Bling Bling: Marketing and Monetizing Through Social Applications April 2008

Common Perceptions of Social Media “ You can’t make material money through social media” “ You can’t effectively promote yourself on social media”

“ You can’t make material money through social media”

“ You can’t effectively promote yourself on social media”

Who is RockYou? Most popular applications/widgets across Facebook, hi5, Bebo, Orkut and MySpace Over 700K RockYou apps installed daily and over 100 million apps live across social networks Over 16 million registered users Over 70 million monthly unique visitors across RockYou network Over 800M pageviews a month on RockYou apps and 2 billion pageviews per month across our ad network Our mission is to engage the world with social applications 2.0B 16M 100M 70M 700k

Most popular applications/widgets across Facebook, hi5, Bebo, Orkut and MySpace

Over 700K RockYou apps installed daily and over 100 million apps live across social networks

Over 16 million registered users

Over 70 million monthly unique visitors across RockYou network

Over 800M pageviews a month on RockYou apps and 2 billion pageviews per month across our ad network

Most Million User Applications across Social Networks

Successful Marketing on Social Media: Social Applications

Why? Potential for Social Apps is Exploding Wikipedia.org Alexa Global Traffic Rankings 1 2 3 4 5 6 7 8 9 10 2005 (U.K.) 2008 1 2 3 4 5 6 7 8 9 10

Source: eBay Investor Presentation, RockYou eBay starts Q2 98, PayPal starts Q1’00, Yahoo! starts Q1’95, AOL starts Q1’92, Facebook starts Q4’04, and RockYou Starts Q4’05 Facebook data represents active users, which was disclosed on 12/05 and 12/06. Undisclosed active user data is extrapolated by applying an average active user penetration to global Unique Visitors (per comScore Media Metrix) (2) Registered Users (MM) Viral Marketing is key to success

Source: eBay Investor Presentation, RockYou

eBay starts Q2 98, PayPal starts Q1’00, Yahoo! starts Q1’95, AOL starts Q1’92, Facebook starts Q4’04, and RockYou Starts Q4’05

Facebook data represents active users, which was disclosed on 12/05 and 12/06. Undisclosed active user data is extrapolated by applying an average active user penetration to global Unique Visitors (per comScore Media Metrix)

Key Takeaways for Viral Growth New User focus Simplicity Novelty Universal Applicability

New User focus

Simplicity

Novelty

Universal Applicability

Building Viral Engagement User 3. Indirect friends => focus on messaging Focus on messaging to invite/notification receivers to drive more friends invites Deliver increasing AND simply understood value to app w/ every friend invited (Zombies) 1. New users => build clean flows New users absolutely key to viral engagement (vs returning user) Focus on linear, one-action flows to maximize activation for new users Forget registration 2. Direct friends => deliver clear value prop Provide clear value proposition to new user for inviting friend network (Likeness) Ensure invitation is first/second step of new user flow to maximize viral value of user (Superlatives vs Superlatives) 4. Interested parties => allow universal use Enable simple tools (comments, ratings, answers) that allow interaction w/o requiring full engagement w/ application (My Questions) Direct Friends Indirect Friends Interested Parties

3. Indirect friends => focus on messaging

Focus on messaging to invite/notification receivers to drive more friends invites

Deliver increasing AND simply understood value to app w/ every friend invited (Zombies)

1. New users => build clean flows

New users absolutely key to viral engagement (vs returning user)

Focus on linear, one-action flows to maximize activation for new users

Forget registration

2. Direct friends => deliver clear value

prop

Provide clear value proposition to new user for inviting friend network (Likeness)

Ensure invitation is first/second step of new user flow to maximize viral value of user (Superlatives vs Superlatives)

4. Interested parties => allow universal use

Enable simple tools (comments, ratings, answers) that allow interaction w/o requiring full engagement w/ application (My Questions)

Marketing Opportunities with Social Applications Successful marketing for social media should focus on social applications: Application content integration Integrating brand or product as part of user experience Example: Likeness quiz, virtual gifts, greeting cards, virtual actions, etc Sponsorships or branding of applications App takeover or skinning w/ possible promotion Example: Skin application w/ sweepstakes or contest Custom social application building & distribution Build a social app for advertiser and/or distribute it through social network specific ad networks Example: Build, viral tune, launch, and seed an app recruiting users from RockYou’s leading ad network jumpstarting viral spread of app Rich Media

Successful marketing for social media should focus on social applications:

Application content integration

Integrating brand or product as part of user experience

Example: Likeness quiz, virtual gifts, greeting cards, virtual actions, etc

Sponsorships or branding of applications

App takeover or skinning w/ possible promotion

Example: Skin application w/ sweepstakes or contest

Custom social application building & distribution

Build a social app for advertiser and/or distribute it through social network specific ad networks

Example: Build, viral tune, launch, and seed an app recruiting users from RockYou’s leading ad network jumpstarting viral spread of app

Rich Media

Application Integration: Custom Advertiser Quiz Custom size pop-up w/ additional info appears upon mouse rollover on relevant quiz choice 646x90 banner clicks through to advertiser’s website Text link clicks through to advertiser’s website

Application Integration: Custom Advertiser Quiz Advertiser’s quiz promoted on Available Quizzes section throughout duration of campaign (100% SOV) Advertiser’s quiz featured and cycled through Brand New Quiz placement throughout duration of campaign

Application Integration: Viral Impact & Spread News Feed Mini-News Feed on Profile pages Profile box Notifications Email Message An advertiser’s custom Likeness quiz virally spreads through the a social network platform’s communication channels.

Application Integration: Sweeney Todd 0.01% CTR for banner alone 65x better 0.65% CTR with integration

Application Sponsorship Applications can be skinned or branded with prominent placement for an advertiser with additional opportunities for sweepstakes, contests, streaming video units, and other custom programs.

Applications can be skinned or branded with prominent placement for an advertiser with additional opportunities for sweepstakes, contests, streaming video units, and other custom programs.

Resident Evil: Extinction sponsored the popular Zombies app for 3 weeks leading up to the theatrical release and users could enter the sweepstakes to win a weekend trip to Vegas by ‘biting’ their friends. Application Sponsorship 100 x goal 10K expected 1M achieved

Resident Evil: Extinction sponsored the popular Zombies app for 3 weeks leading up to the theatrical release and users could enter the sweepstakes to win a weekend trip to Vegas by ‘biting’ their friends.

Application Integration & Application Takeovers Social Networks (1) Web (1) Average RockYou Ads Click-Through Rate Best RockYou Ad Campaigns (1) Business Week (2/7/2008)

Application Development and Promotion F rictionless: simple, less is more A udience: on Facebook for their friends C ommunication: integrate into the viral channels E ngagement: hook users to return regularly B usiness model: design with monetization in mind O bjective: establish goals and success metrics O bvious: make each page’s purpose clear K eep working: develop, test, repeat Some rules of thumb from Context Optional.

F rictionless: simple, less is more

A udience: on Facebook for their friends

C ommunication: integrate into the viral channels

E ngagement: hook users to return regularly

B usiness model: design with monetization in mind

O bjective: establish goals and success metrics

O bvious: make each page’s purpose clear

K eep working: develop, test, repeat

Application Development and Promotion Over two months since launch, over 250K users have sent over 2M branded pokes generating tens of millions of branded impressions.

Over two months since launch, over 250K users have sent over 2M branded pokes generating tens of millions of branded impressions.

Application Development and Promotion 3 rd party ad networks on Facebook can radically accelerate Facebook application adoption RockYou SocialMedia Lookery From RockYou’s experience, advertisers can generate between 1000 – 20,000 installs a day Cost ranges from $0.10 - $0.30 CPC and $0.15 - $0.60 CPI Viral tuning is key to taking advantage of paid campaigns 2x to 10x impact Behavioral and interest based ad targeting forthcoming

3 rd party ad networks on Facebook can radically accelerate Facebook application adoption

RockYou

SocialMedia

Lookery

From RockYou’s experience, advertisers can generate between 1000 – 20,000 installs a day

Cost ranges from $0.10 - $0.30 CPC and $0.15 - $0.60 CPI

Viral tuning is key to taking advantage of paid campaigns

2x to 10x impact

Behavioral and interest based ad targeting forthcoming

Application Development and Promotion Acuvue adjusted viral flow of Wink application and promoted the application on RockYou network— 200 installs grew to 150K users within a month . 646x60 Ad

Stylefeeder is the largest fashion/shopping Application on Facebook with over 1MM installs StyleFeeder able to convert double digit percentage of Facebook users into StyleFeeder.com users Based on high conversion, Stylefeeder drives app installs from RockYou to StyleFeeder app Application Development and Promotion Stylefeeder.com is successfully driving website traffic through marketing of a social application mirroring site functionality

Stylefeeder is the largest fashion/shopping Application on Facebook with over 1MM installs

StyleFeeder able to convert double digit percentage of Facebook users into StyleFeeder.com users

Based on high conversion, Stylefeeder drives app installs from RockYou to StyleFeeder app

Consider potential throughput of the ad network Quality of ads => Requires constant tuning to maintain high CTR Ad copy => Make it actionable and personally identifiable Viral tuning => Work with a team that knows viral engagement/growth Successful applications require ongoing investment Application Development and Promotion

Consider potential throughput of the ad network

Quality of ads => Requires constant tuning to maintain high CTR

Ad copy => Make it actionable and personally identifiable

Viral tuning => Work with a team that knows viral engagement/growth

Successful applications require ongoing investment

Rich Media on Social Applications 2x interaction rate, 2x activity rate

Monetization Opportunity

Online Advertising Growing Source : eMarketer CAGR: 22% Global Online Media Advertising ($Bn) Global Social Networking Advertising ($MM) CAGR: 65% Social Advertising Growing 3x Faster

Context is the key to social application monetization Virality / Hyper-targeting Contextual targeting High context Low virality Search is not viral Low context High virality Low context from photo browsing High context High virality Apps add context to social networks. Social apps are viral Social Applications

Monetizing Social Media Application Cross-promotion CPI (Cost per Installation) = $0.30-$0.50 Selected Customers: Agency-sourced Branded Advertising CPM (Cost per Impression) = $2.00 - $10.00 Type of Ads Using CPM: Branded Ads, Takeovers, App Integration Selected Customers: Direct Response and Lead Generation CPA (Cost per Action) Type of Ads Using CPA: Mobile Offering, Education, Finance Selected Customers: Virtual Goods, Micro-transactions & Subscription

Application Cross-promotion

CPI (Cost per Installation) = $0.30-$0.50

Selected Customers:

Agency-sourced Branded Advertising

CPM (Cost per Impression) = $2.00 - $10.00

Type of Ads Using CPM: Branded Ads, Takeovers, App Integration

Selected Customers:

Direct Response and Lead Generation

CPA (Cost per Action)

Type of Ads Using CPA: Mobile Offering, Education, Finance

Selected Customers:

Virtual Goods, Micro-transactions & Subscription

Application Cross-Promotion Publishers place ad units to standard formats. Advertisers pay on a CPI, CPC or CPM (cost per install) basis. 646x60 300x250

Publishers place ad units to standard formats. Advertisers pay on a CPI, CPC or CPM (cost per install) basis.

Application Cross-Promotion 3 rd party ad networks on Facebook serve as the foundation of revenue generation for most social applications RockYou Socialmedia Lookery Revenue from ad networks ranges from $0.10 - $1.50 eCPM RockYou’s app pages range from $0.40 to $1.50 eCPM Largest individual publishers on RockYou network generate $20K to $60K a month Actively optimizing ad network ad inventory can multiply revenue RockYou.com eCPM increased from $0.20 to $0.85 in 3 months Services like Rubicon Project and Pubmatic can automate ad network inventory optimization Pubmatic generating $0.50 eCPMs for one RockYou app

3 rd party ad networks on Facebook serve as the foundation of revenue generation for most social applications

RockYou

Socialmedia

Lookery

Revenue from ad networks ranges from $0.10 - $1.50 eCPM

RockYou’s app pages range from $0.40 to $1.50 eCPM

Largest individual publishers on RockYou network generate $20K to $60K a month

Actively optimizing ad network ad inventory can multiply revenue

RockYou.com eCPM increased from $0.20 to $0.85 in 3 months

Services like Rubicon Project and Pubmatic can automate ad network inventory optimization

Pubmatic generating $0.50 eCPMs for one RockYou app

Agency-Sourced Branded Advertising

Agency-Sourced Branded Advertising Direct selling is required - work with ad rep companies to help source agency relationships Alloy Media & Marketing Clearspring Appsavvy Agencies are looking for new, materially impactful experiences for their clients (same as the regular web) Application takeovers Niche demographic reach or custom content Performance Productize the offerings of your application/site Agency-sourced campaigns range from $30K to $150K spend International brand marketing can be significant UK/Europe Canada South America Internal resources are needed to support agency work Ad operations Reporting

Direct selling is required - work with ad rep companies to help source agency relationships

Alloy Media & Marketing

Clearspring

Appsavvy

Agencies are looking for new, materially impactful experiences for their clients (same as the regular web)

Application takeovers

Niche demographic reach or custom content

Performance

Productize the offerings of your application/site

Agency-sourced campaigns range from $30K to $150K spend

International brand marketing can be significant

UK/Europe

Canada

South America

Internal resources are needed to support agency work

Ad operations

Reporting

Lead Generation and Direct Response Leverage affiliate network providers at first (best offers w/ best payouts) Affinity Labs MyOfferPal Neverblue Ads Commission Junction Vet opportunities based on demographic mix of the application/site Successful lead gen/direct response campaigns on social media include: Mobile offers (SendMe) Dating (True, Match, SinglesNet) Education (UPheonix) Given unlimited funding for lead gen, effective way to fill remnant inventory at higher CPMs Actively research performance via discussion boards and directories Be prepared to process multiple lead gen offers to maximize performance Lead generation campaigns may burn through quickly; active management and tracking is required

Leverage affiliate network providers at first (best offers w/ best payouts)

Affinity Labs

MyOfferPal

Neverblue Ads

Commission Junction

Vet opportunities based on demographic mix of the application/site

Successful lead gen/direct response campaigns on social media include:

Mobile offers (SendMe)

Dating (True, Match, SinglesNet)

Education (UPheonix)

Given unlimited funding for lead gen, effective way to fill remnant inventory at higher CPMs

Actively research performance via discussion boards and directories

Be prepared to process multiple lead gen offers to maximize performance

Lead generation campaigns may burn through quickly; active management and tracking is required

Questions Questions?

Questions?

You rock! Engage the world.