• by Jesse Pujji , August 8, 2013

Over 1 million apps have been released for iOS and Android operating systems since 2008, creating an economy that drives upwards of $25 billion in annual revenue and is expected to swell to $36 billion by 2016.

As apps increase in number and Web traffic continues to shift toward mobile devices (which accounted for a staggering 21% of web traffic in Q1 2013), app developers will have to compete fiercely to acquire active and high value users. For developers planning their user acquisition strategies, those that look to Facebook mobile user acquisition will lead the pack.

To drive app user acquisition, developers employ a diverse set of advertising platforms. Commonly used platforms include Google AdMob, Apple iAd and other service providers that deploy ads across a multitude of mobile advertising networks and real-time bidding exchanges. However, developers are increasingly turning to Facebook to drive user acquisition. In Q4 of 2012, Facebook introduced Mobile App Install Ads, which direct users to the app store from their News Feed. This ad unit has driven over 25 million installs and has been touted as a cost-effective way to acquire high value users.

Facebook provides access to a massive and engaged audience, making the use of Mobile App Install Ads advantageous in user acquisition strategy. In March 2013, Facebook reported over 731 million monthly active users on Facebook mobile. ComScore, a digital measurement company, found that the average US consumer spends two hours per day inside mobile apps. 23% of this total time spent in apps was spent on the Facebook app, making it the most popular mobile app in existence.

Developers can parse through this massive user base with Facebook’s suite of granular targeting tools. Users can be distinguished by--but are not limited to--demographic and geographic information, likes and interests, and their behavior on and offline. For example, a mobile gaming company can serve ads to men 13 to 18 years old who enjoy strategy and adventure games, or an e-commerce company can serve ads to women who like fashion magazines and spend more than three times the national average on clothing.

These targeting tools paired with a sizable user base enable developers to reach a large portion of their audience with ease.

Developers can work with mobile tracking partners to evaluate the long-term value of users that are acquired on Facebook. (Our clients have found a CPC below 50 cents with conversion rates as high as 25%.) These partners can fully integrate into Facebook advertisers’ APIs, which allows advertisers to optimize user acquisition based on post-install data.

Mobile App Install Ads can complement other Facebook advertising initiatives. Developers can concurrently run fan acquisition campaigns to acquire a loyal Facebook audience that they can advertise to via organic and paid Page Post Advertisements. This approach serves two functions: first, for fans that are already app users, it can keep them engaged with the app. A fan page can be used to announce new features and release high-quality content; page posts can be organically served or amplified via paid media. Secondly, as fans interact with the page, it will generate Sponsored Story Advertisements for their friends.