Facebook’s Money-Making Solution To App Discovery? A Whole Feed Of Install Ads

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Finding a good app can be like looking for a needle in a truck stop bathroom. Apple and Google aren’t doing much to help you sift through their messy app stores. Facebook has tried to step up, but sometimes you don’t care about your friends and just want a new mobile toy to play with. So Facebook is taking haters’ worst nightmares and turning them into an app discovery tool.

Today I noticed a new bookmark in Facebook’s mobile navigation menu called “Find Apps” that leads to a special feed of nothing but app install ads and engagement ads. I asked Facebook about it, and the company confirms the new feature, saying “We’re always looking for ways to help people discover apps that are relevant for them, as well as opportunities for advertisers to reach these people, so we’re exploring a few new places to surface apps we think people will be interested in.”

How Does The App Ad Feed Work?

App Ad FeedThe App Ad Feed, as I’m calling it, looks a bit like the News Feed, but there are no stories from friends or Pages. Instead, it shows 25 ads for apps and games, each with a glossy cover photo, app icon, description, rating, and install button. You can refresh to get a different set.

Beyond the navigation menu bookmark, Facebook also added a “Find Apps” link to the drop-down menu if you go to hide an app ad in the News Feed.

The ads are targeted based on who advertisers said they wanted to reach, combined with a News Feed style ranking algorithm, according to Facebook. So are advertisers getting charged the same way they do when their ads show up in the standard News Feed? Yes. Facebook says it charges the same cost per click (CPC), cost per install (CPI), or optimized cost per one thousand impressions (oCPM) as normal.

That means you’ll see personalized app ads based on your habits and what people similar to you care about — something you can’t get on the app stores. If a company is willing to pay to get its app in front of you, it’s probably because it thinks you’ll enjoy it enough to download and eventually let the advertiser recoup the ad cost.

You might see the occasional app ad or story about friends interacting with apps in your News Feed. But for those seeking the next Flappy Bird or Yik Yak to occupy their time, the App Ad Feed could prove useful. And if you’re a disciple of the church of AdBlock, and already hate the ads you see on Facebook, you never have to visit the App Ad Feed.

Will anyone look at the damn thing? We watch infomercials, scan for billboards, and rally around Super Bowl commercials. While our minds tell us ads are there to waste our time, at times we’re mysteriously drawn to them.

Perhaps in the News Feed they’re annoying, but when there’s nothing to interrupt and we volunteered, a feed of ads could be oddly enticing for some of us. And if you realize that a quick scroll through the App Ad Feed racks up the same number of impressions as 5X to 10X as much News Feed reading, it’s clear why Facebook’s willing to give it a shot.

Inserting Itself Into The App Economy

Find AppsAs I wrote about extensively in my feature piece “Facebook, Google, And Twitter’s War For App Install Ads,” app discovery in the stores is broken. There are literally millions of apps, most of them crap or clones. There’s little in the way of personalized suggestions, leaving users to comb through Editor’s Picks and Top Lists that are influenced by industry connections and ad spend, respectively.

The problem stems from the fact that the two major mobile operating system makers don’t really care about app discovery at scale. Apple makes money on hardware sales and Google on ads. Meanwhile, the 30 percent taxes both iOS and Android lay on app downloads and in-app purchases mean they’re already earning revenue from the space.

Facebook’s not so fortunate. Without a mobile operating system, it needed a way to get into the app economy and it discovered the route in late 2012 with app install ads. With its immense time-on-site/app, Facebook has become a core gateway to paid app discovery with app ads in the News Feed.

App Ad Feed Shopping AppsThere’s a limit to how many ads Facebook can show in the News Feed before people get sick of them, though. Sometimes you do just want to see what your friends are up to, and ads are a distraction. Still, the fact that Facebook made nearly $2 billion on mobile ads, with a big chunk coming from app ads, implies that people who are in the mood for apps are finding them convincing and useful. Now they have a dedicated place to browse.

It all comes back to the same reason the social network acquired video adtech and publisher tool LiveRail, and launched its mobile ad network: Facebook has some of the best targeting and ROI measurement in the business, but it does not have infinite space to show ads in the News Feed.

By creating more surfaces to display the ads it powers, whether on the App Ad Feed, other video sites, or third-party mobile apps, it could earn more money without degrading the experience of the News Feed by showing more ads.

So whether you tolerate ads or hate them, you should benefit from the App Ad Feed.