Mobile App Install Ads & Facebook’s Earnings Report


Very interesting tidbit for the #stats hound in Facebook beats the street and Wall Street yawns: Facebook earnings report for Q2/2014 reveals that their App Install Ads may be driving significant revenue increases. [above chart is from the post]

But lest you think that this is a Facebook issue alone, it is really much bigger than that:

1) The rise of App Install Ads (AIAs), which for some reason according to Re/Code’s Peter Kafka “…In [the] FB [earnings] call, [Facebook’s] Sandberg tries to downplay importance of app install ads to mobile biz. Not a ‘great majority’ of $.”

… appears to prove my long-held belief that Context is the key to getting ads to work, i.e. offer people something that makes sense in the context of what they are already doing. In that light, offering people mobile apps while they are using a mobile device and likely app, is exactly the right approach.

(Compare what I wrote here a long time ago: .)

Pair it with the “Impulse Purchase Territory” pricing of between FREE and $4.99 say, and you have something that works, compared to offering them a refrigerator or car in a mobile ad.

(More on the Impulse Purchase Territory pricing concept here: where…

“…I’ve said previously that e.g. Sony is making a huge mistake by not going the $1/month route for complete/unlimited streaming music access with their own new offering: Because that would put it in the complete impulse purchase, don’t-need-to-think, will-likely-never-cancel-for-any-reason category.”

BTW Amazon took another significant step a few days ago in the inevitable march to near $0 book content with its $10/month all-you-can-read Kindle eBook subscription service: Yes, there are still the “Big 5” publishing houses as holdouts, because they wrongly believe that they have pricing power left… .)

2) The relative ARPUs shown below are particularly interesting to me from the perspective of Web or mobile service monetization strategies. As you can see, the world-wide ARPU for Facebook is creeping towards $10 per user per year, with significant — though expected — variation between various regions:

In the U.S. with $6.44 per quarter = near $26 / year, the revenue is more than double a European user, and 6 times that of a user in Asia.

I have been playing with the idea over the past 6+ months of what would happen if Web services attempted to charge their users $1/month in exchange for never having to bother them with ads, or any other form of targeting or data exploitation, except maybe for where that were specifically requested by the user (OPT-IN), in line with +Doc Searls‘ and others #VRM  ideas.

For FB, the world-wide and European ARPU numbers still show this as a viable option, but for the U.S. of course one could argue that FB would be leaving too much money on the proverbial table if they went this route (they would have to charge a U.S. user $2/month to break even with their current number).

Then again, a non-public company wouldn’t have short-term shareholder interests to answer to, and could well choose to go the longer-term more sustainable route of forgoing some ad revenue for a happier, more loyal user base.

(Not that it is by any means easy to significantly drive up ad monetization on social media, as Twitter has been finding out for a good while now.)

It least that’s my current view/argument, that once ONE successful Social Media / etc. service offers this #privacy respecting option, that they will either clean up big, or force  the competition to follow suit in relatively short order. Yes, we all once thought that G+ could be that option, but it was not to be…

3) Related: This chart shows the rise of FB’s mobile ads going from a mere blip around Q2/2012, to 1.5x or the stagnant desktop ads a mere two years later!

“Where Facebook’s money comes from, via @BIIntelligence”

Mobile is rising in the near blink of an eye (and not done yet…), and Mobile Apps have emerged as maybe THE way to monetize it beyond device sales and mobile bandwidth. Stands to reason that selling ads WITH this trend instead of against it would work.

Tangentially related posts on Mobile and Pricing issues:

Round-up of recent *Quick Hits* Business Mindhacks on Posterous as predicted by my recent post on “Why Creating A New Habit Is So Hard”, I haven’t quite been entirely able to lay off of the “Quick Hits” posts to Posterous.

Still working on modifying that habit to posting here instead… :)

Since we wouldn’t want you to miss anything important, these were the most recent offerings:

Read and profit. Feel free to share.

Twitter Tries To Change Retweets, Doesn’t Get The Social In Social Media

A passage from Twitter CEO Evan Williams’ post why the new, formalized Retweet function "works the way it does" shows lack of depth and clarity in Twitter’s thinking about the significance of trying to replace the "Retweet" (RT) forwarding convention, something that arose organically from its community without any assistance by the company whatsoever:

The attribution problem: In order to get rid of the attribution confusion, in your timeline we show the avatar and username of the original author of the tweet—with the person who retweeted it (whom you actually follow) in the metadata underneath. The decision is that this:

…is a better presentation than this:

No fault of @AleciaHuck’s but the first is simply easier to read, and it gives proper credit to @badbanana. Even if you know @AleciaHuck, there’s no benefit to having her picture in there.


So here is the big problem: That last half sentence (my BOLD highlight) shows complete ignorance of the way that Twitter works as a social engine and calculus.

Twitter users, whether consciously or not, are with each tweet putting a little bit of previously accrued social capital they have with their "followers" (Twitter users that are subscribed to them) on the line. So the act of forwarding another, often third party user’s tweet is significant in that it is a form of a micro-endorsement for this user that their followers are themselves typically not even subscribed to.

If the text of the forwarded tweet or (in many cases) the link to further content that it contains is ill received, the retweeting user in some sense is held accountable by their followers. At best, only a little bit of "social capital" is deducted, at worst, some will unfollow completely.

The user has put their stamp of approval on the retweeted content, and if it contained a link, it is largely expected that by extension the content at the end of that link was read and approved of as well.

(There are some exceptions to this when the news contained in a tweet is considered "breaking" enough so that the timeliness criterion overrides the need for checking out all of the content at the end of a link first. But, as most Twitter users have discovered before, the risk of forwarding something that turns out to be of questionable quality or outright bogus or even harmful goes up exponentially. "Blind" retweeting of links should be avoided.)

So, because of this micro-endorsement element, a Retweet has always gone well beyond a mere surfacing mechanism. Social media statistician Dan Zarrella in a prescient post a few months ago warned that the proposed RT formalization would do away with this form of social proof inherent in the RT convention ("Using the orig­i­nal poster’s pic & name in my time­line destroys any social proof the ReTweeter may have lent the Tweet.").

Known Avatar = Benefit

Back to the example given in the excerpt, there is in fact a GREAT benefit inherent in the picture/avatar of a user you have been following for any length of time: It is known to you, it is far less of a stranger all things being equal.

You have imbued it in your mind, by way of repetition (active Twitter users may be seeing the profile pictures/avatars of other active followed/friended users hundreds or even many thousands of times), with some trust and social capital.

It has been pointed out by multiple people that the surprise of seeing a "stranger’s" avatar in one’s Twitter inbound stream is downright shocking to some people, so strong is the identification with known people one has been following.

This has been one of the 1st rules of Twitter: You see only who you elect to see (i.e. follow).

If the avatar is now switched out to show that of the original author of the forwarded tweet, this trust is gone, unless the recipients (your followers) also happened to be following that same user. But even if they were, you, the Retweeter, are now cut out of the equation!

The social capital you put on the line is now not really rewarded anymore by having you be clearly associated with the surfacing of the information for the benefit of your followers. This can, especially over time, have several unintended consequences:

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