Peter Kafka

Recent Posts by Peter Kafka

Facebook Says Its Mobile App Ads Work, So It’s Making More of Them

One big reason that investors like Facebook again: The company looks like it has figured out how to make money — a lot of money — on mobile.

One big reason Facebook looks like it has figured out mobile: App-install ads, which developers use to encourage Facebook users to download their software onto their phones.

Now Facebook is going back to the well, and will try to make even more money from app developers.

This time it is selling them ads that link directly from Facebook’s app to apps users have already installed, in the hope of driving usage and/or sales.

The idea: A music app like Spotify could use the new ads to direct listeners to new songs that have appeared on the service. Or a retailer could tell a potential shopper about a sale, and send them directly to their app.

Here’s a super-efficient demonstration video that shows how this might work with an app from HotelTonight, the last-minute room-booking service:

So, that makes sense. In retrospect it seems obvious that Facebook would do well by targeting app developers, since anything that promises to help solve their bottlenecks/discovery problems at Apple’s App Store and other distribution outlets should be attractive.

But, while Facebook has made a point of playing up its success with app ads (as opposed to its work with the Facebook Exchange, which it plays down), we don’t really know how big a business the ads are for Mark Zuckerberg and company.

Facebook does offer these nuggets, though: It says that users have downloaded 145 million apps via its ads this year, and that 8,400 advertisers used the ads in Q2, up from 3,000 in Q1. Perhaps we’ll get more detail when the company releases Q3 earnings this month.

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I’m a giant vat of creative juices.

— David Pogue on why he’s joining Yahoo