When it comes to the amount of money being made on social networks, it seems like nobody really knows what’s going on. Sure, we occasionally hear about huge paydays for companies like Zynga, but very few people are willing to talk, and even when they do their figures are nearly impossible to verify independently.
Gambit, a payment engine that powers the microtransactions for a number of popular social network apps, is looking to help shed some light on the matter. Since launching to the public last January, the company has grown to seeing over 20 million uniques a month and has racked up a number of notable clients, including SmallWorlds, Facebook’s Friends For Sale, and Playdom, which is currently one of MySpace’s leading application developers.
We asked the company (which also blogs about the industry) to pull together some data that was representative of the trends it was seeing across Facebook and MySpace, and the results are quite interesting, if not terribly surprising. The data comes from two applications that Gambit considers to be “very comparable” games, one from each social network. But it comes with two caveats: it only includes information about users who are actually driving revenue either through direct payments or offers (in other words, it neglects to take into account any advertising revenue) and the figures come from only one data point. That said, Gambit says that the stats below are representative of the trends it is seeing across its entire platform.
The first stat, which measures the amount of payments to come from the US vs international audiences, isn’t surprising at all. Facebook is seeing huge growth internationally (where MySpace continues to struggle), so far more of Facebook’s transactions come from abroad than they do on MySpace.
The data also indicates that Facebook users are more likely to engage in direct payments (submitting money via credit card or services like PayPal) than they are through lead-generation offers (which invite users to try out a new service), while MySpace sees about an even split.
Perhaps the most interesting point is the average revenue per user being earned by applications on Facebook and MySpace. I’ve previously heard that MySpace users were more valuable than Facebook users, but Gambit’s data contradicts this, at least for users who are engaging in microtransactions and offers (it’s possible that MySpace apps can drive more revenue through advertising, which isn’t measured in this data). Still, as micro-transactions become more popular this is definitely something developers are going to keep in mind – if you can convince a user to get out their wallets, they’re likely to pay more money on Facebook than they are on MySpace.
“I’ve previously heard that MySpace users were more valuable than Facebook users.”
Whoever you heard this from is an idiot.
a reliable source according to techcrunch is hearing a rumor from a random person.
It completely makes sense, see the difference in user demographics here:
http://tomuse.c...ealthiest-users
That data was compiled in April of 2008 and since then there’s an even greater differences between Facebook and MySpace users’ demographics with respect to income and education. Hence, the more wealth, the greater more discretionary spending and the greater potential for purchases. This is especially relevant when examining data from a payment service like the one above.
myspace has more kids and more idiots on it
Short and true!
“Facebook Users Have Deeper Pockets Than Their MySpace Counterparts”
Noooo, really?
Was today margarita Friday at TechCrunch headquarters?
Not impressed by results.
Facebook users are typically in college (at least used to be) or working (since they made it open for all) …. as compared to Myspace which had predominantly users from Highschool.
Duh huh.
DUH
techcrunch you suck
this is some useless “news”
Interesting results.
Fb is richer!
Doesn’t mean much. Larger pockets are important, but whats more important is a groups propensity to consume.
Take american media for example, asians are the richest minority group in america, but american media companies do not make movies for asians. Reason being asians don’t spend money on media products as much as other minority groups like blacks and mexicans.
Asians are a much smaller minority group than blacks and hispanics.
what does this mean for us?
Not to belittle your article, but who cares.
there are some 500000 facebook developers, you know
Jason:I appreciate the update, and I agree with your final conclusion (bearing in mind the data is limited). But the data doesn’t tell me how many users we’re actually talking about. I really can’t tell the size of the spend.
Some people have far too much time their hands if they feel the need to read an article that doesn’t interest them, and then comment about how uninteresting the article was.
This article is very interesting, and if you know anything about online advertising, you would know that U.S. visitors are the most valuable, and therefore MySpace users would be more valuable than Facebook users.
Thanks, Jason, for the post.
What does this have to do with Twitter ?
i still like myspace over facebook it attracts the better personality and we all know personality doesnt cost money
Hi, could someone explain me please the sentence:
“users who are actually driving revenue either through direct payments or offers” ?
how does an app developer earns money with “direct payments” or “offers” ?!
direct payments – users are paying (by credit card or paypal) money to the app developer
offers – the app dev gets paid for each offer a user completes
what does it mean “for each offer a user completes”?
what offers? I don’t get it
Maks-
Offers-Users are given the option of earning “virtual points” by engaging with free CPA advertisements rather than purchaser points directly, i.e., Sign up for a free Netflix trial and, in exchange, earn “virtual points”.
why don’t they sample their myspace data to match facebooks demographics in order to make a fair comparison?
The data, while interesting, need to be more in-depth.
myspace is trashy. facebook started as a tool for college kids and then trickled down. Myspace started with middle schoolers. who do you think has more money…
I believe the only reason anyone spends money on these games is because Gambit does not pay for the offers done through them. I play Yoville and recently Gambit took over from Super Rewards. Gambit is the worst company ever. Their customer service is aweful and they do not pay for offers done not even paid offers. I t does not matter how much proof you send them they do not pay. Check them out on the BBB website. I would also recommend looking at Zyngz on the BBB web site. How many companies can survive with a D- grade?
I, too, have been scammed by Gambit.
I completed an order, sent them a copy of the confirmation email, as requested by the AUTOMATED response email, and now I do not even have any offers area on my game app, along with all of the contact history being gone.
I guess this is their way to try and erase the evidence of the order, much less any options to inquire about it.
Am currently speaking with lawyers about starting a class action lawsuit against all companies involved (Gambit, Zynga, and Direct TV)
Gambit Payments Ticket #3045401