Facebook yesterday announced a new feature that will make mobile app install ads more appealing to advertisers: video. With the update, consumers will be able to click play and watch a video before installing your app.

Launched last year, mobile app install ads allow you to buy prominent exposure for your app inside the social network’s mobile News Feed. When clicked, individuals are prompted to download the app right onto their mobile device — if already installed, it will open automatically.

Video creative has already proven to be an effective way to drive engagement in News Feed. As always, compelling content is critical to effective advertising. Developers are encouraged to create videos that showcase the best features of your app, including product shots along with in-app screenplays.

DoubleDown Casino was one of Facebook’s first partners to test video in mobile app ads. “In our early tests, we found that using video in our mobile app ads resulted in increased install rates and decreased costs per install,” said John Clelland, VP of Interactive Marketing for DoubleDown Casino.

A spokesperson for the social network noted that these ads will go into Facebook’s auction just as any other ads. Additionally, the type of creative (photo or video) won’t have an effect on the pricing. Video ads should be live within the next few days.

Facebook also announced that it has simplified the buying process for mobile app ads by giving you the option to bid on cost per action (CPA). Previously the company offered advertisers the option of bidding on CPC or optimized cost per impression.

With CPA bidding, you are only charged when someone downloads and installs your app. Not only does this offer you greater control over spend on mobile app ads, but buying on CPA also drives, on average, 20 percent lower cost per install than buying on CPC.

CPA bidding will also be available within the next few days. You can read more about Facebook’s measurement options and the benefits of CPA buying on the company’s developers blog.

[Via: Inside Facebook, Image credit: Cristiano Betta]