Spend on mobile app install ads on Facebook and Instagram grew by 54% year-on-year (YoY) in the second quarter of 2016, helping to generate a 95% increase in total clicks during Q2 according to a study released today by Kenshoo, a global leader in agile marketing.
Kenshoo’s third Mobile App Advertiser Trends Report reveals that the rise in spend and clicks on social mobile app install ads is partly due to the wider adoption of carousel format ads, which support a carousel of up to five separate images and links. Another important driver is the increasing use of video, which accounted for 42% of spend on mobile app install ads in the quarter. Both of these ad units drive clicks at a higher rate than other social ads.
“Offering multiple links and images, or showcasing apps through video provides advertisers more flexibility in demonstrating their appeal to users, so it’s no surprise that we’re seeing movement towards these ad units when it comes to app installs,” said Chris Costello, senior director of marketing research for Kenshoo. “What’s more, these ads can facilitate greater interaction with users, driving clicks that are then opportunities for apps to be downloaded and integrated into people’s daily routines.”
The sharp increase in the volume of clicks contributed to a rise in the click-through rate for app install ads, which went up 4% YoY in Q2, reaching its highest point in five quarters. At the same time cost per click (CPC) and cost per thousand (CPM) have gone down 21% and 18% YoY respectively.
Kenshoo’s study points to the existence of a “reactive” seasonality in spending on mobile app install ads on social channels, with lower spend in Q4, when there is a heavier focus on retail and product ads in the holiday shopping season. This is followed in Q1 by a spike in spend on mobile app install ads, especially in January, as retail ad spend drops off. The CPC and CPM of these ads follow an inverted pattern for the same reasons, rising in Q4 and then trending downward in Q1 and Q2.
Rob Coyne, Kenshoo’s managing director for EMEA, said: “The report illustrates how app marketers are growing more confident about spending on social app ads to drive installs, and are increasingly comfortable using newer formats such as carousel and video to attract engagement and installs. It also underlines the big role played by the gaming sector in social app install advertising.”
The gaming industry is a significant player within mobile app advertising and in Kenshoo’s analysis gaming was responsible for 61% of total spend on app install ads in the second quarter. Gaming advertisers are necessarily more heavily focused on driving app installs than other industries, meaning app install ads accounted for 78% of the segment’s total social ad spend in Q2, compare with 58% of social spend for other industries.
The intensity of the competition in gaming, along with a greater focus on in-app revenue and lifetime value, also means that gaming advertisers pay more for mobile app install ads; the gaming sector pays both a higher CPC ($0.47) and CPM ($3.98) than other industries ($0.17 and $2.69 respectively).