How do I grow my facebook application?

With over 500,000 facebook applications currently active on the platform, application developers are always looking to cut through the clutter and have their application rise the ranks. Constantly this question arises - so I have decided to lay out what I know in this blog post.

The first thing of course, is to have a great, engaging, and viral application. This is dead obvious however, and a massive sub-topic on its own, which I will not delve into. However - many application developers simply have an app that sucks! They spend money and effort attracting users, but these users don't stick, and these users don't bring on others. As a rough guideline, a good app with well-built viral features means that for every 1 new user you bring on, that user should attract 4 other users.

Now that your app is engaging and viral - and you have submitted your app to the directory, let's talk about how to cost-effectively bring users to your app.

1 - Cross-promote - If you already have an application on the facebook platform with a significant user base, this is the first place you should be looking to promote your new application. You can very cost-effectively start bringing users over onto your new app by simply creating ads for your own application. If you don't have any existing apps, you may want to scour the developer forum and see if there are any larger application developers, that are willing to advertise your app.

2 - Paid Advertising - Banner Installs - There are several Ad Networks out there that will allow you to purchase installs on a CPI (Cost per Install) basis. The idea is that an advertisement for your application will be shown - as banner ads - on other applications. A facebook user on another application (with the ad networks reach) will see your ad, click on it, and proceed to install your app.

The ad network will ask you to place a pixel (small chunk of code - usually an iframe or an img) that will allow them to track whenever a user clicks on an advertisement for your application and then proceeds to install your app. As a tip, you should only place this pixel such that it fires when a new user enters your application - and not for existing users.

Networks will have different CPI rates based on the country of the users you are trying to attract. For example, US users would be roughly twice the price of users in Thailand. Some networks will also offer a cost per engagement model, where you are only charged if the user installs the application - and then proceeds to complete a certain action (i.e. pass level 1). You would then place the tracking pixel after the user completes this action. Of course, the cost per engagement rate would be higher than a simple cost per install rate.


3 - Paid Advertising - Incentivized Installs - Many networks that monetize virtual currency will also allow you to purchase incentivized installs from them. In this case, a user would be awarded an in-game virtual currency in another application as a reward for installing your app. For example, they could be playing 'World Domination' and within this game they collect gold coins so that they can buy more weapons. The network would work with the developer of 'World Domination' such that any user who installs YOUR app is rewarded with X gold coins within World Domination. The major problem with this form of install, is that most users will install your app simply to get their gold coins, and then never engage with or return to your application at all!

There are some pros to this method however. The volume of incentivized installs available is very large. These installs can be purchased cheaper than the banner installs, so it is a good way to inflate your MAU number. Incentivized installs actually work moderately well for gaming applications, as it is mostly other gaming applications that these installs come from. Finally, the portion of users that stick around with your application are usually quite monetizable as they are comfortable with the concept of completing offers to earn virtual currency - as that is how they got to your app in the first place!

4 - Paid Advertising - facebook direct - Another way to advertise your application is to buy advertising directly with facebook. Right away, you will notice that ads can only be purchased on a CPM (cost per thousand impressions) or CPC (cost per click) model as opposed to a CPI (cost per installs) model! This means that you need to have some way to monitor the conversion rate and calculate your effective CPI. Any developer can go directly to the facebook ads manager and begin advertising, however there are certain agencies that will also manage this spend for you for a small markup fee. These services can often be VERY helpful as the optimization skills they have from experience and skill will more than make up for the markup they are taking. CPC's from facebook can range from $0.02 to $2.00 depending on your target market and CTR - so there is a ton of variability there depending on your ability to produce effective ads targeted to the right market.


There is a wide range of ways paid options to grow your application. Keep in mind that all users are not created equally. Normally Banner and facebook advertising users have the highest engagement rate - while incentivized installs have a lower engagement rate. The market prices reflect this. Based on your method and the country of the users you are attracting, your CPI cost can range anywhere from $0.10 to well over $1.00. It makes a lot of sense to bring on the right partner to grow your application if you want to make a significant splash into the market, and so that you can focus on building a great app. Looking forward to replies on this post - and I can be reached at any time for advice at hussein.fazal@adparlor.com

Virtual Goods Summit

Although the market for virtual goods continues to expand at a phenomenal rate, the business activity around this industry is just starting to catch up. A great networking opportunity is taking place next week in San Francisco at the Westin Market Street.

The Virtual Goods Summit 2009 should be a hit. The 2009 edition of the virtual goods summit will bring together thought leaders in this space to talk about what's changed, what's working, and the key challenges facing the industry. You can use the discount code ADPARLOR to save 15% off tickets.

I will be there along with other members of the AdParlor team. Come and network with us, and more importantly, we are giving out some really neat gifts on the Friday (Oct 30th). Guess what we are giving out, and you could win an extra set.

Safer ads for the facebook platform

AdParlor launches 'SuperSafe' ads, aiming to comfort developers who are nervous about the recent facebook policy enforcement.

Article available on Inside Facebook

Elephant in the room

There is an elephant in the room. That of falling eCPM's within social media applications. I am going to discuss facebook applications as this is the most relevant in terms of volume, growth, and overall revenues in the market. Many facebook apps built revenue projections based on eCPM's they were seeing several months ago, now have to revamp their thinking, as they are now earning a half, or even a quarter, of what they were previously seeing! This is not the case for all apps, but overall the general trend seems to be downwards. First let me apologize to those blog readers who care more about the advertising side than the publishers angle. Now, let me try and explain why this is happening?

1. Mobile Advertising Regulations - Recurring billing from mobile services were one of the driving forces behind strong eCPM's. Users - whether they were aware or not - completed these offers in droves, driving revenues to the ad networks and back to the publishers. Recent media coverage required facebook to take certain actions to modify the wording, presentation, and billing of these offers.

2. User Information - A few ad networks decided to take advantage of information in an inappropriate manner. Creating deceptive ads and storing user information. This caused a major backlash from facebook users, causing facebook to impose strict guidelines. Applications can no longer pass ANY user information to ad networks. This means even the ad networks that were using this information to legitimately target advertisements, are now unable to do so.

3. Ad Fatigue - The same ads that were working/converting just a few months back now have a significantly lower CTR and a significantly lower conversion rate. Users are becoming 'bored' of clicking through on ads within social media applications and are rather sticking to the main attraction.


Is this the end of making money on social media applications? No - Definately Not! Several reasons:

1. Despite dropping eCPM's in the past 6 months, there has been a recent rebound in the past few weeks. Ad networks have been diversifying their ads, improving their technology, and optimizing galore.
   
   
2. Despite dropping eCPM's, applications are growing bigger and the overall facebook user base keeps growing - generating more impressions overall.
   
   
3. Whereas previously only impressions from certain countries were monetizable, global impressions are actually starting to see an increase in eCPM's!
   
   
4. There is a still a massive and growing revenue opportunity in the virtual currency space and more and more application developers are beginning to take advantage of this.
   
   

Looking forward to your comments on the above - and any other thoughts.

Stanford Presentation @ Always On Conference

Got a hold of the video.



Just got a hold of a MUCH better version of the video which also shows my slides in action synchronized with the presentation. Thanks to the guys at vivu for this coverage.

AdParlor presenting @ Always On

Quick note - AdParlor will be presenting at the Always On conference on Thursday around 10am PST. Watch Live: http://alwayson.goingon.com/ecom/productview/24424

Always On - AdParlor CEO ShowCase

Quick Note - On Thursday July 30th @ 9:40AM PST (12:40 PM EST) I will have 6 minutes to present AdParlor at the Always On conference at Stanford University in Palo Alto. If you are going to be attending the conference, please shoot me an e-mail so that we can meet. If you will not be attending, feel free to join 15,000 others in watching the live webcast!

http://alwayson.goingon.com/ecom/productview/24424