In part one of this series, we talked about your options – and possible concessions you may have to make if you opt to advertise on Facebook applications. Part two will discuss the returns I have seen so far based on my own applications, and the ad network’s payout schedule.

If you wandered in from Google and haven’t yet read the first article in the series, I strongly recommend it. There are some significant concerns discussed there that you may want to be aware of before implementing ads on your Facebook application.

A note on ad-blockers

For some reason, perhaps the url of the ad network sites themselves, the admin/reporting areas of SocialMedia (and Cubics, although I didn’t implement their ads) appear broken if you’re using AdBlock Pro for Firefox. The header images, and even some of your reporting tools, are being interpreted as advertisements, so they won’t display properly. The easiest way to deal with this is just to disable AdBlock Pro for the network domains giving you trouble.

picture-7

Disable AdBlock Pro per site

A Note on AdBlockers & Your Reporting Console

Of SocialCash and SocialMedia, SocialCash definitely has a better reporting console – at least for my purposes here, since they let you see a daily performance breakdown  at a glance, where SocialMedia only gives you a graph view overview, and you have to select specific dates from a single dropdown menu.

Again, if you’re using AdBlock Pro, the flash performance graph may not appear for you until you allow ads on the SocialMedia domain.

Day-by-day reporting may not be important to you, and I suspect it will be less important to me as time goes on and I have more overall data.

The Revenue Model

Neither SocialCash nor SocialMedia do a stellar job of explaining exactly what your ad revenue is based (per impressions, per click, etc.), however I sent an email to SocialCash, asking about the rather dramatic fluctuation in revenue from day to say. They replied back:

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.)

This leads me to believe that the revenue model is not based on impressions or even click-throughs, but instead based on user buy-in. The user adds the advertised application, subscribes to the advertiser’s service, etc – and you earn money. It’s been my experience that although you end up with fewer revenue points (since you’re requiring the user to buy-in, not just click), however the payoff is higher than a simple click-through based model.

Basically, since they’ve actually made a sale, they’ll pay higher per buy-in than they would for a simple click-through, which gives them no guarantee of actual revenue for their money spent.

I cannot find the model on the SocialMedia website, however I will confirm how their ad revenue is determined over the next few days and update this section. I suspect it is a similar model to SocialCash, based on the fluctuations in earnings.

Payouts

Both SocialCash and SocialMedia offer PayPal and a mailed check as a way to pay you your earnings.

According to an email reply from SocialCash, payouts happen mid-month and end-of-month, give or take a day or two. Payments are allegedly made automatically, once you have earned over $50. I say allegedly only because I haven’t been with them long enough to say for sure – guess I’ll find out this week.)

For SocialMedia, developers have the option of being paid on a weekly basis though PayPal or by check. This process can be automated. All payment requests must be made by 10pm Wednesday night to be paid out that coming Friday. All requests made after Weds 10pm will be paid out Friday of the next week. The minimum PayPal payout amount is $25.

My Results So Far

I set up ads on my Facebook application on January 5, and as of end of day February 1 – just over three weeks – I have made $404.97 – 206.26 from SocialCash, and $198.71 from SocialMedia. While these numbers seem close, there are two details that should be noted: I started with SocialMedia a few days after I started with SocialCash – and the SocialCash ad has the top banner position, while the SocialMedia ad is a footer banner.

Three weeks isn’t long enough to make any decisions written in stone, however the fact that SocialMedia is basically keeping pace with SocialCash, given the fact it had a later start and has an arguably much less prominent position on the page. Given the fact that their ads seem (slightly) less deceptive – and I haven’t had anyone reporting them for virus alerts on the application as I have with SocialCash (see previous article), I am strongly favoring SocialMedia over SocialCash at the moment.

At the beginning of January, when I first added advertisements, I had approximately 54k monthly active users. As of February 1, I have 103k monthly active users. I was expecting a sharp drop in engagement once advertisements were implemented, figuring a lot of people would opt to use a similar application that didn’t have advertisements – however that is clearly not the case.

Here are my Facebook Insights report for the application from the beginning of the application launch:

Monthly Stats Graph for Facebook Application

Monthly Stats Graph for Facebook Application from Dec

Notice there is no significant drop in user engagement during the week of January 6, just after advertisements were added.

And here are the stats starting when the advertisements were added:

Facebook Stats starting from January 7

Facebook Stats starting from January 7

One would think that the ad revenue graphs would be at least somewhat similar to the engagement graph, however I have found that this isn’t the case at all.

Here are my stats from SocialCash, by week:

SocialCash stats by week

SocialCash stats by week

At the week level, you can’t see exactly how volatile the ups and downs are, so here are the past two weeks:

SocialCash by week

SocialCash by week

SocialCash by week

SocialCash by week

Because the reporting options for SocialMedia are not as robust, I can’t provide the same overviews as easily, but this is my performance over time for SocialMedia.

SocialMedia stats since inception

SocialMedia stats since inception

Conclusion

This experiment continues – three weeks is definitely not long enough to speak definitively about advertisements on Facebook, which ad network is the right fit, and which one will give you the most bang for your application buck. So far, I’m leaning towards SocialMedia, for the reasons detailed in the first article and this one – and the fact that they seem to be able to hold their own with regard to revenue is a big plus.

I’ll keep you posted on future progress and statistics – and SocialCash got back to me regarding the virus alert some users were reporting – check out part three in the series to learn more about it, and why I won’t be using SocialCash anymore.

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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...

  • BAnders

    It’s called “Performance” advertising, where the advertiser only pays for measurable results. This is in contrast to CPM or CPC advertising, where the advertising pays per impression or click.

    http://en.wikipedia.org/wiki/Performance-based_advertising

  • BAnders

    It’s called “Performance” advertising, where the advertiser only pays for measurable results. This is in contrast to CPM or CPC advertising, where the advertising pays per impression or click.

    http://en.wikipedia.org/wiki/Performance-based_advertising

  • Yes, but I don’t believe SocialCash or SocialMedia use *only* that model.

  • Yes, but I don’t believe SocialCash or SocialMedia use *only* that model.