one scores over the other?

Andrew: Obviously the main benefit of organic installs is that they are free. The problem with organic installs is you have no direct control over how many you get or where they come from. Of course, there are ways to increase organic downloads like App Store Optimization, press coverage, social media, etc. but these are all indirect and there are no guarantees that you will get results or what those results will look like.

On the other hand, Facebook app install ads allow you to control how many downloads you get, where they come from, and when you get them. This control means you can use paid installs to reach your goals much more easily than with organic installs.

When it comes to user lifetime value (LTV), paid installs can really stand out over organic installs. This is because you can target people who really want/need your app and are therefore much more likely to spend money. I recently published a case study that compared how much users acquired through Facebook app install ads spent on in-app purchases (IAP) compared to organically acquired users. The results were amazing; the users acquired through Facebook app install ads spend an average of 4 times more on IAPs.

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Q. What paid marketing channels give the best return on investment for mobile apps – Twitter ads, FB install ads, Google Adwords, etc?

Andrew: Facebook app install ads have been the top performer for me. I have seen lower cost-per-install with Facebook ads than other channels and it also tends to attract higher value users as well.

Q. Can Facebook app install ads drive user engagement and not just user acquisition?

Andrew: Paid ads can certainly be used to drive app engagement! I think we are going to see this become more common as the time progresses. As the cost to acquire new users rises it’s becoming more important than ever to retain the users that you already have. App developers are always looking for ways to do this and Facebook app install ads are a great tool.

Facebook app install ads can be particularly useful for driving engagement when other methods like push notifications become ineffective. Often users will turn off push notifications or ignore them. When this happens you can re-target them with ads in their Facebook news feed and reach them that way.

Another benefit of using ads to drive engagement, and this applies particularly to Facebook ads, is the ability to use deep links. Deep links allow you to direct the users to a particular point in the app when they click the ad. This lets you encourage engagement by giving away free content and bonuses to people to click your ads.

feeling curious

Q. One way to lower the cost of customer acquisition through Facebook app install ads is to narrow your customer segment. But what when one is building a social networking or productivity kind of app?

Users Acquired From Facebook App Install Ads Spend 4x More On In-App Purchases

Andrew: A great technique to use is to segment your target audience and use specific ads for each segment. Let’s use the example of a social networking app. At first glance, it is easy to say that the audience would contain both males and females across a wide age range, and from all across the globe. This makes it hard to narrow your ad targeting down.

But there are a couple of things you can do here. First, you can target males and females with different ads. Males are likely to want something different from a social networking app to females. You need to find out what it is that appeals most to each gender and create ad images and text that appeal strongly to each.

The same applies to different age brackets. 16-24 year olds will use a social networking app very differently to 50-60 year olds. You need to create ads that appeal to them individually. For example, 16-24 year olds might want to share selfies with friends whereas 50-60 year olds might be more interested in sharing holiday photos with family.

When it comes to location targeting you should think about what you are trying to achieve with your social networking app. Let’s assume the app is in very early stage. You might want to target a smaller country like Australia heavily to get a foothold in that market before expanding. After all, without users a social networking app isn’t very good. So you want to get lots of users as fast as possible. Targeting a single country heavily rather than running a global campaign might be a good way to do this.

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Q. How can an entrepreneur determine the cost per acquisition through Facebook app install ads for budgeting?

Andrew: The easiest way to do this is to start with a very small daily budget and find out what works before scaling up. Once you find what works and refine your campaign, you will see the cost-per-install (CPI) settle down and you can use those figures for budgeting.

When it comes to Facebook app install ads, it takes a few days for the algorithm to optimise for your campaign. So, running a small budget at first also allows this to happen and settle before you start spending big.

The other option is to set your maximum bid per install. Although this can result in you paying more per install, it provides security against spending more than what you want to spend per install.

Q. What strategies help drive the cost per acquisition down?

Andrew: Some of the most effective strategies I have found are:

  • Using Facebook Custom and Lookalike Audiences: These let you find target audiences just like your existing user base. They are powered by the vast amounts of data Facebook has about its users, meaning the accuracy is incredibly powerful.
  • Having a structured testing method in place for your ad creative: A different image or ad copy can make a huge difference, I have seen up to 20-40% in some cases. You should test multiple combinations of images and copy in your ads to find out which one works best for each audience. I always test at least 3 images and 2 sets of copy for each audience.
  • Don’t overlook the small stuff: If your app is an iOS app and over 100 MB, make sure your ads aren’t shown to people on a cellular connection. Apple doesn’t allow users to download apps over 100 MB over cellular so why show ads to people who can’t download your app. Also, does your app have a minimum supported operating system version? For example, iOS 6 or Android Lolly Pop. If this is the case you should make sure you aren’t showing Facebook app install ads to people using earlier versions. These are small things but if you overlook them you will be wasting money by showing ads to people who can’t even download your app.

Q. Would you like to share an uncommon growth hack that you have used in the area of paid marketing?

Andrew: A lot of app developers don’t run Facebook app install ads because they don’t think their app is ready for that. They are usually looking at it the wrong way around. You can use paid user acquisition to get the data you need to find exactly where you need to improve your app and create a well-oiled revenue generating machine.

Buying installs for an app for a short period of time and being able to see how these users are behaving is incredibly valuable. I use this technique to find out things like which IAPs sell better, how long it takes most users to make an IAP after installing, where users are dropping out, which users are most likely to make an IAP, and heaps more. It’s this data that lets you focus on the things that will directly contribute to higher revenue.

Nidhi Shah

Nidhi is the head of content marketing at Arkenea, a mobile app consultancy building experience rich apps for startups and businesses.