I recently wrote a post on SocialMedia Networks’ blog about the importance of creating user intent when developing a social application.  Creating user intent ensures that beyond getting a large number of installations of your social application and seeing it spread virally, that you’re creating a reason for people to use your application regularly. If people use your application regularly, you’ll increase the amount of advertising inventory you’ve got available to sell to social advertising networks and therefore increase the amount of revenue you can earn through advertising on your social applications. You can read the post here.

SocialMedia Netoworks just hit the 1000 mark, with over 1000 Facebook applications per day running on the Appsaholic network and making money for 3rd party developers.  Check out teh lates blog post I wrote on the topic at: SocialMedia Network’s Blog.

Check out the latest post I wrote on SocialMedia Network’s blog.  The post is an interview with Dennis Yu, SocialMedia’s resident SEO and advertising expert.  In it, Dennis explains the basics of social advertising, especially as it relates to SocialMedia Network’s Appsaholic.

Check out the new blog post I wrote for SocialMedia Networks about social advertising.

I just published a new post at SocialMedia Network’s blog.  Check it out!

Yesterday, I started a 2 month, part-time consulting gig with SocialMedia Networks, a leading provider of social network services including a large and growing network of applications across Social Networking platforms.  SocialMedia’s flagship product, Appsaholic, currently available on Facebook and MySpace makes it easy for independent software vendors (ISVs) to manage, market, and monetize the applications they distribute online. In other words, SocialMedia helps developers buy and sell advertising space inside their application, cross promote their applications, and more.

A couple of weeks ago, SocialMedia announced that it secured Series A financing of $3.5 million. The investment was led by Charles River Ventures, with additional investors including: Marc Andreessen, co-founder of Netscape and Jeff Clavier, founder and managing partner of SoftTech VC.

In the next couple of months, I’ll be getting Developer Relations up and running, writing the company blog (which is very good already), and working closely with Julia French from Covered Communications, who I’ve been working with over the last several months on marketing and business development projects for other clients.

If you’re a developer on the SocialMedia Network or are interested in joining, please drop me a line to introduce yourself!  And, check out SocialMedia’s blog
in the next few days (I’ll post a link on my vox blog when I do my first post).

Tonight is the first chance I’ve had to write about the Facebook Developer/ Influencer conference that I went to last week.  The event was an invite-only afternoon of panel discussions hosted by Seth Goldstein of SocialMedia.  Attendees included about 50 developers, entrepreneurs, investors, and a couple of bloggers, and the discussions ranged from “When, if ever, will Facebook start ‘taking back’ core chunks of its platform?” to “What metrics really matter for gauging success on the Facebook platform?”

The conference began at Noon with lunch and networking followed by the first panel discussion at 12:30: “What is Engagement and why is it so important?” In the first session, Dave McClure from 500 Hats and Seth Goldstein  set the stage for the rest of the event.  Dave emphasized the importance of establishing more meaningful metrics for measuring the success of Facebook apps – beyond counting user installs.  His point was well taken… Clearly we need a way of measuring user engagement in apps, especially given that people are often compelled to download apps that their friends send to them and never use them again.  Just because an app has great word of mouth success initially, doesn’t mean that it will latch on for the long haul.  Similarly, time spent on the app isn’t the right measure for success either.  As Seth asked (and I’m paraphrasing), ‘What’s a more important to Facebook’s success- a graffiti app that allows Facebook users to draw for 3 hours, or an application that encourages shorter but more frequent interactions?’

Rumor has it that Facebook will be unearthing at least a few 3rd party app success metrics internally in the next couple of month, but it remains to be seen whether they’ll share this information with the world.  So far, Facebook hasn’t released any helpful metrics for measuring user engagement on apps.  Perhaps this is because they don’t have them, or perhaps they’re holding their cards close to the vest in the hopes of determining the best way to move forward (i.e. by taking back parts of the API they already opened and/or extending new Facebook features that leverage lessons learned by observing user engagement stats on leading apps).  Either way, in order for the 3rd party developer community to flourish on Facebook,  developers will need a better understanding of what makes a winning app and which apps are the most successful based on those metrics.

The next session of the day was about “Creating, Spreading and Scaling Multi Million User Facebook Apps.” The all-developer panel included:

• R. Tyler Ballance from Slide,
  
• Blake Commagere of Vampires / Zombies / Causes,
  
• Dave Genztel from SocialMedia,
  
• Jia Shen from RockYou,
  
• Joe Winterhalter and his colleague, Eric (didn’t catch his last name), of Quizzes and
  
• James Hong from Hot or Not.
  

Slide had over 10 million Facebook users at the time of the conference, and Tyler initiated the conversation by talking about what he thinks users want to do with their friends.  In cases where users have a large number of Facebook ‘friends’ (Tyler had a whopping 630 at the time), Tyler felt it was important to be able to quickly engage with lots of people, while having the option to more intimately engage with closer ‘friends’.   He attributed the success of applications like Happy Hour, which allows users to send virtual drinks to their ‘friends’, to this very phenomenon.  Dave Gentzel from SocialMedia, who developed apps like Happy Hour and Food Fight, agreed that user engagement is key.  In addition, he felt that speed in development was a key component of success.  Anything that’s taken him longer than 2 days to develop hasn’t paid off.

Tyler also brought up the issue of Facebook’s need to communicate more proactively and effectively with Developers.  He and others expressed concerns that Facebook had made some code changes without talking to developers in recent weeks, which resulted in killing thousands of profiles within Slide’s database alone.  Generally, the developer panelists felt that Facebook’s attempts to help a large number of small developers may unintentionally hurt larger developers.  As I’ve mentioned in previous blogs, I’m a huge proponent of investing in developer relations.  When you allow ISVs/ developers (at least large ones) to plug into your API, you should be treat them as strategic alliance partners and give them insight into what you’re planning in exchange for quality assurances.  If you don’t, you run the risk of alienating thousands of your users if/when something goes wrong with the apps that plug into your platform.

Blake Commagere, who helped develop popular facebook apps like Causes went on to talk more about developing Facebook apps.  It took 4 engineers to develop the Causes app (which was written in Ruby on Rails).  Blake pointed out that to develop a successful Facebook app, you don’t need 100 app servers, you just need to make sure the app and database are solid.  By way of example, Causes runs using 11 app servers, which serve 2.5 million users, and it is working well.  Joe and Eric who developed Quizzes, only use 4 servers for their app.  They emphasize the importance of focusing on app quality and investing time in apps that will grow spread quickly virally.

All of the developers mentioned that that Facebook platform is a little sluggish at times.  James Hong from Hot or Not said that to combat delays, his team opted for using Ajax.  The challenge here is that most ad networks don’t currently consider user action as the way by which advertisers pay for ads. Instead, it’s still page changes.  In principle, the ad networks James knows say they’re happy to move towards a user action model, but in the meantime, there are monetary disadvantages to using Ajax on Facebook.  But, most of the panelists seemed okay with the tradeoffs in the short-term because they increase user engagement long-term.  At the time, Hot or Not is apparently making $1000/day off of AdSense, and rumor has it (according to a member of the audience) that Graffiti is making $100,000 month!

Ads were a hot topic on all panels – including the developer panel – with the need for relevant content delivery emerging as a key theme.  Most of the developers on the panel said they’d been approached to do demographic based behavioral targeting of users.  What I found interesting is that the only data anyone would cop to hearing advertisers request is: sex and geography.  If this panel was any indication, for all of those personalization fans out there (of which I’m one), it looks like we’re a ways off from seeing any meaningful movement in this space.

The 2pm panel was on “Facebook Advertising Models.”  Panelists were:

• Aryeh Goldsmith (Acebucks)
• Sourabh Niyogi (Appsaholic)
• Scott Rafer (Lookery)
• Narendra Rocherolle (fbExchange)
• Matt Sanchez (VideoEgg)
• Sundeep Ahuja (Appfuel)

Perhaps the most interesting part of this panel was how so many people are attempting to create ad networks on Facebook.   Matt Sanchez from VideoEgg says he has 20 sales people selling in 4 countries.  Aryeh Goldsmith is creating a new Facebook economy and customer loyalty company by introducing a fake currency to Facebook called Acebucks.  At best, the currency takes off and does just what Linden Dollars are doing for SecondLife.  Appsaholic is hoping to become a fully independent monitor of Facebook Stats (think the AC Nielsen of Facebook).  While, Slide wants to be the “single largest content delivery platform to unique users” across all social media OSes.

How useful are Facebook users to developers and advertisers?  The final session addressed “How to Value Facebook Apps.”  The panelists were:

• Eve Phillips, (Greylock)
• Keith Rabois, (Slide)
• Naval Ravikant, (Hitforge)
• Angela Strange, (Bay Partners’ AppFactory)
• Susan Wu, (Charles River Ventures)

One VC in the audience reckoned that each Facebook user is worth about $500 each.  While, Angela Strange from Bay Partners, whose AppFactory is actively seeking investments in start-ups that make Facebook applications, used a guideline of 25-30 cents per user per app.  In watching this last panel and listening to the excitement relayed through the questions from the crowd and VC responses, it’s clear that there are a lot of people pinning their hopes on Facebook (and other Social Media Platforms) continuing to open their APIs and thus encouraging the growth of a new developer economy that pushes apps for so-called social media operating systems.  There is a frenzy of enthusiasm about the potential, but it remains to be seen whether potential becomes reality.  The VCs aren’t taking any chances.  Each of the panelists said that when they’re looking to invest in a company that develops Facebook apps, they need to see the potential of those applications beyond the confines of Facebook.

For those of you interested in future developments in the Facebook space, Dave McClure mentioned that he’s planning a Facebook conference of his own on October 7-9. Stay tuned to his blog for details.

The Financial Times reports today that Central Office of Information (COI), the UK Government’s “center of excellence for marketing and communications,” has put a moratorium on advertising on social media sites like Facebook.   COI organizes marketing campaigns to promote issues of public importance (education, health, welfare, etc.) for various UK Government departments.  The organization announced that it is reviewing how it handles advertising on social networking sites fearing that its ads could appear on innapropriate user generated sites.  Alan Bishop, chief executive of the COI, explained the decision to the FT saying:

“We always have to keep a very close eye on the context. People are still getting to grips with this. We don’t want to exclude the use of any of the new social media but we do have to have a very clear idea of what the context is going to be like.”

COI’s decision comes one week after New Media Age reported that Vodafone, The AA, First Direct, and others were pulling their ads on Facebook because they appeared on the Facebook page of the British National Party, a highly controversial political organization.  Last week, Vodafone released a statement saying:

“We advertise our products and services across a wide range of on and offline publications… In the case of online, bundles of space are purchased across a number of sites including the social networking sites. As a result we were not aware that a Vodafone ad would appear next to a British National Party group on Facebook.

Our Public Policy Principles state that we do not make political donations or support particular party political interests and therefore to avoid misunderstandings we immediately withdrew our adverting as soon as this was brought to our attention.

We are working with our media buyer OMD to ensure that more robust controls are in place before we agree to any potential re-investment,” the statement added.”

The concerns raised by organizations like COI and Vodafone are understandable and highlight the need advertisers to have greater control over when and where their paid ads appear.  As far as I’m aware, thus far, website optimization solutions and content delivery platforms are only helping advertisers and marketers understand visitor behavior, segment visitors into groups, and deliver targeted messages that are relevant to specific segments. I’m not aware of any optimization solutions or content delivery platforms that helping advertisers optimize ads and website content so that they’re not only relevant to various segments of website visitors but that they’re also blocked from appearing on pages that promote or discuss controversial topics.  I’m interested to see who will be the first to make this happen.

Marketers can already test and optimize ads and web content so that relevant messages are delivered to different audiences i.e. (Audience segment A “High value customers” sees Ad #1, Audience segment B “First time visitor” sees Ad #2, etc.).  Similarly, search technology makes it easy to identify controversial key words on web pages (i.e. “BNP,” “Political Party,” etc.). I can’t imagine that it would be too difficult to combine these two technologies to create an ad optimization and delivery network that allows advertisers to deliver blank ads on social media pages that have potentially dubious content, or ‘sublease’ that ad space on controversial social media pages to less discerning advertisers.

Instead of simply segmenting users, the ad publishing optimization solution I’d like to see would also segment content.  The ad delivery platform would scan social media pages at regular intervals for controversial words.  If dubious words or phrases that go against a given advertiser’s rules of engagement appear, the ad slot could display nothing at all or an ad from another, less discriminating advertiser, who subleases the ad space in cases where the primary advertisers chooses to bow out.  Having a solution like this would allow social media platforms like Facebook to offer a two-tiered advertising platform that offers the ultimate control to Tier 1 advertisers who are willing to pay for it and exposure to Tier 2 advertisers with a smaller budget.

Could this work?  Post a comment with your opinion.

The Financial Times reports today that Central Office of Information (COI), the UK Government’s “center of excellence for marketing and communications,” has put a moratorium on advertising on social media sites like Facebook.   COI organizes marketing campaigns to promote issues of public importance (education, health, welfare, etc.) for various UK Government departments.  The organization announced that it is reviewing how it handles advertising on social networking sites fearing that its ads could appear on inappropriate user generated sites.  Alan Bishop, chief executive of the COI, explained the decision to the FT saying:

“We always have to keep a very close eye on the context. People are still getting to grips with this. We don’t want to exclude the use of any of the new social media but we do have to have a very clear idea of what the context is going to be like.”

COI’s decision comes one week after New Media Age reported that Vodafone, The AA, First Direct, and others were pulling their ads on Facebook because they appeared on the Facebook page of the British National Party, a highly controversial political organization.  Last week, Vodafone released a statement saying:

“We advertise our products and services across a wide range of on and offline publications… In the case of online, bundles of space are purchased across a number of sites including the social networking sites. As a result we were not aware that a Vodafone ad would appear next to a British National Party group on Facebook.

Our Public Policy Principles state that we do not make political donations or support particular party political interests and therefore to avoid misunderstandings we immediately withdrew our adverting as soon as this was brought to our attention.

We are working with our media buyer OMD to ensure that more robust controls are in place before we agree to any potential re-investment,” the statement added.”

The concerns raised by organizations like COI and Vodafone are understandable and highlight the need advertisers to have greater control over when and where their paid ads appear.  As far as I’m aware, thus far, website optimization solutions and content delivery platforms are only helping advertisers and marketers understand visitor behavior, segment visitors into groups, and deliver targeted messages that are relevant to specific segments. I’m not aware of any optimization solutions or content delivery platforms that helping advertisers optimize ads and website content so that they’re not only relevant to various segments of website visitors but that they’re also blocked from appearing on pages that promote or discuss controversial topics.  I’m interested to see who will be the first to make this happen.

Marketers can already test and optimize ads and web content so that relevant messages are delivered to different audiences i.e. (Audience segment A “High value customers” sees Ad #1, Audience segment B “First time visitor” sees Ad #2, etc.).  Similarly, search technology makes it easy to identify controversial key words on web pages (i.e. “BNP,” “Political Party,” etc.). I can’t imagine that it would be too difficult to combine these two technologies to create an ad optimization and delivery network that allows advertisers to deliver blank ads on social media pages that have potentially dubious content, or ‘sublease’ that ad space on controversial social media pages to less discerning advertisers.

Instead of simply segmenting users, the ad publishing optimization solution I’d like to see would also segment content.  The ad delivery platform would scan social media pages at regular intervals for controversial words.  If dubious words or phrases that go against a given advertiser’s rules of engagement appear, the ad slot could display nothing at all or an ad from another, less discriminating advertiser, who subleases the ad space in cases where the primary advertisers chooses to bow out.  Having a solution like this would allow social media platforms like Facebook to offer a two-tiered advertising platform that offers the ultimate control to Tier 1 advertisers who are willing to pay for it and exposure to Tier 2 advertisers with a smaller budget.

Could this work?  Post a comment with your opinion, and if you don’t have a Vox account, email me with your comment, and I’ll post it manually.

Italy-based social networking company, Dada S.p.A., is partnering with Google AdSense to pay users for allowing ads on their space.  Dada’s new Friend$ is an opt-in revenue sharing program that rewards users for adding friends and updating the content of their Dada space.  According to Dada, Friend$ is, “the only program that rewards you both for keeping your personal space updated (blog, video, profile, etc.) and for spreading the word by inviting friends to do the same.” The idea is that users keep their Dada space updated and invite friends to participate in Friend$.  In exchange, Google posts ads on their site/friends site, and pays users and their friends a percentage of the money generated by click-through on those ads.

I wonder how advertisers feel about this? It seems like an easy system for Dada users and their friends to exploit for revenue purposes.  If I were an advertiser, I’m not sure how excited I’d be by having people click on my ad with the express purpose of extorting me for their own/ friends’ financial well being.

Similarly, I find this whole concept a little disconcerting in that it encourages social networkers to talk about specific topics for the express purpose of generating revenue.  I feel perfectly okay about the idea of hiring paid spokespeople to talk about companies, so long as the public knows that they’re being paid.  However, I take issue with situations like this, where there are blurred lines of distinction between people talking about what they’re genuinely interested in versus talking about things they’re being paid to discuss.  It’s not Dada and Google are talking about sponsoring corporate blogs…  In a way, they’re steering kids (and adults) towards discussing specific topics their conversations, blogs, profiles, etc.  If a social networker wants to make money through Friend$, and they know which companies use Google AdSense, I suspect that it will be very easy for them to exploit the system.

What do you think?