New York ad outfit sells widget advertising to brands

Social networks and their widgets are where many people want to spend time, instead of watching TV, listening to the radio, or even using other web sites. The challenge for brand advertisers, companies like Pepsi or Proctor & Gamble, is how to reach social network users.

Appssavvy is providing an important and still somewhat missing solution to the problem. The company isn’t a tech startup. It does direct ad sales for the large brand advertisers that it has close connections to, helping them to place ads in Facebook applications. This past week, the New York-based startup (and its large Madison Avenue rolodex), has been busy running around the San Francisco bay area and Silicon Valley, landing partnership deals with Facebook developers large and small.

First, Appssavvy is matching a client brand with Facebook applications that have users that are relevant to a brand. For example, an energy drink might be advertised in a Facebook gaming application.

Second, Appssavvy’s creative department is working with the brand advertiser and the matching application’s developers, to build campaigns specifically for the target users. These ad campaigns span applications and social networks — key partners include widget company RockYou and IM social network Meebo. It also plans to work with applications on other social networks.

The company provides banner advertising, and also works with developers to add custom features that somehow promote a campaign. Maybe an energy drink virtual object that you can consume to get extra points within a video game (I made that up). The company isn’t providing specific examples itself, but it also says that it will work with a brand and a developer to build custom applications, designed specifically to promote the brand. The company also says it will provide a range of “engagement” metrics to show advertisers how users interacted with their campaigns, but again, it’s not providing many details about its software for measuring data (for more on how various people define engagement, see this article).

More money for the application ecosystem

Appssavvy is comprised of people with experience in widget advertising. The founder, Chris Cunningham, was a senior sales guy for Freewebs (now the Social Gaming Network). The company’s president, Michael Burke, formerly worked in Yahoo’s advertising division. The company has raised an angle round, amount undisclosed from a number of “top media executives,” Burke and Cunningham tell me, in part to help them continue building relationships with advertisers.

In some sense, it is competing against a company like Federated Media, which has also been pairing brand advertisers with Facebook application developers (our coverage). In another sense, it is competing against the other Facebook ad networks — Social Media, Lookery, etc. I’ve also heard that Facebook is working on its own ad network for developers, including a video ad network (our coverage ). More generally, it is competing against traditional forms of media like TV, radio and print, and other web sites.

Most Facebook application developers with substantial traffic are happily making money from this variety of advertising efforts. But, Appssavvy is another startup that’s bringing more money to the ecosystem, which should spur further experimentation (and hopefully quality) among applications.

The big picture here is that Appssavvy is making an early move to tap brand advertisers — who both Appssavvy and many others tell me are hungry to figure out how to reach social network users, but recognize there are many unanswered questions about monetization (see this eMarketer report for more). As others have pointed out, Silicon Valley can be myopic in its ignorance of how to meet the needs of advertisers — to the detriment of its balance sheets.