Graphing Social: Seth Goldstein on apvertising

SocialMedia.com is an app network

apsaholic allows you to track the success of yoru ap vs. your peers

evolution of online advertising

1997 websites

  • rise of internet agencies
  • first brand sites (duracell.com)
  • early advertising expiraments (dilbert steals Yahoo’s Y)

1998 display advertising

  • evmergence of IAB
  • standard ad models

2000 contextual rising

  • intiated by overture, dominated by google

2002 contextual ruling

  • adsense
  • kanoodle

2004 advertising exchanges

  • right media
  • advertising.com

2005 lead generators

  • lowermybills
  • adteractive
  • nexlag

2006 behavioral advertising

  • tacoda
  • bluelithium
  • revenue science

2008- Social Advertising?

  • Dave Morin “always include the social context”
  • benefits
    • users- less annoying, more relevent
    • advertisers: more targeted, hihger ROI, ability to reach “influencers”
    • developers: higher eCPM, less wasted inventory, ability to keep users engaged on app

Case Study: FoodFight

many aps: the throw aps. taking poke and wrapping it wiht something more specific. thowing cavier at one thing, and a chicken head at another expresses yourself better
You throw things to earn more “lunch money” to get more things to throw at people- self promoting. you can create things to be thrown to make “money”
cross promotion on other aps

Social ads: send flowers. you can suggest flowers for a specific person in your graph. you know birthdays,, can suggest gifts from red envelope. feels less sneaky, since all information is up front.

Flufffriends, et al, have virtual currencies, which drives benefits. video game behaviors engineered into aps. allows for leveling up.

market research is a huge opportunity on facebook, especially if it can be fed back into ads.

QUESTIONS
Q: they are collecting lots of data, what are security/privacy
A: collected directly, help privately. But what shocked me about the facebook audience is how willing they are to share information, e.g. early on they added “pile of poop” to things you could throw. it cost $20 to throw… people were wildly willing to give information about themselves just to throw poop. you can’t always protect people form themselves, you can only make it clear what you are doing with the information.

Q: at what point will advertisers be able to target datapoints?
A: later in the year.  we realized early on there are only a few folks who can dominate, but we can help the little guys.

Q: do you see a merging of virtual currencies?
A: that’s a great idea. easy to say, hard to do. we may be able to provide a back office to help, you set the metaphors, we can feed in the questions, surveys, offers to earn money.

Q: what are the dangers of building a company entirely on one site– facebook
A: I like to think we are build on the front not the back of facebook, and there is a virtuous circle right now where everyone is helping each other. facebook could shut down, go closed, but i hope philosophically they have been walking the walk, and B other networks — google, mysace, tagged, yahoo and others– are now responding by trying to compete in the openness game. as soon as one guy opens up, before facebook closes up, openness wins and the game is over.

Q: What happens if facebook creates its own ad netowrk
A: there is no such thing as one ad network. if and when they come out with an ad network, it won’t put people out of business, they need all the various companies to have a flourishing ecosystem. they may choose to tax developers. that would be a good thing, you’d know where you stood.  

Q: somethign about valuation
A: appsaholic offers ability to see the bids, the questions, the CPM for aps. Setting value abstractly on aps is silly, the value of an ap is what someone will pay for.

Q: is selling poop a stable business model
A:   I prefer selling clicks and answers. People want to do things they can’t do in real life, but can’t. everyone wants to throw food at each other. boozmail. college kids can’t send drinks, they are underage.. is it sustainable? I’m not goign to do that, but kids in school, there is a rhyme and reason why they are using the aps. it doesn’t look like viacom. it doens’t look at a real media company, it looks silly. but engagement levels are out of control.

it’s pretty clear video game knowledge is going to be very applicable.