Ads API Profile: Nanigans’ Cost Per Action Service

Facebook’s performance advertising system does not offer the control or analytics features to allow larger, sophisticated ad buyers to take full advantage of its rich targeting options. Last fall, an ads API was released to a limited number of developers to allow them to build tools and services that facilitate better ad buying. One such service that helps developers acquire high quality users through ads is Nanigans.

Nanigans is a social advertising service which runs cost-per-install and cost-per-action campaigns through the Facebook Ads API. Clients set a desired CPA and per day budget, and Nanigans assumes the risk, experimenting with ad creative and targeting trying to attain the CPA with a CPC low enough to net the service a margin. Clients install pixels at various milestones of their product, such as at install, completing the app tutorial, or reaching level 3 of a game. They can then split their CPA to pay Nanigans different amounts when users complete these actions which signify probability of monetization. Unlike tools which clients use themselves, like Alchemy’s ad purchase and analytics tool we profiled, Nanigans clients set budgets and monitor through a dashboard while Nanigans does most of the work.

Nanigans is a 12-person company founded by Ric Calvillo and Claude Denton who are funded by angels and have advisors including PeerPong CEO Ro Choy. The company is half engineers, rounded out with ads operations managers who handle initiating and maintaining campaigns. Since its launch in late June, Nanigans has found 24 clients who spend an average of $2,000 a day, and are mostly game developers, along with some dating and e-commerce apps. They include many companies who make mid-size games with around 500,000 MAU, according to AppData such as Clicknation (Facebook games Superhero City and Age of Champions), and Jolt Online (Farmvillian, Gangsta Zombies and the off-platform game Legends of Zork). CEO Ric Calvillo says the service works best for these medium size games because targeting is less specific for huge games with very broad audiences.

Clients use Nanigans because they want to increase traffic from monetizable users. The two work together to set target demographics, a reasonable CPA and a budget large enough to attain them. If the client has existing analytics, Nanigans can use the data to help them with this decision, or the client can install pixels to determine their current CPA. For instance, a client could say they want 18+ males from the major English speaking countries and wants to pay a $1 CPA. They have the option of splitting this payment to Nanigans, such as paying 50 cents upon install, and $2.50 upon a user reaching level 3 of a game, which 1 in 5 users who install reach. Since some users take months to start paying, the company tracks early monetization predictors like reaching a certain level instead of all the transactions themselves. Therefore for every 5 installs, the client pays Nanigans (5 x .50c) + (1 x $2.50) = $5/5 users = $1 CPA. Clients can also pay upon a user sharing with their network or other in game actions, and even set different CPIs and splits by age or country. If Nanigans can’t achieve the CPA with the given budget within a day, they’ll try new creatives or targeting, but if they still fall short they may ask a client to raise their budget, permitting Nanigans to bid higher CPCs for ad space or run more ads. Nanigans will deliver the desired traffic, with campaigns which operate at a loss being offset by margins on successful ones. The company says they accept their small current profit margins because it is thinking long-term.