Facebook is offering a new cost-per-download app service that tailors advertising for mobile users based on their current app use, according to a report in the Wall Street Journal. App creators are charged by the number of apps downloaded, rather than traditional CPM or CPC methods.
While some privacy critics are crying foul, the Facebook machine is desperate for new revenue sources and isn’t likely to be swayed.
How It Works
The new plan targets Facebook’s growing number of mobile users, which is believed to be around 300 million strong. Facebook’s plan is to serve up advertising on their feeds based on the other apps they’re already using.
App creators won’t have direct control over who which users are served up adveristing for their apps. These mobile oriented ads would appear on users newsfeed, rather than showing up as banners or static ads on the side of the page.
Whenever a user downloads an app, the company that made the app pays Facebook a predetermined fee.
What’s In It for Facebook?
For Facebook, the plan offers some pretty sweet advantages. For starters, advertising rates for pay-per-download plans is significantly higher than stand cost-per-thousand-views advertising. That’s especially important for any company, but especially important for company’s with high profile stock offerings that aren’t doing as well as they’d hoped.
What other new advertising plans is Facebook trying out? Check out Facebook Exchange Offers Real-Time Ad Bidding.
Privacy Issues
Unlike the adverting on their traditional web products, these app ads are not based solely on the goods and services that a user has already liked. That’s got some privacy advocates questioning whether or not the new plan is actually a good plan.
For better or worse, opt-in plans have long been considered the most effective means of maintaining user interest on the web. It seems as though Facebook is banking on mobile users not knowing, or caring, about such matters.
Finally
Expect to see Facebook trying more schemes like this in the months and years ahead thanks to increased revenue pressure from investors. The days of Facebook relying on static advertising alone are long gone.
What do you think of Facebook’s latest plan for generating revenue? Will consumers go for it, or does it go too far? Let us know on our PPC Forum.