Ad Clicks and Conversion to Installs for Facebook apps

We've been on the Facebook platform for a couple of weeks now, and we are learning everyday. Today I want to talk about using ads on Facebook to drive growth in the install user base for a Facebook app.

We released our app, Shared Memories, on Facebook about 10 days ago. We've grown to around 1500 users today, and while a large part of it is organic, viral growth, we have used PPC based ads to drive growth to our application. We've played with daily budgets, times, and creatives to try and learn more about how to optimize our investments. I want to share some of our learnings, and I want to talk about a new application we are releasing to other app owners for beta testing to help them optimize their ad performance as well.

We've advertised largely using the Social Media apps -- Appsaholic as their apps tracking and ad purchase application is called. They offer you an option to buy ad clicks from their other apps and even from other applications using an Adsense like approach for Facebook apps -- successful apps can sell ad space, and advertising apps (wannabe successful apps) can purchase the clickthroughs. The other advertising options on Facebook include doing link exchanges with other apps -- we've talked to Social Wizards who would rather only do a link exchange with someone at par with them on traffic (obviously). There is a bit of a food chain here -- Slide looks down upon Social Wizards, who in turn look down upon us. As you can imagine, it will only get harder for new applications to establish a stronghold in this community.

Other forms of advertising including putting the word about your app on forums, review sites and blogs (like this one).

The problem that an application owner will run into is that every one of these avenues costs money and time. As an individual developer, you almost have no time to track how you campaigns are doing, and it might get ineffective to te extent that any money you put into it might just be a waste.

First, let me share some of our learnings.

When Appsaholic says "Buy Installs" -- they are somewhat fooling you by their language. They really mean "Buy Clicks to the page from where users can install." Now, this is much worse than a clickthrough from a Google ad. Why? The user always have to go through a page where they have to "install" the app, and they are faced with a form asking them to allow your app to access their personal data. Hmm. As any marketing person will tell you, these pages will not convert that well. Sure, it is a necessary step, but you need to control the language and messaging, and in this case you do not. Since the users are coming through this additional step, it is a good chance that they may never get to even see your app. In other words, you are not really buying clickthroughs to a page you control -- but a clickthrough to a page rendered mostly by Facebook (except for a short description by the app owner in the right column in light font), from where the user has to decide whether to install your app.

We played with the landing page for the clickthroughs a bit. The options are that you can host it on your site, use the About application on Facebook, or directly the Install page on Facebook. Our experimentation tells us that the page that converts best is the install page on Facebook. It is somewhat obvious. The average attention span of a Facebook user is very tiny, and there will always be a dropoff at ever intermediate step from ad to install. We found the about page for our application to convert at about 18% from ad clicks, and the install page convert about 25% on average. We have not yet played with a page on our own site, though my instincts tell me to keep the user on Facebook, I'd love to see if someone has played with it and is willing to share how these pages convert. We do intend to play with these a bit and measure the conversion rate ourselves.

Right now, Appsaholic clicks are priced at a minimum of 15c. At a conversion rate of 20% from ad clicks, you are paying roughly $0.75 for every install. That is quite expensive -- especially since the really useful metric today (if that) is the "active" users, and for most apps, this tends to hover around 5-20% of their install user base. As you can imagine, the cost of getting a new "active" user probably around $3 to $4. Can you do better? Yes you can, but the first thing you have to realize is that unless you have a way of measuring your conversions from different campaigns, this is what you are roughly paying.

So how do you measure?

If you are advertising on Facebook, most advertising platforms let you take in the user id of the user as an argument that you can track internally to see what the conversion rate is. The flyers on Facebook, and the Appsaholic ads do this. If you don't have any other way of measuring, you at least need use these and log them. Then you can write your own scripts to match them against your installs.

But you start losing this ability with some other campaigns. E.g., if you are advertising your app on Google, or blogging about it, and want to track it, you don't have the ability to track how these campaigns are doing.

This is the struggle we were going through, so we built an application to do exactly this. Track ads to conversion rates for us, and give us detailed reports on how different campaigns are performing for an application. We are releasing it today to the developers on Facebook as a beta version. The application is called Ad Tracker, and it is available for you to install and manage your campaigns.

How does it work?

You can read some more details here: http://www.facebook.com/topic.php?uid=2563396458&topic=3161.

How it works is that you add an application you want to monitor, and provide the URLs where your users should go to post-install. You can add multiple campaigns for the application, and configure the destination URL for ad clicks for that campaign. What Ad tracker gives you is the URLs you should use in your app settings to direct the post-install to, and the ad clicks from your ad provider to. Ad Tracker will redirect the user immediately to the right URLs, and track the clicks to give you the desired statistics.

Simple enough? You can even add other developers as admins in your application so all of you can track them from the same place and each of you can add more campaigngs.

Try it out. Let us know what you think.

Next question you may ask is -- Is it free? For now it is. When you start managing your campaigns you will see a balance on your application that will start going negative. Our current pricing is based on # of ad clicks and # of install clicks. Install clicks are priced much lower than Ad clicks for obvious reasons -- we really want this app to be used to track conversion from ads to installs. However you will be getting a lot of non-ad driven installs, and you shouldn't be paying much to track these at all. The reason the install clicks are not free is that we don't want it to be primarily used for tracking installs only. Now you can do that, but there will be a small fee for it.

What is the fee? As I said, right now it is free. You balance will keep going negative forever. You can ignore the balance for our promotion period. We do not have an estimated time when we will end the promotion period -- but if you are an app user you will get at least one month's advance notification. We are curious to know -- how much will you be willing to pay for these stats? Here's a more tangible question we would like to get an answer for: You probably pay $150 for 1000 ad clicks at the Appsaholic base rate. How much will you be willing to spend in addition to get detailed clickthrough and conversion stats? $1? $5? 50 cents?

For now though, it is available for free, and we have not placed any limits on you trying to use it. So go for it!.