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Social Media’s Seth Goldstein posits that sponsored questions are to social media advertising what keywords are to search marketing: the ad unit that’s native to the user experience. And the performance metric will become “cost per conversation.”
Excerpts of his IAB keynote via 3 Minute Ad Age.
In an interview with Justin Smith at InsideFacebook we got talking about advertising formats that are best suited to social media environments, and I proposed that previous media revolutions — like radio and TV — offer instructive analogies:
“[If you take] a look at radio (the internet of our grandparents’ day), people listened to news clips and radio plays. If you go back and listen to advertising during radio plays, the ad is a mini version of a radio play. You didn’t get a blinking light on your radio or something that created cognitive dissonance. And when things moved onto television, the ad didn’t contain two guys sitting around microphones doing radio plays — commercials changed as well. They got beautiful people, got a good soundtrack, and took advantage of all the visuals.
“If you bring that forward to social network environments, it’s largely about the conversation. As a Facebook user, I have a relationship with a couple hundred people, and my News Feed is where the conversations between my friends and me are happening. Marketers can’t just come in there and insert a radio play and hope that you will pay attention. The format that we’re engaging in is an online conversation, and the advertiser that wants to be a part of that needs to mimic what users are doing: join the conversation, not throw in a banner ad that disrupts that experience.”
Thanks for the ink, Justin!
Watercooler’s Justin Smith lists (at InsideFacebook) CPMs and eCPMs that Facebook app developers are collecting through ad-sales partners such as Social Media, VideoEgg, Lookery, AdSense and others. Most of those interviewed report CPMs between $0.04 and $0.60, with a few above a $1.00.
FM sells advertising and sponsorships on a few Facebook applications, including Watercooler and Graffiti, with CPMs in the $6-12 range. Though it’s important to note, we currently monetize only a minority of the ad inventory on those applications; we partner with several of the ad networks listed in Justin’s post to backfill the remainder.
My colleague Pete Spande responds to Adam Ostrow’s post at Mashable on the topic of Facebook applications and sponsorship dollars:
“I think the article misses the point and potential of Facebook apps as a business. There are supposedly 100 million blogs and most don’t make much money - even those with decent traction. Some however, and FM represents many of them, do very well and are seeing revenue growth that now rivals the audience growth they saw in previous years. I see a similar dynamic forming with FB applications. A handful of applications are making significant dollars through advertising, affiliate deals, etc. Others are seeing real promise. Most aren’t, and won’t, make much money ever.”
From the projects I’ve observed firsthand with Facebook apps affiliated with FM (Watercooler, Graffiti Wall and a few others), brands like Wacom, HP and Dell are finding large, high-quality audiences and significant marketing value. We’re only half a year into the era of Facebook applications, but I’m betting that marketers will do what they always do — send their advertising dollars in pursuit of their customers.
We put out a press release announcing several new relationships with leading Facebook applications, such as Graffiti Wall, PROTRADE and Watercooler, and early sponsorships by HP and Wacom.
Some coverage at AllFacebook, the unofficial Facebook blog:
“This announcement provides legitimacy to the Facebook application advertising space and serves a massive blow to existing Facebook advertisers. One of the main issues facing large Facebook developers is the difficulty to connect with the companies (and brands) best fit to integrate advertising campaigns into applications. Federated Media will help bridge this gap for larger application developers and existing Federated Media partners. Federated Media is now the largest advertising network to join the Facebook platform. This is a monumental step that will surely legitimize the platform’s potential.”
I’ll accept that positioning!
Here’s more on Wacom’s Graffiti Monster Contest.
UPDATE: From WebProNews:
“A number of recent stories have noted rifts between Facebook and advertisers; the launch of Beacon was, all in all, a bad move. But Federated Media Publishing wasn’t scared away, and has actually partnered with the owners of some Facebook applications. Graffiti Wall and the ‘Addicted To…’ series aren’t the most popular apps in existence - I’ve been asked to become a zombie or vampire far more often than I’ve been bothered by anything having to do with them. Still, they boast some impressive user counts - there are 300,000 of the ‘daily active’ variety for Graffiti Wall alone, according to company stats - so the development is rather important.”