Social Application Monetization
15.10.07Filed Under: Apps, Perspective
VentureBeat has an interesting article reviewing Google’s Sneak Attack into advertising on Facebook. Obviously, this poses a threat to some of the smaller Facebook-specific Ad Networks out there already. However, I firmly believe this will have little to no effect upon the networks that are building solid “Social Media Businesses” (as Jeremy Liew refers to them) atop the social networks following Facebook’s opening lead. There are two major reasons why.
Contextual Advertising Doesn’t Suit Current Apps
Many, if not most, of the successful Facebook apps do not have the type of content that contextual advertising fits well, which ultimately results in developers and app-creators making far less than they could partnering with other networks. Our very own Judge-O-Rama suffers from this issue, in fact. While Google AdSense offered us a simple way to (try and) monetize judgeorama.com from the get-go, the content on Judge-O-Rama just doesn’t suit the contextual ad model. With most of our words relating to judges, judgment, contests, conflicts, and the like, the ads being served on our site absolutely suck. But Judge-O-Rama wasn’t built with contextual advertising in mind; it’s a page view machine and an entertainment site. While there are some Facebook apps that would well suit Google ads, most of them are similar to our model in that they’re time-wasting entertainers. (Kara Swisher would argue they’re for toddlers.) If you look at the top ten Facebook apps alone, of them, maybe iLike and Flixster would serve the AdSense model well, but even those are iffy. Look at VentureBeat’s SouthPark application example of the new AdSense test, even: why would someone who enjoys South Park enough to download a related Facebook app click on a Google ad to “Learn about a treatment option with Enbrel”???
Google’s Banner Ads Suck
So let’s say Google eventually realizes that their Facebook-specific AdSense ads perform poorly (which we expect they will). There’s no denying Google’s superiority at monetizing the long-tail contextually, however, there’s a reason dozens of other Ad Networks (and many of them, very successful) still exist: they offer CPM rates. This somewhat ties into the first issue. CPC banners just don’t monetize applications as handsomely as CPM-based ads, especially when it’s a media-related app. Are display ads annoying? They can be. But it’s a way for publishers to monetize their efforts and users would find it far more annoying paying for the entertainment content they want.
Ultimately, venturing into Facebook advertising won’t hurt Google one bit, it just probably won’t help them much, either. If you ask us, networks like RockYou, Slide, Social Media, and others, will still do just fine.
Update: Rodney Rumford, author of FaceReviews.com, is thinking along the same lines as us. In his exact, not-so-subtle words… “Seriously; this is crap and it makes me vomit.”
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June 22nd, 2008 at 4:41 amI read similar article also named Social Application Monetization, and it was completely different. Personally, I agree with you more, because this article makes a little bit more sense for me
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July 20th, 2008 at 4:36 am