The majority of this revenue has gone out to Facebook app developers, but the platform also supports applications running on OpenSocial. The money has been paid out to approximately 1000 developers that have used SocialMedia’s ad platform across 5000 applications (the money has not been evenly distributed, so it isn’t worthwhile to look at the average).

These figures may be encouraging to critics of Facebook’s development platform, who worry that applications can’t be easily monetized. During a talk at the Web 2.0 conference last April, members of an expert panel were predicting total revenues on the Facebook platform of as little as $10M this year - an amount that certainly wouldn’t be encouraging to the venture capital firms that have been pouring millions into some of these apps.

Around 20% of Facebook’s 29,000 applications have used SocialMedia to distribute ads (and contributed to the $8M total). While this is impressive, it only represents a fraction of the total revenue that’s being generated - clearly, there’s far more than $10 million to be had on these still-fledgling development platforms.

When users are at a specific location like home, work, restaurants, etc. they can use their cell phone to tag the location. The software then notes the position of your cell phone by "pinging" nearby cellular towers to get a relatively close approximation of the users location. In the future, when the user is at a "tagged" location, it displays that location in the user's profile to let their friends and colleagues know where their at.

When user's aren't at a tagged location, they show as "unknown" in their profile, so the user has complete control over what information is shared in their profile. You can even "go dark" to turn off your location reporting at any time as well. Since the app doesn't rely on GPS like other location-based services, it can be used by almost any phone. It looks like it's suited mainly for Blackberry and Windows Smartphone devices as per their website, but since any phone can ping cell towers to get a location, I'm sure i'll soon be available across the board.

Another feature is the ability to attach zip codes or address information to your tagged locations to allow your friends to easily find you once they know where your at. Great for on the spot meetings, etc.

I'm glad companies and developers are starting to develop apps and services using triangulation. It seems like such an untapped resource for location-based services only because it opens up the possibilities for almost any mobile device made.

What are the business prospects for iPhone applications compared to Facebook apps? There are some interesting comparisons to be made between the two on the types of apps, the revenue models, and virality.

"Useful" vs. Fun Apps

Web services seem to be polarizing between utilities and entertainment, as Alex Iskold notes. Both Facebook and iPhone are popular for games, but the iPhone has many more business/productivity apps. While Facebook has a few "useful" apps, comparing it to the iPhone platform clarifies for me why it will be hard to make it a place for useful apps. Unlike the iPhone platform, it was never designed for serious activity, it was built for communication, flirting and staying in touch. (Here are 10 useful Facebook apps.) The iPhone, like any smart phone or computer, is designed for productivity, in addition to entertainment. This is no judgement on fun vs. useful apps. But because of this, the iPhone will have more options for a range of applications than Facebook.

Who's Willing to Pay?

While the prices of iPhone apps are still in flux and the prices did seem high early on, it appears that free apps are decreasing in proportion and paid apps are increasing, according to Pinch Media. The common price point may end up forming around the 99 cent and $9.99.

People are clearly more willing to pay for apps on the iPhone than they are on Facebook. If you pay $200 to $600 for a phone, whats $5 or $10 more? The willingness to pay is a function of the platform. It's a higher end, higher price point market, which means in theory it will attract more developers. Social games for Facebook generate say $0.50 or $1 CPM compared to an app for the iPhone that could cost $10 to purchase, though granted the $10 game would require much more work to build. If Facebook's payment system or some undetermined new ad system proves a success, that could change things.

Advertising: Social-ness vs. Location-ness

Right now, advertising on social networks like Facebook is still a crapshoot for the most part. The best prospects are for social-related ads, which take advantage of the social graph on the site. Mobile ads are also still in the early stages of development. But they do offer one thing that ads on Facebook do not: location. Serving specific contextual or behavioral ads based on where someone is located would provide interesting options that PC-based social networks do not.

Virality: Friends, Friends, Friends

Facebook wins on virality, even with changes to its platform that have made gaining users not quite as easy. The downside for iPhone apps at least right now is there is not the kind of viral growth magic that you get on Facebook. This could change if and when developers come up with social networking apps that take advantage of the iPhone's specific benefits, such as location and touch screen.

Fred Wilson (who inspired this post) raises a related question: does being first on the iPhone matter as much as it did on Facebook? In other words will there be so much virality that those that get in first like Loopt, Yelp and Twitterific take leading positions that others will have a hard time challenging? I think because iPhone's virality is not as powerful as Facebook's later apps will still have a good opportunity on the iPhone.

It looks a lot cleaner and easy to navigate than the previous profile page. No more scrolling endlessly to find someone's wall among the vibrating hamsters, Traveler IQ and 'colour blind' tests. These are now neatly stowed away under tabs called 'applications' or 'boxes'.

While this adds to the user experience, I'm guessing not many people are actually going to click on these tabs, so the 'viral' spread of applications may soon be lost. Invites will obviously still help spread the word, but most people, myself included, ignore these without a second glance. It'll be interesting to see what implication this has, when I suspect we are already in the decline of the killer 'facebook app' era. I'm also intrigued as to what the ads will look like and where they will sit - nice big block of white space on the right?

All in all, the new profile page is definitely an improvement -cleaner, easier to navigate and improved usability with the (coming soon) ability to custom create additional tabs. There's only one problem - my face is bigger. Never a good thing.

Tuesday’s head on collision of the Toronto social media community saw a room full of eager developers and itchy marketers for the 4^th FacebookCampToronto / Facebook Developers Garage series.  We were introduced to the new platform changes that are coming about next week along with a quick demonstration on how to optimize Facebook advertising via targeting. 

Andrew Cherwenka of Trapeze presented on behalf of Facebook platform developers.  His most important comment about the “new” Facebook is that it will be simpler for the user.  New to the user interface will be a series of tabs at the top of the screen, “Creating a photos tab to handle the billions of photos was simply a priority.”  Other improvements include an info tab on your profile and the customizable newsfeed.  Now you can decide how important things are for your friends to see by changing the size of information on the Minifeed.   

First off it was great to come together and meet all the developers of new applications.  On display were some widely known applications like Mouse hunt, and the FedEx package as well as some up and comers like Refresh, Slangbook, and Praized.

In my opinion Facebook applications are like a sleeping giant. There are countless examples of rehashed ideas popping up with a slight tweak here or an adjustment there.  For example, Praized, one of the applications showcased looks like something that may catch on.  It utilizes user input to generate valuable knowledge for those who may be searching for pretty much any business.  Praized visually displays areas, buildings, establishments that much like Digg, or any online voting system, can be ranked.

We already have these review based consumer sites on the web, think Yelp.  Restaurantica has been running for years and has hundreds of thousands of reviews on restaurants.  What may push Praized to the forefront are two simple features.  One, it will rank any business and two it has social networking built in thanks to Facebook.  Imagine if Restaurantica had a personal profile to back the comments being submitted.  The social networking aspect of this App has strategically linked the confidence of ones own network of friends into an opinionated map of the city. 

Mouse hunt on one hand looks great.  Very visual and appealing but the skepticism remains as to how long people will continue to buy their virtual cheese.  Interesting none the less and here’s hoping the talent of the organization will push out more great applications in the months to come. 

[caption id="attachment_20" align="alignleft" width="300" caption="Speaking on Monetization"][/caption]

Monetizing the applications was the question of the night.  So what was the answer?  According to Rebecca Sawyer, Director of Monetization for Facebook, the best way to make money on your App was to buy advertising on Facebook to catapult the viral spread.  She stated upfront the presentation “was not a sales pitch,” but really what else could it be.  Here top five points were nothing new for advertising. Target your audience, write compelling headlines and copy, use multiple ads, then measure and optimize.  That strategy is the key to success not matter the medium.

 

 

However, if you are like most independent developers you have put all your dollars into development.  Most of this group is looking for the Holy Grail in the way of sponsorship. A relevant game can generate sponsorship like MGM’s recent sponsorship of the up and coming Flip Cup game to help promote the soon to be released movie College targeting youth.  The App is still a work in progress and the next round of improvements are set for August according to the brains behind it, Keith Canivet.       

[caption id="attachment_23" align="alignleft" width="300" caption="Tracking Your Success"][/caption]

If there was ever to be a killer App it may be thanks to the event sponsor Refresh Partners. Their new analytics tool claims to be able to provide aggregate demographics of App usage.  This measurement is going to help developers and marketers report back to clients on their success of integrating a brand into the social network.  But all of this is still in its infancy.  Apparently development of this was only two weeks.  Seems to be an awfully short development time for something of this magnitude (but then again I’m not a coder).  I am going to be keeping a close eye on this one to see what impact it has on this budding industry.

 

 

The most rewarding part of the night was seeing how eager everyone is to jump into this emerging market.  And coming from this blogger once companies learn how to integrate their brand with an application, release it in the right virtual market with a solid measuring system for ROI we will see more growth in major corporate spending. 

Stuart Dykstra with notes from Doug Watson

2. Twitter. I don't get it.  What's the appeal?  I don't want everyone to know what i'm doing  all the time, and I don't think anyone would care to know anyway.  I'm not being self effacing, i'm just keeping it real.  If you're my friend in real life, and you want to know what i'm doing, ask.  Even if you aren't my friend, I'd probably still tell you.  Unless I get a creepy vibe.

Anyway, Twitter.  Feel free to try and convince me to use it.  Really.  I know I give some people a hard time over certain techno-purchases and passtimes ("how is this neccesary?"), but I really want to hear the argument. 

3.   I still won't add a facebook application.  It's become a matter of principle now.  I'll admit, I added the bumper sticker application once when Jenn sent me something.  I knew she wouldn't send me a request unless it was worth it.  And it was. I laughed so hard my somach hurt.  Then I deleted it.  There's just nothing else I want from facebook.  I'm completely satisfied.

4.  Last weekend, I convinced my Dad to use Gmail.  I can't believe anyone uses anything besides Gmail really.  I think what sold him was when I showed him that I have several thousand emails stored, never need to delete anything and can search through every single email for the mere mention of anything.  I typed in his name and we pulled up every email we've exchanged since who-knows-when, then searched every time I've mentioned Connecticut in an email, and then every time the word "Unicorn" was mentioned (which, mind you, was way more often than you'd think) and that was enough.  I'd follow google into the dark.

5.   Holly used to always send me LOLcats.  Randomly if she saw one she'd think I'd like, or sharing them on her reader.   Now she's in Paris, and I never thought I'd say it but I kind of miss the LOLcats.

But not nearly as much as I miss her.

Wondering whether Facebook is the best place for serious, practical apps as opposed to, say, throwing sheep, I asked Stansislov to point out some serious Facebook applications. He quickly came up with a good list (I could quibble and say serious people would rather read RSS feeds in their feed reader, but I agree with most of them). He argues that developers would build more of them if the environment was well-suited for them. Maybe. If the site could be reorganized in a way that made it welcoming for these practical apps, then that's possible.

But another issue this raises is that doing that could pull apart the whole reason much of the giggly crowd comes to the site. Sixteen-year-olds don't go to Facebook to do serious things like check stock quotes or read the NYT. They come to communicate, view photos and "buy" their friends. If Facebook becomes known as a serious site, they could move on to Twitter or Flickr or MySpace or the next start-up. Is it possible to split off and create a "Facebook Adult"?

LinkedIn has a leg up on Facebook in this department. LinkedIn has opened up its platform for third party developers, though granted it's way behind Facebook. But if developers start to build banking, shopping, insurance, payroll, and investing apps on LinkedIn and Facebook (or even Facebook Adult), where would users rather use them?

Facebook app logo design concepts created this spring. Just a few fast trendy ideas.

My initial thoughts about the world of Facebook apps:

There’s a small (but noisy) subculture of young import-car aficionados in Portland. They tend to gather on weekends in parking lots with their Hondas and Mitsubishis etc. This subculture is broken up into three subgroups: people who don’t have cars, people who have flashy cars, and people who have good cars.

If we break out Facebook users into similar subgroups, I’d say most Facebook apps cater to the flashy-car people. That is, the apps are fun and look cool (like a giant spoiler or under-car neon) but they don’t really do anything useful. And just as you can buy all manner of pretty (but useless) ground effects from a massive number of vendors, you can trick out your Facebook profile with a million pointless apps. Unfortunately, the lifespan of most of those apps is pathetically brief—people quickly get bored of flashy things.

For a Facebook app to be useful and persistent in the Facebook experience, it needs to have a real-world result. If an app saves people time or money or helps them legitimately connect with friends, they will integrate it into their routine and recommend it to others. This is not “viral” but it is sustainable and potentially very profitable. So let’s make the app equivalent of a new performance chip or a 3-inch mandrel-bent exhaust, not the equivalent of Altezza lights or “Type R” decal.

Apparently I'm not the only person who hates the thousands of pointless facebook applications and also loves Billy Joel?
Sweet....

Now I want to introduce you guys to Jimbo! He's my nerdy Husky-Wolf. He likes coffee, and Steve Jobs (We have that in common), salad, and fish and chicken. He dislikes Bill gates, Windows, mail, and mean people (We have all of those in common).

So if you guys want, you can add me to facebook by going to my url here: Larry Moore; Salisbury, MD

But make sure to pet Jimbo!

If you are an admin of more than one fan page My Flickr will only let you add the application to one page and not multiple fan pages. I really hope that Facebook developers get on the ball with this because web marketing companies need these applications to make social marketing campaigns successful. I would even pay to have a good application with awesome functionality.

I can see it coming... As social marketing gets more popular on Facebook, developers will begin to charge for applications and they will kick ass and give us marketing folks what we need. I know I am very optimistic today.

Today I installed Youtube Box (you must register with Facebook and login to see link - BOO!) on Facebook for the Houston Zoo fan page and there as some grief but now the videos are on the fan page and not my profile. YAY. It works swell I just wish it was an austomatic feed.

If any of you web geeks would like to give more advice and share knowledge, please do leave a comment.

Comment on my previous post from Bill Erikson:

#5 - Yes, you can add applications to pages, but they must be specifically set up by the app developer to run on pages. Developers have the choice to allow their apps to be installed by users, pages, or both (it defaults to users). There are quite a few popular facebook page apps, like an RSS feed app.

The Facebook link from the library's homepage directs patrons to the Wendt Library Fanclub, a publicly accessible Facebook page. Oddly enough, this is not the same Facebook profile that the Myspace profile links to, and it does not contain a link to the other Facebook page or the Myspace profile, perhaps because these profiles are no longer kept up-to-date.

The Myspace profile is a bit dull, but it contains an interesting widget that its Myspace patrons can put on their profiles. The widget is an RSS feed of the Wendt Library Blog.

The widgets, or "applications," used on the Facebook fanpage are much more extensive and useful. The blog's RSS feed is included on the fanpage, as is a feed for news relating to MadCat, a Madison-only adaptation of WorldCat. WorldCat can be searched from the Facebook fanpage, through a WorldCat-developed widget that any Facebook user can add to their profile.

Also found on the fanpage is an application called "The Honesty Box," a widget that allows anyone to submit their honest opinion to the fanpage administrator anonymously. The Wendt Library obviously knows its stuff on Facebook---this is not an explicitly library-related application, but it is useful to libraries nonetheless.

The folks at the Wendt Library have done a great job of integrating the library into popular Web 2.0 tools. They should be careful about their abandoned profiles, though---once you create a public presence on a social networking site, you need to either update or remove the profile (Web 2.0's version of publish or perish). Otherwise, you run the risk of presenting yourself as useless and outdated, an image that library social networking sites are meant to discredit.

Some librarians are taking advantage of their spare time (what spare time?) to create applications for their patrons on Facebook. Hennepin County Library Catalog, Warwick U Library, and UIUC Library Search are only three examples of applications that allow users to search their library's catalogues directly from their own Facebook profiles.

Other librarians are developing broader applications that many libraries can participate in. For instance, the AskAway application can be added to any Facebook profile so that anyone can use AskAway's services from the Facebook interface.

Application developers are starting to borrow each other's designs. There is even a group for creating applications that connect Facebook users with their libraries, with over 2500 members. Libraries like Hennepin County Library and the others listed above are ahead of the game.

A list of good library-related Facebook applications can be found here.

As well as being appropriately fashionable for Myspace-savvy patrons, HCL's profile is downright useful! They have a search box for the Hennepin County Library catalog that can be searched from the HCL profile or from the users' own profiles. All they have to do is cut and paste a ready-made HTML code for the search box into their profile, which most Myspace users will be familiar with. Afterall, Myspace has a layout that allows its users to customize with HTML tags. The HCL catalogue search box can be added to a profile even more easily than a profile can be "Pimped," as the kids are saying these days.

The library not only has a page on Myspace, it also has a fanpage on Facebook, with 241 fans! The catalog search was transformed into an application on Facebook, so that users there can also add it to their profiles!

Hennepin County Library's official homepage has links to their Myspace and Facebook pages, but they are hard to find even if you know they exist. They seem to be hidden under "TeenLinks" and then "At Your Library." The library would probably benefit from better advertising on their main page. Myspace and Facebook users who are past their teens would probably not think to check the "Teens" section for HCL news that was relevant to them.

Overall, Hennepin County Library has done a great job of integrating itself into popular online communities. 1228 Myspace users can't be wrong!

Last week Facebook did something very strange to its best user...ahem, me.  I used a feature called wall-to wall, where one can view comments made between themselves and another, or between two friends.  While doing so, a message appeared that said something along the lines of "You are using this feature to spam and if you continue Facebook will delete your account."  Er, excuse me, spamming? By using a feature they created to increase users' stalking abilities?  And I'm not the only one.  My friend Meg was sending a message to a friend of her's last week and got a similar message.  So what's the deal?

- Mel Eddy

This kind of strategy may not be the wisest one for Facebook, as while trying to establish its position as the social network of the Internet, Facebook is dependend on co-operation of thousands of outside developers. If it keeps on stepping on application developers' toes, they most certainly will feel disencouraged to dedicate their time and money on something their partner may at any time make worthless.

If Facebook wishes to become truly an infrastuctural web service, they should dedicate themselves on developing their platform and creating such services that will enable the application developers to develope, market and monetize their services more easily. They could look for an example at Google, which has helped the monetization of online services hugely with their AdSense/AdWords-product.

It is enough for Facebook to have the basic working social infrastructure (however, finding friends easily may well be essential part of the infrastucture). The rest can be developed by outside developers - thus benefiting both the network and the developer.

i know from my experience clients are very keen to jump on the facebook wagon, and they think the easiest way to do this is create an application that users will add, but if we're to be completely honest here, apps have lost the novelty allure that got users to add them in the first place. this post i found on 3 Minds is a useful guide to what will and won't work. my reccommendation is simply: don't do it. there are a million apps out there now, and when my friends invite me to add the 'Which cupcake are you' quiz, i delete them, because facebook apps have become the new spam.

This shouldn't be a surprise...yet its interesting to me that Techcrunch devoted a full post to it. The only area where Slide should receive criticism is creating fake accounts (Adora SlideXX) to post fake reviews. Everyone whos involved in the Facebook app community clearly sees creators and networks positively commenting on their own products, and it's transparent enough that this shouldn't be a huge issue.

Plus, if 5 or 10 biased employee reviews can significantly sway the ratings of an app, how many unique users does that app have anyway? From my experience people don't install apps based on reviews, but rather on what's installed on friends' pages and specific recommendations from people they know well. So if Mayumi Toshida or Sohyen Claire Kim post a review and one of their close friends (let's say Donald) read and was influenced by the review, chances are that Donald had already been poked and prodded by Mayumi and Sohyen to install the app anyway.

Now on with the day...

Advertising on profile pages is certainly one effective way to do it. At this point, Facebook Applications probably aren’t. Despite a few exceptions such as this, most companies are not generating much user interaction with their applications. In fact, according to one Facebook executive, 98% of the 20,000 plus current applications have fewer than 100 users. That’s not the type of scale that most CPG companies are looking for.

This is an open-source platform that allows you to build social applications that are integrated with your own site and your facebook application.. It will also eventually be integrated with Open Social.

The really cool thing about it is that developers can create API's and markup tags (like the Facebook Markup Language) for their own applications. This means that that applications will be able to communicate with each other as well.

Three key points are:
1) Developers can develop and test their social applications on their own laptop using the Ringside, and then upload their applications to Facebook for deployment.
2) Facebook applications can run on any website and are not limited to running on Facebook.
3) New social applications can be developed and deployed on both your website and on Facebook simultaneously.

For the nerds among us, here is a high level diagram of the architecture:

What is the difference between a widget versus a Facebook application - and now a MySpace application? This question comes up a lot when working with our customer base and other peers in the industry. Widgets (and I am going to focus on web widgets here) are stand alone applications that are sharable and can run on any web page as long as you have an internet connection and a browser (I am sure someone will debate me on this - and in the Social Media Standards committee we are debating these same topics). The main thing to note here is that a widget can stand on its own inside or outside of Facebook or MySpace, but there are benefits to also tapping into what these platforms can offer as they can make your widget much more viral in how they are shared and spread in those environments. For this post, I am going to focus on Facebook as the newly launched MySpace apps are still maturing (and I spend a lot more time on Facebook than MySpace).

A Facebook application is an application that is registered on Facebook and can take advantage of all of the FB features that their platform supports (and keep it mind that it does not have to be a widget). For example, FB Apps have the following features:

So if you are a frequent Facebook user (like myself), then you have probably stumbled across all of these - even if you didn't know it. The interesting aspect of working with FB Apps is that there are a lot of variances to understand with respect to widget analytics. There are a few different things to be aware of:

1. FB has two different ways that a widget can be shared within FB - 1) "Add Application" from the application's canvas page and 2) natively grabbing the widget from another user's profile page. The former example is how the widget (or app - keep in mind that I am assuming that the app IS a widget) can be spread without using the sharing tools provided by the widget serving platform. The latter is completely dependent upon using the services of the widget serving platform. The result here is that the widget placement that gets the credit for spreading the widget is either going to be a centralized registered application - OR - a specific user's profile. The granularity between the two options can be critical if you as a marketer are trying to identify a power user who is causing your widget to get grabbed a lot.
2. Click to activate - just because your widget is being viewed each time a visitor views their profile page, does not mean that your widget analytics data is incrementing in lock step.  FB requires that the visitor "click to activate" the widget before it will load in the content and make outbound connections to send tracking data. Other social networks do not behave this way, so it is a critical nuance to be aware of when analyzing your widget metrics for Facebook.

Not all social networks are alike. In fact, you may find that the analytics reported for views of your widget will FAR EXCEED that of another network - yet the same two networks will show opposite trends for how often and how many times your widget is grabbed or spread.  In many cases, this is dependent on tapping into the "social graph" or lack of social graph of many of these networks.  Those that easily hook into your "friends" and invite them to join the same application (or widget) will generally behave different than just waiting for someone to grab your widget on a static page. Pros and cons to each.  The shrewd marketer will combine these efforts to build a marketing campaign that works effectively across all metrics - views, grabs and interactivity.

What are you noticing that is different between social networks?  Do you see behavior that is completely different from one site to another?  Segmentation is the key in understanding how to measure success in your widget campaign.  Different metrics will apply for different networks depending on their behavior.

Check out my favorite widget of the week - Clear Channel launched a new Jonas Brothers widget that promotes the band's songs, including a new release. Enjoy!