I have a Facebook application that seems to be doing rather well – over 100k monthly active users after just two months, and gaining by about 1.5k every day. I’ve been toying with trying to monetize that in some way, and the most obvious way (that requires the least amount of effort) is to add banner advertisements.

This article series replaces my previous article, Advertising on Facebook – An Experiment, published in January. The information provided in the previous article will be provided in this series, but in a more organized, informative manner. That article is deprecated.

Social Media Advertising Networks

There are a handful of advertising networks that seem to be the top options available:

As of now, I have only experimented with SocialCash and SocialMedia, although I may expand the experiment to include others soon. SocialCash and SocialMedia seem to be the most popular choices of the above four, and SocialMedia has just raised an additional $6million in venture capital after coming out strong in 2008.

According to an article in Venture Beat, Social Media says it brought in between $15 and $20 million in revenue last year, mainly due to successful sales in the last six months.

A note about the ads

The types of ads offered by both SocialCash and SocialMedia tend to be what I consider a little deceptive. By that I mean many of them are engineered specifically to look like part of the application, and often use the application user’s name, photo and friend’s photos in the ad itself. SocialCash seems to be more guilty of this than SocialMedia, but both rely on similar tactics.

Ad by SocialCash

Ad by SocialCash

Some of the images in the above ad are profile photos from my friends Facebook profiles. This ad links to a mysterious Facebook app called Jamster Mobile Screensaver. I have no idea if this application is legit, and am not willing to sign-up and give it my mobile number to find out, but it feels fishy to me. Sort of reminds me of those “text L-O-S-E-R to shortcode 666666 for texts from hot girls” type of thing you see on TV at oh-my-god-o’clock in the morning.

Another sample ad by SocialCash

Another sample ad by SocialCash

And in this ad, also by SocialCash, the ad pulls in my profile photo and my name. The advertiser site you get to when you click on seems to be some sort of Scrabble-type game, which requires the user to download an Active-X component to play. While I have no justified reason to believe this is suspect, an ad linking to a site that requires a download rubs me the wrong way, big time.

Another ad-type I have seen from SocialCash is a similar-style ad that leads you to a “quiz” website. At the end of the “quiz”, the website asks for your mobile phone number (without really explaining why), and in small text at the bottom, informs the user that they will be billed $19.95 per month for this service – when they are not even particularly clear on what the service actually is.

Still another ad style I have seen from them is one that leads you to a website that when you try to leave, a javascript alertbox pops up informing the user that they are going to miss out if they close the window, and sometimes even spawns a new popup window after the user has confirmed they want the window to close. I have a real problem with these kinds of ads. They feel a lot like the malware sites that try to convince (windows) users that their computer is infected, and they have to download this software to clean it. The software is, of course, malware and will subject the installer to a variety of ills from keylogging to unpromoted ads.

I am absolutely not implying that the advertisers with SocialCash are promoting malware – just making the comparison in how that type of ad feels to me, someone who’s been around the Internet block for 15 years. That said, I received a troubling message from one of my application users today, which I will address later in this article.

In the SocialMedia ad below, you can see they’re not pulling in as many user details, but a less savvy application user might not recognize this as an ad, and may actually think that this “Valentines Cards” thing is somehow related to the application itself. On the possible upside, the destination website, MyFunCards.Com, does not seem to be a paid service and seems harmless enough, although I certainly cannot speak to their SPAM policies or what they do with people’s email addresses when you send or receive a card from them.

Ad by SocialMedia

Ad by SocialMedia

The Conundrum

My own personal feelings are that these types of ads are not entirely ethical. The problem is, they work – and their somewhat sneaky tactics are exactly why they work. Facebook users suffer from banner-blindness as much as any other web user, so your standard, run-of-the-mill banner ads just won’t get as high of a click-through rate. So before you begin, you need to ask yourself whether or not you can deal with your name being associated with advertisements that may not reflect your own ethics.

Ads that trick a user into clicking on them by making it seem like its part of the application functionality (“you have 1 new message!”) are deceptive. Offers that throw a javascript window alertbox when a user tries to close the advertisement page, asking if they are really sure they want to leave and miss out on xyz implements the same tactics that malware sites use. It just doesn’t feel right to me.

What SocialCash Had to Say

When I first signed up in January, I emailed SocialCash, expressing some concern over the types of ads being run. They replied with the following via email (in two separate emails, condensed for clarity):

Types of ads/offers.  One quick point on terminology:  “Ads” are the banners themselves; “offers” are what the user sees after clicking on an ad.  Your question seems to be on the offers.  We’ve been in the online marketing business since 2000 (on Facebook since early 2007) and advertisers range from large brands vying for app installs to tourism companies advertising discounted trips to Paris.   We display ads over 100+ countries.  In this range of advertisers is also mobile content, which provides users scheduled content on their mobile phone for a monthly fee.   This is a service many users enjoy worldwide[…]

[…]We’re in the process of upgrading our ads and you’ll see a change-over in the near term.  And like we said before, we have a wide mix of both ads and offers.  To fully understand the available options with advertising, we’d encourage you to do what most developers do and try multiple ad networks at once.  This is really the best way to learn the ins and outs of optimizing and monetization.  That experience also enables a great deal of choice for you on the whos, whats, wheres, etc. of advertisements within your applications.   There are tons of great resources out there!

An Additional Concern

As I mentioned earlier in the article, I received a troubling message from one of my application users today. I have emailed SocialCash about this, and expect to hear back from them tomorrow, but this situation was drastic enough for me to pull their ads from my application today. This is the message I received:

I like the app or at least a lot of my friends do.

However, in the last two days my anti-virus has been flagging up a malicious link on your start page. It appears to be a script that, if allowed to run, will capture key strokes and other info. I re-checked using Norton anti-virus (I use Avira anti-virus normally) and it also flagged the same script.

Avira warns me that ” functionalities include – but are not limited to – downloading trojans, link to other infected pages, spy the user or spoof the content of a banking site.

I replied back to this user immediately (for obvious reasons), and they replied again:

It happened in two different apps on FB who have the same ad server as you have at the top of your page – socialcash I think?

This, my friends, is a deal-breaker. If they do not have an adequate explanation for what happened, I will no longer be using SocialCash. Even if the advertiser/advertisement is not actually malware and was erroneously labeled as such, it is their responsibility to make sure something like this NEVER happens. With all the actual virus activity on Facebook, sometimes like this can ruin the reputation of an application – and once you lose the user’s trust, you WILL NOT GET IT BACK.

UPDATE: For more information on this issue, click here to read Part Three.

In the next article in the series, I show you my performance stats. Click here to go to Part Two!

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I’m a tech geek/dev/infosec-nerd/scuba diver/blacksmith/sword-fighter/crime fighter/ENTP/warcrafter/activist. I'm the CTO at Mass Mosaic and the CEO of Grokability, Inc. in San Diego, CA. Tweet at me @snipeyhead or read more...

  • Good to know, I was considering making some facebook applications but I can’t seem to bring myself to rejoin it again!

    I look forward to seeing what your results are. If you have good click thru rates, it might be an idea to sell your own ads. I’m sure you’d get a good rate for the numbers you’re getting already

    Andy Bailey’s last blog post..Leave Your Blog and Let CommentLuv Show You The Way

  • Good to know, I was considering making some facebook applications but I can’t seem to bring myself to rejoin it again!

    I look forward to seeing what your results are. If you have good click thru rates, it might be an idea to sell your own ads. I’m sure you’d get a good rate for the numbers you’re getting already

    Andy Bailey’s last blog post..Leave Your Blog and Let CommentLuv Show You The Way

  • Just an update – I just ran my totals as of this morning (so today mostly isn’t included.)

    I have earned $160 from SocialCash, and $90 from SocialMedia, for a total of $250 since I implemented it on the 7th of this month. I added SocialMedia a few days after SocialCash though, and the SocialMedia ads are at the bottom of the page, where the SocialCash ads are at the top. At this rate, it would be fair to assume $300 a month or more, but I will post another update on the 7th of Feb for a complete view.

    The stats reporting in SocialCash is much better than SocialMedia – SocialCash breaks down your view by day, where you only have pre-set date ranges for reporting in SocialMedia – kind of aggravating when you’re looking for side-by-side comparisons.

    I should also note that my monthly active users are now 96,000 for the Blow Kisses Facebook application – and I’ve added a new application with ads (although that one only has a few hundred monthly active users, as its only a week old.

  • Just an update – I just ran my totals as of this morning (so today mostly isn’t included.)

    I have earned $160 from SocialCash, and $90 from SocialMedia, for a total of $250 since I implemented it on the 7th of this month. I added SocialMedia a few days after SocialCash though, and the SocialMedia ads are at the bottom of the page, where the SocialCash ads are at the top. At this rate, it would be fair to assume $300 a month or more, but I will post another update on the 7th of Feb for a complete view.

    The stats reporting in SocialCash is much better than SocialMedia – SocialCash breaks down your view by day, where you only have pre-set date ranges for reporting in SocialMedia – kind of aggravating when you’re looking for side-by-side comparisons.

    I should also note that my monthly active users are now 96,000 for the Blow Kisses Facebook application – and I’ve added a new application with ads (although that one only has a few hundred monthly active users, as its only a week old.

  • Rahul

    Hi Snipe,

    Very useful data. I was curious about a couple of things. What was the click rate on the ads as a percentage of the daily impressions? How much do SocialCash and SocialMedia provide to the developer for each click?

    Thanks!
    rahul

  • Rahul

    Hi Snipe,

    Very useful data. I was curious about a couple of things. What was the click rate on the ads as a percentage of the daily impressions? How much do SocialCash and SocialMedia provide to the developer for each click?

    Thanks!
    rahul

  • Hi Rahul – that’s a good question… lol.. both SocialCash and SocialMedia don’t make it abundantly clear exactly how much publishers make, and I don’t think its necessarily a per-click thing. SocialCash at least sounds more like a per-buy-in from the user. This is what they wrote:

    Many of our advertisers take several days to report sales. This means that for the first few we days, we don’t know how much your app is earning. The flip side to this lag is that if you stop running ads with us, you will continue to earn money as sales are reported to us.

    Reliable data is only reached looking across a minimum number of impressions rather than days. This is typically over 150,000 impressions, but also depends largely on the placement of the ad, how the ads fit in the flow of your application, and your audience’s general engagement patterns. The same ad can yield widely varying click through rates and conversions based on these factors. We’re currently putting together some knowledge documents for developers on this front, so let us know if you’d like any guidance on these areas.

    This simply means that it will take a couple of days to see a reliable eCPM reading. You’ll find this to be the case with all other performance networks as well. (This is not true with “brand” networks that pay a fixed amount for every impression.)

    I actually plan on rewriting this article and making it a series to track progress. In the beginning, I didn’t really handle it properly, mixing and matching where ads were located, etc – so I’d like to continue this with a more stable data set. I wrote this the first week, and have learned a lot about both networks, trends in my own app, etc.

  • Hi Rahul – that’s a good question… lol.. both SocialCash and SocialMedia don’t make it abundantly clear exactly how much publishers make, and I don’t think its necessarily a per-click thing. SocialCash at least sounds more like a per-buy-in from the user. This is what they wrote:

    Many of our advertisers take several days to report sales. This means that for the first few we days, we don’t know how much your app is earning. The flip side to this lag is that if you stop running ads with us, you will continue to earn money as sales are reported to us.

    Reliable data is only reached looking across a minimum number of impressions rather than days. This is typically over 150,000 impressions, but also depends largely on the placement of the ad, how the ads fit in the flow of your application, and your audience’s general engagement patterns. The same ad can yield widely varying click through rates and conversions based on these factors. We’re currently putting together some knowledge documents for developers on this front, so let us know if you’d like any guidance on these areas.

    This simply means that it will take a couple of days to see a reliable eCPM reading. You’ll find this to be the case with all other performance networks as well. (This is not true with “brand” networks that pay a fixed amount for every impression.)

    I actually plan on rewriting this article and making it a series to track progress. In the beginning, I didn’t really handle it properly, mixing and matching where ads were located, etc – so I’d like to continue this with a more stable data set. I wrote this the first week, and have learned a lot about both networks, trends in my own app, etc.

  • Rahul

    Hi Snipe,

    Thanks for the response. That does shed some light on SocialCash’s methodology. Looking forward to reading more of your experiences! We are currently developing an Orkut application and will most likely develop something for FB in the future. Hence this is all very useful.

    rahul

  • Rahul

    Hi Snipe,

    Thanks for the response. That does shed some light on SocialCash’s methodology. Looking forward to reading more of your experiences! We are currently developing an Orkut application and will most likely develop something for FB in the future. Hence this is all very useful.

    rahul

  • Rahul – you’re very welcome 🙂 It took me a while to decide to sell out – er, I mean monetize – the apps, but I finally caved.

    One thing that’s interesting to me is that SocialCash and SocialMedia seem to have an inverse relationship – when I do particularly well on SocialMedia, its often the same day I do less well with SocialCash, and vice versa – which would make more sense if they shared the same ad positions, but they don’t. Curious, but I need more data to really make any sense of it. The fact that SocialMedia’s reporting kinda blows doesn’t help me to make sense of the numbers.

    The followups to this article will include screenshots of Facebook traffic + SocialMedia + SocialCash over time, which may help 🙂

  • Rahul – you’re very welcome 🙂 It took me a while to decide to sell out – er, I mean monetize – the apps, but I finally caved.

    One thing that’s interesting to me is that SocialCash and SocialMedia seem to have an inverse relationship – when I do particularly well on SocialMedia, its often the same day I do less well with SocialCash, and vice versa – which would make more sense if they shared the same ad positions, but they don’t. Curious, but I need more data to really make any sense of it. The fact that SocialMedia’s reporting kinda blows doesn’t help me to make sense of the numbers.

    The followups to this article will include screenshots of Facebook traffic + SocialMedia + SocialCash over time, which may help 🙂

  • Aaron

    This is by far the most informative article about ad networks for facebook apps I’ve seen so far. Thank you! I was actually volleying between socialcash & socialmedia based on what I’d read, but I never thought of trying them both. Perhaps I’ll give it a shot. Thanks!

  • Aaron

    This is by far the most informative article about ad networks for facebook apps I’ve seen so far. Thank you! I was actually volleying between socialcash & socialmedia based on what I’d read, but I never thought of trying them both. Perhaps I’ll give it a shot. Thanks!

  • Aaron

    Hello again. So, I went ahead and begun this week trying out using SocialCash & SocialMedia on my application just because I liked your results & thought I would give them a shot. It’s a new application, so I’m not yet expecting a great return mind you, but I had a question about SocialMedia in particular.

    First of all, both of the ads have been installed properly & are logging impressions and such. I installed SocialCash first & begun making money right away(first day). However, it’s been at least 4 days with SocialMedia & it still hasn’t logged a cent. It says I’ve had 431 impressions & 11 clicks, but the eCPM still shows as $0.00, as well as does the money earned. Even more troubling mind you is that when I click on the “Your Account” tab where you set up your paypal info & can make withdrawals and such, there is a banner at the top that says, “Your account balance is too low to run any campaigns. Add Funds to your account”, as if it wants me to give them money before they’ll give me money.

    Also, there is a feature on Socialmedia called “Social Currency” which when you add it, it tacks onto your existing ad something that gives you points when users complete an offer that turns into real money for you. Am I supposed to be doing this? It sounded weird, but I was wondering if this was why I wasn’t logging an money earned or if something else was the culprit.

    Thanks in advance!

  • Aaron

    Hello again. So, I went ahead and begun this week trying out using SocialCash & SocialMedia on my application just because I liked your results & thought I would give them a shot. It’s a new application, so I’m not yet expecting a great return mind you, but I had a question about SocialMedia in particular.

    First of all, both of the ads have been installed properly & are logging impressions and such. I installed SocialCash first & begun making money right away(first day). However, it’s been at least 4 days with SocialMedia & it still hasn’t logged a cent. It says I’ve had 431 impressions & 11 clicks, but the eCPM still shows as $0.00, as well as does the money earned. Even more troubling mind you is that when I click on the “Your Account” tab where you set up your paypal info & can make withdrawals and such, there is a banner at the top that says, “Your account balance is too low to run any campaigns. Add Funds to your account”, as if it wants me to give them money before they’ll give me money.

    Also, there is a feature on Socialmedia called “Social Currency” which when you add it, it tacks onto your existing ad something that gives you points when users complete an offer that turns into real money for you. Am I supposed to be doing this? It sounded weird, but I was wondering if this was why I wasn’t logging an money earned or if something else was the culprit.

    Thanks in advance!

  • Hi Aaron,

    How many monthly active users do you have on your application? Remember that most of these networks are performance-based, not just click-based, so the higher the traffic the better the odds of someone actually completing an offer.

    I believe SocialMedia has a mix of performance-based and other types of campaigns – but if you want to make sure it’s working properly, it might not be a bad idea to drop them a line. As your traffic increases, you’ll see better performance though. Remember that these numbers I’m getting are with 100k monthly active users.

    Don’t sweat the “your account balance is too low” bit – SocialMedia lets you choose to run ads on their network (as well as display them). That message is for people who want to advertise their products, service or apps within the SocialMedia network, and doesn’t pertain to folks who are just running ads.

    Social Currency is something different – I can probably best explain it with an example. I have an application called Cootie Shots, where people can send cooties to their friends. For every 15 cooties they send, they earn one cootie shot, with which they can cure themselves (or a friend) of cooties. Using Social Currency, I could say something like “earn extra cootie shots by clicking here” – where “here” is a special oage with offers they have to complete. The user earns more “cootie shots”, and I get a cut of the revenue from their completion of the offers. Does that make more sense?

  • Hi Aaron,

    How many monthly active users do you have on your application? Remember that most of these networks are performance-based, not just click-based, so the higher the traffic the better the odds of someone actually completing an offer.

    I believe SocialMedia has a mix of performance-based and other types of campaigns – but if you want to make sure it’s working properly, it might not be a bad idea to drop them a line. As your traffic increases, you’ll see better performance though. Remember that these numbers I’m getting are with 100k monthly active users.

    Don’t sweat the “your account balance is too low” bit – SocialMedia lets you choose to run ads on their network (as well as display them). That message is for people who want to advertise their products, service or apps within the SocialMedia network, and doesn’t pertain to folks who are just running ads.

    Social Currency is something different – I can probably best explain it with an example. I have an application called Cootie Shots, where people can send cooties to their friends. For every 15 cooties they send, they earn one cootie shot, with which they can cure themselves (or a friend) of cooties. Using Social Currency, I could say something like “earn extra cootie shots by clicking here” – where “here” is a special oage with offers they have to complete. The user earns more “cootie shots”, and I get a cut of the revenue from their completion of the offers. Does that make more sense?

  • By the way, I have decided to discontinue using SocialCash for now, for reasons explained in part three: http://www.snipe.net/2009/02/advertising-on-facebook-part-three/

  • By the way, I have decided to discontinue using SocialCash for now, for reasons explained in part three: http://www.snipe.net/2009/02/advertising-on-facebook-part-three/