The Future of Social Advertising

The hot topic recently has been social advertising, or as they are now called, SocialAds.

This has been a relatively new trend given that the Facebook Platform literally spawned this space just a few months ago. Yes, it has been months. Welcome to Web [whatevertheheckyouwant].0.

Since the Facebook Platform launch this summer, there have been a couple folks that have thrown their hats into the ad game. Some are old hands from the widget space. Others are newcomers to the scene like Lookery and SocialMedia. Oddly enough, very few of these folks are recognized players in the advertising game.

Here is a list of folks I follow:

– RockYou
– Slide
– FBExchange
– Cubics
– VideoEgg
– Lookery
– SocialMedia

All this is great. Social Application Developers have a number of choices for monetization. The pink elephant in the room, however, is what are the big boys – including Facebook – planning on?

Well, there has been a lot of theory around this until recently. But it looks like the gorillas are coming:

According to Nick from AllFacebook:

Mark Zuckerberg will be announcing the launch of Facebook’s new advertising system on November 6th. I have spoken with at least one individual who’s company was invited to the event. According to advertising industry insiders, information about users’ relationships can be used to target them on the site and off of the site.

AdAge also indicated the other day that the GOOG is coming (surprise) as well:

Eric Schmidt asserts, “How will those developers get paid for those services?” he said. “We would like to have our ads in those applications.”

I am sure that is not sitting around eitehr. So the question is, how will this all pan out? Is there some advantage that the first movers have? All of the graph data is equally open to all parties. Or, was it all just a gold rush that is about to run out?

My biggest question is, ‘what is the future of the CPI (cost-per-install) model?

The monetization of social applications is definitely something I will be following more. If anyone has any thoughts/ideas/scoops, let a brother know. Back to work.

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hoomanradfar Written by:

  • Ultimately I think CPI is the same as CPA except that there is no money necessarily being generated from an application install. Based on the fact that no money is being generated from the CPI model, I don't see this being a long lived event. ultimately, this whole installation process needs to become much more easy as people become accustomed to approving the installation information (perhaps a default installation setting?).

    In regards to other social ad networks, I think others will rise but the first mover and the best one in the immediate future will be Facebook. Google is working feverishly to compete but they don't have the same type of data. Conversely, my friends at Google could argue that they have enough information to predict who you are. I'm not quite sure which way this will go in the end!

  • CPI is definitely a derivative of the traditional CPA model.

    My larger question about the whole CPI concept is that, currently, it is fed by an ecosystem of 5000 developers. Basically it is all the little developers paying all the big developers to get some traffic.

    Moreover, I still have not seen what the average eCPM is across all these networks. I have seen claims of CPMs as high as $7.50, but if you account for the fact that many of these ad networks do not have a consistent supply of advertisers/etc, I bet the eCPM backs into something around $1, or less.

    The CPI concept is interesting because it is starting to emerge in the widget space as well. I guess time will tell where this all goes, but boy is it a nutty space.