Facebook earns much of its $1 billion mobile ad revenue each quarter indirectly helping developers get more people into their apps through install and re-engagement ads. Today with the launch of “Out-App Purchase” Ads, Facebook is taking the engagement few steps ahead. Facebook now lets developers sell Facebook desktop game virtual goods straight from ads in the News Feed or sidebar.
According to Facebook, “A developer with a desktop game on Facebook can now promote the sale of a virtual good, such as an extra booster pack, and gamers can purchase the virtual good directly from the ad and start playing the game.”
The out-app purchase ads can only be bought on desktop, and Facebook told TC it had nothing to share about future plans to do more to inspire mobile purchases. For now the ads are already working on desktops, developers pay to show the ads, then pay Facebook a 30 percent cut of desktop in-game purchases.
Kixeye, California based developer of online strategy and combat games with over 5 million monthly active users, is one of the early users who have opted for the out-app purchase ads to sell discounted virtual currency in its Facebook game Battle Pirates.
To re-engage active players who were past purchasers, as well as active ones who had not yet paid, Kixeye offered discounts on their gold virtual currency and they saw over a 10 percent click-through rate and a 50 percent conversion rate for past purchasers. They saw a 14 percent conversion rate for those who hadn’t paid before.
In addition, they targeted their highest value spenders with large discounts — for instance, $500 worth of gold virtual currency for $250 — and saw over 5,000 percent return on ad spend.
While the out-App Purchase Ads might have seen some business, the challenge for Facebook is out-app purchase ads to mobile. Right now selling virtual goods from the mobile News Feed is not possible since iOS and Android don’t allow in-app purchases to happen outside of their respective app stores.
But it would be surprising if Facebook being a mobile company would ignore this bit.
Not just Facebook, Twitter is also competing in the same space to sell ads to developers. But Facebook has the upper hand since it knows a good load about our online behaviour and activities.
Nonetheless, starting from today, developers can create desktop app ads for virtual goods through all of our ads interfaces, including Create Flow, Power Editor, or through our Preferred Marketing Developers. And gamers can very soon expect to see more ways to upgrade their games in their News Feed.