Global Nerdy

The crowd at FacebookCamp Toronto 2.
Photo taken by Joseph Thornley — click it to see the original on its Flickr page.

And now, the last of my notes from yesterday’s FacebookCamp Toronto 2. If you missed the first two parts, follow the links below:

• Notes from FaceBookCamp Toronto 2, Part 1
• Notes from FaceBookCamp Toronto 2, Part 2

Monetizing your Facebook Application (Greg Thomson)

• What does he consider a “failed app”? “An app that has less than 10K active users”.
• What does he consider a success? An app with about 250,000 installs. With that, he says he “could go full time”.
• What’s an active user worth per year? “About $3”.
• “You can’t just throw one banner up and hope to make it.”

Case Study: “My Garden” App:

• Each flower was worth a certain number of coins
• Each user has an allotment of coins — extra coins had to be paid with cash
• The scheme to make money through coin sales didn’t work — “In my experience, users will generally not pay for things.”

• Across his apps — the big one being “My Aquarium” — the installed base progression was from 0 to 250,000 to 8 million installs across apps
• Did not add ads until his installed base hit the 250,000 mark, and he regrets that
• Why wait so long before adding advertising? He was worried that they might drive users away.
• This was not the case: users are used to ads
• There is a hidden upside to starting late: he didn’t get discouraged at the beginning when ad revenues would have been small.
• The money he’s making covers costs of servers “definitely starting to mount”
• “You really need large numbers to effectively monetize applications.”
• Some demographics:
  • 60% of the users generate of 90% of revenue
  • 30% generate zero revenue
  • The country breakdown of his users:
    • U.K.: 20%
    • U.S.: 20% — These users represent the best monetization opportunities — try to increase them!
    • Canada: 20%
    • Other countries: 40%

Revenue basics:

• Appsaholic (Social media) — pay per click — average $0.10/click
• Adsense (Google) — pay per click — average $0.07/click
• Adsense worked well with “My Garden”, since its theme tended to result in relevant ads — ads for florists and the like.
• Adsense didn’t work well for “My Aquarium”, since “people don’t really send each other fish” in real life, and the ads weren’t relevant.
• Incentivize your users to complete offers: give them rewards in exchange for their completing surveys, which generate revenue

Create a new want:

• Most of the popular applications are entertainment-based
• Revnues for apps go through a cycle: start / peak / decline / plateau
• One way to avoid or at least forestall plateaus is to cycle through ads — change them up often
• You have to keep putting new stuff up — both content and ads
• Change things! Vary the order of ads, or run slightly different ads — any variation helps!

What else?

• Cross-promote other apps in your app to generate new users — he does this
• In his experience — he can deliver 50,000 installs for other apps because of his user base
• If your app is a good fit, you have the opportunity to do custom advertising with large brands — such as the “Zombies” app, which got sponsored by Resident Evil
• Use A/B testing to maximize revenue — show 2 different variations of an ad — see which performs the best

Selling your app

• No major acquisitions just yet
• There was talk of the “Where I’ve Been” app getting bought, but it hasn’t happened yet
• Expect to get $1 per installed user or $10 per daily active user
• You should:
  • Have a base of banners
  • Build incentivizable offers
  • Get surveys through affiliate networks
• Note that a lot of offers are not incentivizable

• Up until a week and a half ago — all users on 1 app server and 1 DB server
• There are 10 rendering servers for Flash and jpegs

• What his time to market? “Keep it to a week. More than a week? The odds of failure go up dramatically.”
• How long to 250,000 users? “2 weeks”.
• How long to 8 million users? “Been doing this for 3 months now.”
• His operating costs? For servers — $2,500 a month

Secrets of PayPal interface used by Gift Cards Facebook Application (Steve Pritchard)

Background

• His “Gift Cards” application was a convergence of business opportunities:
  • He had a Toronto business associate with abundance of gift cards to give
  • Toronto has a high density of active Facebook users (remember, it’s the #2 Facebook city after London)
  • Obvious application fit for his business
• The application cried out for PayPal interface
• Wanted to offer a simple payment scheme
• Wanted to avoid complex HTTPS interactions
• “Challenged by the challenge”

Challenges

• PayPal data does not fit on Facebook Canvas
• Required pop-up window
• Had to be done with IFRAME; and the canvas and IFRAME cannot communicate
• PayPal pop-up window must have specified dimensions
• Have to update canvas under all PayPal termination conditions
• Had to sync 3 threads on 4 subsystems

Solutions

• Solution: Get user to click twice:
  • First click to start the PayPal/Facebook sync loop
  • Second click to open the PayPal pop-up window
• Gift Cards server mediates
• Again, a click-twice user interface:
  • First click to start Facebook canvas polling cycle
  • The canvas’ PayPal “checkout” button is replaced with an IFRAME version
  • Then, the intermediate step of asking user to confirm amount
  • Generates 2nd click

Q & A

• How long did it to develop? “I was learning Facebook, I was learning Paypal…so about a week.”

Ami Vora making her presentation. Image taken from Pink Internet Marketing.

Here’s part 2 of my notes from last night’s FacebookCamp Toronto 2 sessions. In case you missed part one, it’s here.

Building an App for Your Brand (Janice Diner and Michael Scissons, Segal Communications)

Segal Communications:

• What they do: “Create experiences that help companies build brands and generate sales”
• Showed video of Segal’s work:
  • Club kids
  • Hip hop soundtrack
  • Images of events and apps
  • Split it — testimonials

The advertiser’s view:

• Brands are either on Facebook or thinking about getting on Facebook
• They still get some calls along the lines of: “I want my ad put on people’s profiles”
• They work with brands to figure out “how to engage in this space”

Facebook applications

• Top 44 apps = 200M installations
• 16M daily active application users

Brands have these advertising options on Facebook:

• Sponsored stories
• Graphical ad units (a.k.a. “banners”)
• Sponsored groups
• Flyers
• Branded app dev

Estimates:

• 100s of millions of dollars have already been spent by brands on Facebook (source: eMarketer)
• It is expected that $1 billion will be spent by brands on Facebook by the end of 2009 (source: eMarketer)
• There are more than 41 million active Facebook users

Inroducing Janice: Creative Director

• She’s been “playing w/ brands on Facebook for close to a year”

Apps engage users in a number of ways, among them:

• Social experience
• Personal publishing

Branded apps they’ve worked on include:

• A “Rock Paper Scissors” game for Red Bull called Roshambull
• A political views survey for the Washington Post called The Compass
• A college roomate expense-sharing assistant for TD Canada Trust bank called Split It

Brand Social Network

• The idea is to link a brand to an experience that is social in nature
• How? By connect brands with Facebook’s social graph
• The hope is to create community of “brand ambassadors”

Brand opportunity

• Facebook presents a new opportunity to connect brands with consumers
• It may also present new revenue models

• There aren’t many branded apps yet
• Many are still in development

Red Bull’s Roshambull app:

• 360,000 installs
• For the day of October 6th, 7000 people played it
• “Our goal was to create an app that users would enjoy having on their profiles and would want to share with their friends”

Washington Post’s The Compass

• A “political compass”-style app

TD Canada Trust’s Split It

• Aimed at students, who have a hard time asking for/sharing money
• Allows students sharing a residence to track expenses and split bills on Facebook
• Launched August 2007, still looking to build user base

Brand apps get consumers talking:

• More and more companies will be designing their own Facebook apps
• Designing and spreading an app requires a unique set of skills
• Success requires a solid understanding of consumer needs and wants
• Segal: “Helping brands develop the ideal Facebook advertising solution”

Marketing Your Application Inside Facebook (Roy Pereira)

• At the last FacebookCamp Toronto, Facebook rep Megan Marks said that there were “at least 12 different touch points for your application inside Facebook”.
• What are these 12 ways?

Simple Advertising

• Banners
• Flyers (very cost-effective)
• Sponsored news stories
• Sponsored groups

Advertising in other applications

• Banners in applications
• Ads in profile box

Application Directory (“The boring way” / “Like going through the telephone book”)

• What you say in the description, the name of your app, the icon — all go a long way

Application “Add” Page

• Needs to be interesting
• Look at “Compare People” (interesting) vs. “Neighborhoods” (Not so interesting)

Profile Page

• Add the URLs for your apps in your profile’s “Web Sites” section

Status Updates

• Promote your app in your status updates: “X is happy about his Y application”

• Message Attachments — to wall or email
• Invite requests

Notifications

• Different from news feed
• Directed at a user

(External) Emails

• Probably going to be deprecated by Facebook

Mini-Feed (“By far the best way”)

• Mini-Feed is shown only on a user’s profile
• Mini-Feed does not have any view/post restrictions like Newsfeed
• Not too many apps publish to the Mini-Feed (publishStoryToUser vs. publishActionOfUser for newsfeeds)

Newsfeed — guess of what you want to see

• Newsfeed uses rules — is based on:
  • the actions your friends take
  • the privacy settings of everyone involved
• Send lots of feeds — use photos — make relevant to events that triggered them

Analyzing the Top Applications (Jesse Hirsch)

• Actually, don’t look just at the top, but the “mushy middle”
• Facebook is a “Social Operating System” — and as an emerging ecosystem, it needs diversity to survive and thrive
• When viewing your user base, consider “Total users” vs “Active users”
• Active users are those who touch your app every day
• The long tail still applies in the Facebook ecosystem — see O’Reilly’s active user drop off graph

Application Approach 1: Filling a Void

• These are apps that fill some kind of need not filled by any other Facebook feature of application
• They have “First past the post” momentum

Application Approach 2: Infectiousness

• Simple – Easy to understand
• Social – Involve action towards a friend
• Viral – Each action encourages a new user to repeat cycle
• Involve contests and competitions that reward participation

Application Approach 3: Exchanges and Expression

• With our friends, we engage in a shared daily narrative and collaborate on building a semi-public stage upon which to act out
• The same need drives blogging and LiveJournal

Application Approach 4: Integration and Enhancement

• Success often results from the relevance of the content for users in general as well as a balance when it comes to messaging and notification

Application Approach 5: Ratings, Reviews and Favorites

• Social hierarchy is important — an organizing principle — consider the “Top Friends” app
• Taxonomy or folksonomy adds layers of value

Successful apps are:

• Original – they are unique and useful
• Infections – they encourage social transfer and promotion
• Engaging – they facilitate ongoing use and acceptance
• Integrated – they have relevance and add value
• Empowering – they offer control and allow organization