Facebook, show us the money
With Facebook's heritage as a social network for students, it must be the perfect platform for advertisers hoping to penetrate the college campus, right? Wrong. According to a UK consultancy firm which specializes in student and graduate recruitment marketing, click through rates have been on the extremely low side -- 0.04% based on 1.4 million impressions -- leading the company to abandon Facebook ads for the foreseeable future. This isn't the first time we've heard of poor ad campaign results from marketers using Facebook.
With this in mind, I've been thinking more and more about how Facebook-only applications developed by third-parties will attempt to monetize their efforts. In Jawad Shuaib's recent guest post here on The Social Web, he talked about the challenges third-parties face trying to generate revenue from their apps, citing the prohibition of Javascript which makes it impossible to run Google Adsense or many other ad networks' code. His answer was affiliate links -- such as Amazon. That was a month ago, and things have already moved on.
fbExchange is a new venture from the team behind 30Boxes, and offers a link-exchange platform for third-part Facebook apps.
From GigaOm:
Rocherolle explains to us that it is an "in-app" ad network for the Facebook platform, and the system will allow f8 app owners easily exchange links in order to get more attention and traffic. They can also carve out some impressions for paid-placements instead of just plain vanilla ad-exchanges.
Fbexchange has already signed up apps ranging from Free Gifts to Slide which owns a bunch of Facebook apps including, Top Friends.
fbExchange works mainly on a points system: "Your app displays links to other apps and you collect credits when users click them. As you earn credits, other facebook apps will link back to you, sending new users your way!". So it doesn't really solve the problem of how to generate revenue -- though traditional text ads could easily be added -- but it does help with promotion.
Rafer left the following comment on GigaOm's original post about fbExchange:
Lookery, an ad network just for Facebook app publishers, is selling now and will be live in a week or so.
Interested parties can sign-up to be informed when the service goes live.
With the monetization infrastructure falling into place, the question remains whether Facebook apps can generate better click through rates and campaign results, than the traditional Facebook. One theory behind the poor results to-date, is that Facebook is about communication not content, and so users are too focused to click off-track. Many Facebook apps put sharing content at their center, so it may be they do slightly better.