Ad network Social Media has been making some money with third-party applications on Facebook since around the time of the social network’s developer platform launch last May, but now things are starting to get better.
The Palo Alto and Mill Valley, Calif.-based company runs ads on these applications, and splits revenue with developers. It raised a venture round of funding from Charles River Ventures last fall. Now, it is starting to see more clients coming in, including large advertisers and their advertising budgets.
I recently sat down with Social Media co-founder and chief executive Seth Goldstein, to hear more about the company’s progress.
VentureBeat: So how valuable do you think advertising will be on social networks in 2008.
Seth Goldstein: Right now, everyone’s still experimenting. There’s lots of noise. Reporting metrics are all over the place.
I think advertising in social media will be distinguished by a focus on making ads as socially engaged as apps themselves. It’s a question of how to turn ads into endorsement opportunities.
Facebook itself is doing good experiments on social ads, like where you’ll see a picture of people who have installed an app. That’s the direction ads on social networks will take. It’s a question of how to turn ads into endorsement opp.
I’d say that in this next year there’s a $50 million market opportunity — besides what Facebook itself is doing. You’ll see a lot of it backloaded later in the year, like around November and December. Starting in September, you’ll see a lot of people’s hard work now pay off in the form of ad insertion orders and bigger ad budgets.
The entertainment industry may be a big provider — maybe 30-40 percent of the market. Travel ads will make a lot of sense, same with apparel brands, lifestyle brands, cosmetic brands, deodorant. Basically, any brand that wants to reach a younger audience, and isn’t relying on big, considered purchases. Other advertisers, like car manufacturers and financial services, might take longer to get on board.
VB: Social Media has been up and running since the launch of Facebook’s developer platform last May. What are some of the changes you’ve seen in advertising on Facebook?
SG: The evolution started with cost-per-install advertising last summer, where one app would include an ad for another app. [Note: If the ad resulted in the advertising app getting installed by a user, the app that ran the ad would get paid -- critics have called this a pyramid scheme]. Some of these ads were kinda legit, like the Microsoft Office “poke,” where companies could use one of the “poking” apps to sell branded pokes. Lots of people got business there.
November saw the first substantial money from lead generation — millions of dollars in total. Of course, you already see this working on the web all the time, with things like ads for free iPod giveaways in exchange for users filling out a survey. On Facebook, you saw it in areas like online education, dating, wireless services.
Now, the more progressive brands and agencies are starting to get much more focused on advertising on social networks. They’ve realized its not going a way — there was a time when people thought that social networks were just fads, but they’re not.
VB: What’s different about Social Media from other companies that sell advertising and provide data for applications on Facebook and other social networks?
SG: We’re the only network that works exclusively for independent developers. We don’t have our own apps [as opposed to companies like Slide, RockYou, Zynga and SGN, that have their own apps but also sell ads for third-parties].
Lets say you’re a company with both your own apps and you’re selling ads for others, and you get a big deal from Nissan. Where do you put it? Do you run the ad in your own apps first? I think there’s a structural conflict — although these are not bad businesses. I mean, in some sense Google has to manage this problem, as it provides ads on its own site and on other sites with Adsense.
Tags: co:social-media, people:seth-goldstein8 Comments
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WhatHappen said:
What ever happened to Root? Was atten.tv just a silly warm up before Social Media? Last question, what’s Seth’s opinion of Lookery?
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Ian Hendry said:
I was really interested to read Seth’s views. I believe that social networking will become more specialist as the media develops sites which appeal to specufic interest groups for such things as sports, business etc. I’m curious to know if Seth shares the shame view and what further advertising potential does greater specialisation bring…?
Ian Hendry
http://www.wecando.biz -
Andrew Fontanini said:
Having a player like Seth and Social Media highlight the points that were chosen speaks loudly for not only our companies vision, but the industry as a whole.
Reporting Metrics are still presenting challenging issues, but without a doubt are the key to the next stage in growth.
Contextual advertising, that engages and immerses the user/consumer, in their own conversation, is truly where things are headed.
The reality is every site needs to be mobilized, to allow true 2way open ended communication from the sites and pages to any mobile device anywhere.
Its about more stickiness (more ad-rev), a more sound form of brand awareness with allowing anyone to have their own form of “chat”, and giving the power back to the people. Its inevitable really, a new era is upon is.
The demographic that once though mobile phones were space-age, are now making the adoptable transition, with embracing technologies, interactions, and the advertisements that go hand in hand.
Its a beautiful thing.
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Charles Stuart said:
Hey haven’t you heard of Virtudex.com? Its the best Business Social Network Platform.
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Bryan Correll said:
Cause Charlies Stuart’s comment wasn’t an obviously shameless plug for his company… LOL
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Kevin Barenblat said:
Seth, thanks for mentioning Office Poke, an app [context] built to promote Microsoft Office 2007.
Note that we don’t sell sponsorships for this app though - the application is part of a viral social marketing campaign and is not something that was built to sell ads or sponsorship to other brands
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Oldext said:
Seth,
I hear your point about conflicts of interest, but who really cares anyway? If I come to your company with the ability to help you earn a higher ecpm and have less ads ‘unsold’ at the end of the month, I’m not sure you would care much what other apps I develop or sell. Take cubics.com for example. They made a decision to align themselves with Adknowledge.com a few months ago and were acquired primarily to be a part of a very large network of advertisers. They develop their own apps, but that isn’t stopping them from helping app publishers make money. I understand your need to set your company apart from the competition, but don’t oversell that point it’s not really that big of a deal.
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Saul M. Detofsky said:
Hello Seth,
TV is where it’s going. The largest social network in the entire world where the big players will and have spent big money on media. No guess work. The media buyers know where the couch potatoes are. Please visit my URL: http://letsmeetshow.com/. Let’s Meet TV Show has zero competition in the entire world. Television still reins supremacy over the Internet and will always out trump any website since it is reliable without all the extra costs like monthly Internet service, costly computer, hardware upgrades, PC repairs, high security risks and date rapes and related crimes from meeting Internet strangers.
The Let’s Meet TV Show would be the first and only interactive social meeting genre network on TV in the world even unparalleled by high tech Internet websites. The TV platform trumps the Internet since it has so many safety features built in that are only inherent on a public domain like TV.
Once the Let’s Meet TV Show is ready to be aired on TV it will shown on mobile content first one week before it gets aired on TV. It’s called First Choice because anyone who has it will get the pick of the litter / cream of the crop as they say. Men can view 1000 women and women can view 1000 Men or one can view both men and women or whatever you program your phone to do. Your company can make more profit on the phones plus make mega millions from The Let’s Meet TV Show.
I am looking for a smart company that realizes showcasing people in the public domain is much safer than the Internet and will be much more profitable since most honest people will want to be seen on TV. There are over two thousand dating sites on the Internet and not one is on TV where most people are viewing TV every day. Why is Match.Com, Chemistry and e-Harmony.Com spending over 430 million on TV media advertising? I want to go worldwide where ever there is electricity, mobile phones and televisions that’s why Let’s Meet TV Show will excel. TVs’ aren’t even necessary, only mobile phones! Call me (321) 751-6963 24/7.
Thank you,
Saul M. Detofsky
Copyright © 2006 THE LET’S MEET TV SHOW
Fred R. Price Literary-Talent Agency CA state licensed, recognized by -WGA-west
14044 Ventura Blvd. Suite201 Sherman Oaks, CA 91423 (818) 763-6365 and
the east coast associate agent is Saul M. Detofsky in Melbourne, FL (321) 751-6963
URL:http://letsmeetshow.com ROMANCE@LETSMEETSHOW.TV
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Copyright © 2006 Let’s Meet Show Registered - WGA-west # 1100090
Treatment: Meeting that someone special just got easier and safer too. Are you tired of the nightclub (bar scene), blind dates and all the less than truthful people that you have met on the Internet dating sites? There is an over whelming desire in all of us to seek out another human being since we all have a very strong biological necessity to meet people. “Let’s Meet” (LM) is the most innovative way to meet the most amount people in the shortest of time with creditability. TV viewers will come through word of mouth or just by default when they scan their remote between the long commercials. We will target radio and TV advertising to all conscientious parents and single women. All Parents want their children to be safe regardless of age. The strategy is to seek TV’s enormous platform, 120 million singles in the US. Everybody has a TV but not a PC. Women won’t hesitate to join LM because of all the many safety factors that are built in feature that is meant intimidate to deter crime. LM TV Show is like Americas Most Wanted Show but in reverse. Every woman will be given a special digital cell phone to call her date log which will record the time she leaves her home. Women are required to give the full itinerary of the date along with the contact # and name of the man she is meeting and a scheduled time for her to be home. The special locater cell phones use a digital code transmitter with priority Cat Tracking Software that only the FBI, local and state police have. The phone sends a digital signal and uses GPS tracking to cell towers to locate the exact location of a woman when she hasn’t reported back from a date on time. CAN YOU PUT A PRICE ON ONE’S SAFETY? All members will have a professional beauty make-over and photography in black tie evening attire against a white background. The TV audience will have their eyes glued to the television looking at eye candy presentation while enjoying beautiful romantic instrumental music like Moon River, Autumn Leaves, Misty, Theme from Summer Place and Days of Wine and Roses while enjoying their favorite beverage.
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