Bookmarked it… and stumbled it.

We can look into making the “Fake Facebook” ads a TOS violation for our advertisers. Would that be appropriate?

By your numbers,
1. Fewer than 2% of our ads are App install ads. It was 0% until January. We’re a traditional marketing network. Lumping us in with socialmedia isn’t accurate, no matter how much we love them.
2. Correct, but we’ll have to agree to disagree. No one needs another ad sales team. We’re working our way up to serving a half billion ads per employee per month by this time next year and will have low-touch inside sales and ecommerce only. It’s a different way to get profitable.
3. If we weren’t writing a bunch of fun web services in the background to add value to the overall social network world, you’d be completely right. However, we are coding away and we believe we can use our upcoming services to secure an ongoing, high-volume, low cost-per-unit, place in this ecology.

“What most folks tell you” isn’t how innovation happens.

I use Facebook apps several times/week so I have been around. I see the ads every time I use my favorite apps. There are other flaws in your and Social Media’s bus model besides the “fake Facebook” ads.

1. You rely on App install revenue, which is in essence VC money that is being used for Marketing
2. No significant Ad Revenue from direct sales (VideoEgg has a large sales team)
3. Relying on 3rd Party ad networks to pay you (a 3rd party ad network). This is a bad idea because they will likely circumvent you when they find out which of your apps are high traffic and you are only getting a 24% rev share on any advertisements in your network (Lookery gets 60% from VideoEgg and of the 60% from VideoEgg pays 60% to the app developer, leaving them with 24%).

Here is some free advice:
1. Start building, acquiring apps or at least get exclusive rep agreements
2. Hire an ad sales team

What most folks wont tell you is that in online ad networks (that don’t own the sites/apps) are as valuable as their ad sales team.

Rex

SocialMedia will dominate this space. They are ahead of the game, with the smartest people, and the best connections to FB. Everyone else is eating their scraps.

We don’t have any apps installed. Social Media both owns apps and runs ads for other people. We’re purely an ad network that works on others’ behalf. That said, what stats do you want. We’re rather open with data.

http://www.marketing-ninja.com/?p=302

And you should redesign the logo, too much of it is taken from the look and feel of SocialMedia’s.

Rex

Rex

In any event what this post seems to suggest is that for now there’s not a tremendous amount of value in small to mid sized apps. At a 12c, 25c or even 50c CPM you need some truly significant traffic to make a meaningful business. At a 50c CPM and 1 million impressions/month you’re looking at $500 per month in revenue. Not terrible for an individual developer but not a standalone business either. Making some real money from modest apps will require more creativity than inserting a line of lookery or social media code.

Rex