Facebook Audience Network Investigation

1. Facebook
Investigation
Audience Network
Value Beyond CPI
Labs Report

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To help marketers understand performance differences between
Facebook’s Audience Network, traditional Facebook News Feed ads,
and other display networks, Fiksu analyzed loyalty/ROI metrics
across a set of apps running on all three segments. While performance
varied, our analysis showed that overall, even though Audience
Network ads had lower click-through rates and higher CPIs than
other sources, user quality proved to be similar to News Feed.
Additionally, those Audience Network ads drove an average revenue
per user more 24 times that of display networks.
Summary

3. Labs Report
3
Audience Network Introduces
New Traffic – and New Challenges
Facebook’s Audience Network brings Facebook’s extensive targeting capabilities to “additional
app-based mobile experiences.” Specifically, this means marketers can use Facebook’s powerful
targeting capabilities to deliver ads that appear in third-party apps.
Since Facebook’s mobile ads have been nothing if not a runaway success on their own property,
expanding their reach and the size of their potential audience would only seem to offer expanded
user acquisition opportunities. Unfortunately, some app marketers have a misleading view of
Audience Network performance.
One cause of this misconception is the inability to separate ‘traditional’ Facebook campaign
results—what we’ll call “News Feed” results, which appear inside the Facebook app—from
Audience Network results. Although marketers can get high-level performance stats like
impressions, CPI, and CTR on each type of traffic separately, some loyalty data remains more
difficult to discern: cost per purchasing user, loyalty rates, and the like.
As a result, app marketers can’t compare long-term value on News Feed-only campaigns
to campaigns that combine News Feed and Audience Network traffic. Due to high-level metrics
that often aren’t as strong in Audience Network, many have drawn the conclusion that
supplementing Facebook News Feed campaigns with Audience Network traffic is detrimental
to their overall user acquisition goals.
But in many cases, they’d be wrong. From the introduction of the Audience Network, Fiksu
worked with Facebook to conduct testing, using reports that tracked key loyalty metrics
of Facebook News Feed campaigns and Audience Network campaigns separately. How well
Audience Networks work might surprise you.

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The Bigger Picture
To understand the impact of Facebook’s Audience Network in comparison to the app marketing
industry as a whole, we examined aggregate data from eight Fiksu clients that ran campaigns in
September on both Facebook traffic sources and other display networks.
Despite slightly higher CPIs and lower click through rates, Facebook’s Audience Network performed
well in a number of ways:
1. High number of returning users
The rate at which users reengaged with apps was nearly identical to that in Facebook
News Feed campaigns, while being significantly higher than display networks. A large part
of Facebook’s success is its ability to target high-quality returning users, and it appears
that Facebook’s Audience Network continues that advantage.
Note: ARPU in this study is over a short time period, and ARPU being less than CPI is not indicative
that overall results led to negative ROI.
CTR CVR CPI REGISTRATIONS
RETURNING
USERS CPPU* ARPU**
1.16%NEWS FEED 16.61% $5.48 17.84% 65.16% $43.47 $1.63
0.34%AUDIENCE
NETWORK
26.28% $6.49 7.43% 58.55% $70.04 $3.64
5.45%DISPLAY 0.93% $5.73 5.60% 33.44% $293.57 $0.15
* Cost per purchasing user
** Average revenue per user

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4. Stellar conversion rate
Though we expected Facebook’s targeting options to keep conversion rates on Audience
Network higher than on other display networks, we did not expect the Audience Network
conversion rate to be on par with the standard Facebook News Feed—but the data showed
an even higher conversion rate. This was even more remarkable given the blend of banner
and interstitial advertising prevalent on Facebook’s Audience Network versus the News
Feed’s use of native ads, the impact of which was reflected in the lower click-through rate
on Audience Network.
As Facebook’s Audience Network continues to be built out to encompass more third-party apps,
the volume of available impressions will continue to grow. CPI may improve as well, but even if
it doesn’t, that shouldn’t be the deciding factor when considering Facebook’s Audience Network.
Instead, savvy marketers will put more emphasis on the significantly increased conversions,
user retention, and bottom-line monetization.
2. Drastically lower CPPUs
While higher than Facebook News Feed,
the Audience Networks’ cost per purchasing
user was approximately one fifth of the
cost on display.
$0
NEWS FEED AUDIENCE NETWORK DISPLAY
$50
$100
$150
$200
$250
$300
$350
COST PER PURCHASING USER
3. Increased revenue per purchasing user
Facebook’s Audience Networks’ revenue per
user was 20x greater than on display and
more than twice that of the Facebook News
Feed. This is a clear indication of Facebook’s
Audience Network’s ability to attract loyal,
high-quality users.
$0.00
NEWS FEED AUDIENCE NETWORK DISPLAY
$0.50
$1.00
$1.50
$2.00
$2.50
$3.00
$3.50
$4.00
AVERAGE REVENUE PER USER

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A Closer Look
While the cumulative results paint a broad picture of Facebook’s Audience Network’s capabilities,
the following case studies offer deeper insights into individual apps’ performance.
Case Study 1: Retail App
Seeking to maximize their registration rate and revenue per user, one retail app ran campaigns on
several sources, including Facebook News Feeds, Facebook’s Audience Network, and display, seeing
the following results:
For this particular retail app, the biggest benefit of Facebook’s Audience Network was the dramatic
increase in loyal user acquisition and retention. From their initial campaign, registrations ran at a
staggering 80 percent (just 5 percentage points less than Facebook News Feed and more than 20
percentage points higher than display), while returning user percentage surpassed the results of
any other network. The lower click-through rates, higher CPIs, and smaller number of impressions
remained consistent with the overall results shown previously.
CTR CPI REGISTRATIONS
RETURNING
USERS CPPU ARPU
0.76%NEWS FEED $3.59 85.47% 57.56% $6.82 $1.24
0.62%AUDIENCE
NETWORK
$9.86 80% 68.57% $16.43 $2.64
1.11%DISPLAY
$1.78 58.46% 38.98% $6.67 $0.59

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The average price of bringing in purchasing users was still greater on the Audience Network than
any other traffic source, but the difference among them was smaller than the cumulative results.
In addition, the average revenue per user was four times that of other display networks and more
than twice that of Facebook News Feed traffic, so over time, the resulting ROI could work out in
favor of the Audience Network despite the higher costs.
0%
NEWS FEED
REGISTRATIONS
RETURNING USERS
AUDIENCE
NETWORK
DISPLAY
10%
20%
30%
40%
50%
60%
70%
80%
90%

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Case Study 2: Game
Like the retail app, this puzzle game’s campaigns ran on Facebook News Feed, Facebook’s Audience
Network, and multiple display networks.
The bottom-line for this particular game is monetization. While retail and brand apps’ primary
concern is loyalty in the form of user registration and returning users, games are financially solvent
when successfully encouraging in-app purchases. This puzzle game was the most
successful in achieving that on Facebook’s Audience Network, having not only the lowest cost
per purchasing user but the highest average revenue per user—by a significant margin.
CTR CVR CPI
RETURNING
USERS CPPU ARPU
1.14%NEWS FEED 17.56% $5.57 47.43% $146.79 $1.32
0.29%AUDIENCE
NETWORK
31.25% $6.55 48.79% $94.66 $3.80
8.09%DISPLAY
0.86% $2.74 30.64% $765.85 $0.15

9. $0
NEWS FEED AUDIENCE NETWORK DISPLAY
$100
$200
$300
$400
$500
$600
$700
$800
$900
COST PER PURCHASING USER
$0.00
NEWS FEED AUDIENCE NETWORK DISPLAY
$0.50
$1.00
$1.50
$2.00
$2.50
$3.00
$3.50
$4.00
AVERAGE REVENUE PER USER
Labs Report
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Also, it’s worth noting that while most apps had more impressions in the News Feed, the
situation was reversed here, with the campaign generating about twice as many impressions on
the Audience Network than the News Feed. In this example, Facebook’s Audience Network was
particularly adept at delivering targeted in-game ads.

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Recommendations
As a result of this data and our experience running thousands of campaigns across dozens of
apps, we’ve developed a recommended sequence of steps to take to optimize your Facebook app
marketing campaigns:
• Start with Lookalike Audiences on Facebook News Feed
• Tweak based on results (if need be) and add Lookalike Audiences on
Facebook’s Audience Network
• Avoid saturation and continue momentum by adding interest
targeting on Facebook News Feed
• Based on those results, add interest targeting to Facebook’s Audience Network
An extension of Facebook’s successful mobile app ads, Facebook’s Audience Network has proven
to be an excellent source in acquiring loyal, high-value users for the majority of apps. Still, every app
is unique. So, make sure to track your long-term loyalty results—before and after adding Audience
Network traffic to your Facebook campaigns—to ensure efficient results.

12. Labs Report
Copyright © 2014 Fiksu. All rights reserved. Fiksu, the Fiksu logo, and FreeMyApps are registered trademarks
of Fiksu, Inc. All other trademarks mentioned herein are the property of their respective holders.
Fiksu is used by 40 of the 50 highest-grossing
apps to achieve exceptional app marketing results:
• 60 percent reduction in media costs
• 300 percent increase in loyal user acquisition
• Over 3.7 billion downloads generated to date
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