Is $7.5 the average cost of install from Facebook mobile app ads?
Quick back of the envelope math:
Facebook results Q3/2012 (before mobile app install ads launch)
- Mobile ads: 14% of total or $150 million (TechCrunch)
- Mobile MAU: 604 million (FB investor relations)
Facebook results Q1/2013 (investor call highlights success of mobile app install ads = big growth & revenue driver)
- Mobile ads: 30% of total or about $373.5 million (FB investor relations)
- Mobile MAU: 751 million (FB investor relations)
- Install ad results = 25 million installs driven globally though iOS App Store & Google Play store (TechCrunch)
Assuming other mobile ads grow at the same rate as the size of mobile audience: $150M * (751/604) = $186.5 million, or 50% of mobile ad revenue. Update: to be clear, this is an assumption. Non-install mobile ads could be growing a lot faster, say 30% faster than MAU, that is, grow a total 67% from Q3/2012 to Q1/2013 ($150M to $242M).
Keeping the original assumption mobile install ads grossed $187 million.
FB mobile ad CPI high end estimate = $187 million / 25 million installs = $7.5 / install
If we assume non-install ads grew 30% faster than mobile MAUs, then mobile install ads grossed $131 million.
FB mobile ad CPI low end estimate = $131 million / 25 million installs = $5.2 / install
To put this into perspective, mobile CPI from video ads (nearest in quality to FB ads) go for about $3 at volume.
Updated above: the key assumption here is the growth rate of the other mobile ads. It is possible that my estimate of 67% growth of non-install mobile ad revenue in 6 months is low, but that would mean that brand advertisers suddenly decided to really get on board with mobile ads. Facebook itself has really only been vocal about the how good results mobile app install ads are providing, which leads me to believe that the growth on non-install ads is not as strong as the takeup of install ads.Explore posts in the same categories: business