Facebook has been encouraging developers to monetize their apps. They’ve recently gone so far as to create resources to help developers build business models around them.
One example of app monetization at work comes from the company Offerpal Media. This is a company that not only utilizes Facebook in its business model, but MySpace and other social networks as it enables both advertisers and developers to monetize apps.
Offerpal Media’s platform allows social networks, social applications, online games, virtual worlds and other social publishers to generate significant revenue by tapping into their virtual economies. Consumers can earn points or other types of virtual currency in exchange for targeted, relevant ad offers like free trials, big-brand discounts, online surveys, etc. The platform rotates over 2,000 advertising offers, and comes with real time optimization, web-based reporting and personalized account management.
“The whole platform is powered by a very sophisticated optimization engine that uses proprietary algorithms to target consumers based on user profile data, social behaviors and other factors,” CEO Anu Shukla tells me.
Exactly how do advertisers and developers benefit?
“Advertisers finally have a way to engage and interact with consumers on social web sites,” explains Shukla. “Despite the high engagement and activity levels on social web sites, CTRs and conversions on these sites have historically been among the lowest of any category online. However, we allow advertisers to truly engage with social networking consumers and to generate exceptional ROIs.”
“Social developers, meanwhile, have had a very difficult time trying to monetize their traffic with traditional advertising methods – CPM rates tend to be less than $1,” she says. “However, with our virtual currency-based platform, developers can generate eCPMs in the $150 – $200 range or higher. The use of virtual currency also allows them to deepen their user engagement and improve user loyalty and stickiness.”
Money in Apps
Offerpal recently received $15 million in funding. That is going to further development of the monetization platform and the creation of more tools and services.
“We will use the investment to add new products and services to our current platform as well as expanding into new platforms such as mobile,” Shukla tells me. “We’ll also expand more rapidly into international markets, build out our infrastructure for support, and grow into new markets.”
Clearly there is big money to be made in social media apps. Offerpal is one example proving this, and as advertisers scramble for the most bang from their marketing bucks, applications should probably not be ignored. I don’t think I have to tell anyone how popular Facebook is, not to mention mobile apps.
When asked about mobile versions, Shukla says Offerpal is currently in beta with their iPhone product. There will be one for Android and others “when the market is ready.”
