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Comment by ripberge | Hacker News Reader

The real question proposed in this email remains. Has FB somehow discovered a way to make ads on mobile way more relevant and valuable than desktop? Because that's what props up their stock price. I would bet it's a lot more accidental clicks by users...

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It is likely that mobile app install ads are far more lucrative than any other kinds of ads and they work particularly effectively on mobile.

How do the mobile apps that bought install ads make money? I understand FB is a good distribution channel, but how do the app developers make money when most of the apps are free and the rest sell for .99?

They make money by selling ads to other mobile startups, which in turn are funded by venture capital because of the revenue they can make selling ads to mobile startups... uh oh.

Have you seriously never actually used one of those apps e.g. Candy Crush or Clash of Clans ?

Yes they are free. But they gamified in app purchases extremely well. I know of CEOs and accountants who have dropped $50-100 on games like this who have never touched a computer game before. It's pretty amazing to see.

It is a "fad" in the same way that Nintendo, Blizzard, Valve etc are fads.

In-app sales.

There's an undying belief in the mobile app community that once you have a spot on user's screen, you can cross-promote other products, so the customer lifetime value is higher than 99c. That didn't work for Rovio (with Amazing Alex), but so far "a growing ecosystem of apps" is a business plan for a lot of those startups.

No, the ads are to install other mobile apps. The advertiser of the mobile app (say, for instance, Clash of Clans) only pays FB after the app is actually installed on the device. For instance, on iOS, those FB mobile ads open up the Apple App Store. From there, the uesr still has to click "Install".

I think it's safe to say that 99.99%+ of app installs are on purpose. No one really "accidentally" installs an app on his or her phone.

In feed ads are intuitively more engaging than banner ads. Your focus is specifically on the content of the feed with everything else a destraction.

Provided Facebook can match up the ads to the before/after feed content it would make sense that they would do well from it.

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