Does the cost of Facebook’s mobile advertising outweigh the ROI?

By Justin Lafferty Comment

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Mobile advertising was the star of Facebook’s Q3 earnings call, as 66 percent of the company’s advertising revenue comes away from desktop. The shift to mobile is a major trend industry-wide, according to a recent study by mobile-focused Facebook Marketing Partner Ampush.

Ampush studied the cost of mobile advertising on Facebook and Twitter, finding that while it is getting more costly to advertise to mobile users — it’s highly effective. Ampush’s study combined Facebook and Twitter. In Q3 2014, Ampush — which recently announced a new look, as well as 185 percent year-over-year growth — discovered that mobile ad spend on the two platforms is up 233 percent year-over-year. Mobile app installs have also gotten a little more expensive, as the average cost per install (CPI) has grown 29 percent year-over-year, but it’s a little more even-keel.

Inside Facebook talked with Ampush CMO and Co-Founder Chris Amos about the growth of mobile advertising on Facebook.

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Inside Facebook: Do you feel that more advertisers are trusting mobile now?

Chris Amos: I think so. There’s a couple things happening: the time spent on mobile is probably 25 percent of all media consumption and 60 percent of Internet. That’s just the situation. As a marketer, you have to figure out how you’re going to adapt to this. It’s my job to get to people, wherever they are. One of the things that’s special, with Facebook and Twitter, is how many companies label them as social, but they provide a very engaging visual experience. When you combine that with the fact these platforms have information about people that’s very authentic, and contrast that with display, the common currency there is cookies, which doesn’t even work on mobile.

You have the marriage of mobile beginning to trend upward from a user standpoint, and all of these different platforms which provide a consistent experience on different devices, whether it’s mobile to desktop or mobile to other devices. From an advertising standpoint, what Facebook’s really good at and what we’ve adopted is leveraging ad units that blend in with the user experience.

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IF: As your study showed, mobile advertising is getting more expensive. Are companies becoming worried about the cost of mobile advertising on Facebook?

CA: Not really. … When you look at the numbers, you see, yes it’s getting more expensive and you’re not sure how much longer it’s going to last. I think the reality is, it goes back to the point of performance. Mobile ad units on Facebook have gotten a lot more effective, because of what I talked about earlier — because of the targeting and the measurement. Advertisers are going to be willing to pay up for things that are working.

Ultimately, if I’m a marketer, there’s some objective that I’m trying to drive. It could be getting someone to download and install an application, or drive someone to a website to complete an ecommerce transaction, or book a flight. Whatever the objective is, we’ve seen that the cost of driving one of those action remains relatively stable. Because the ad units are getting more engaging or more targeted, the conversion rates have been increasing, therefore the costs of the actions are still very attractive.

Top image courtesy of Shutterstock.

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