Monetizing Social Media


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Monetizing Social Media

  1. 1. Bling Bling: Marketing and Monetizing Through Social Applications August 2008
  2. 2. Common Perceptions of Social Media <ul><li>“ You can’t make material money through social media” </li></ul><ul><li>“ You can’t effectively promote yourself on social media” </li></ul>
  3. 3. Social Media Ad Network Social Gaming Provider <ul><li>Leading ad network for social media (FB, MySpace) </li></ul><ul><li>9B+ impressions per month </li></ul><ul><li>90M monthly unique visitors global </li></ul><ul><li>Largest social application provider on the web (FB, MySpace, Hi5, Bebo, Orkut) </li></ul><ul><li>1.5B+ PVs per month </li></ul><ul><li>60M+ monthly unique visitors global </li></ul><ul><li>Leading social games (pets, autos, poke) </li></ul><ul><li>700M PVs per month </li></ul>What is RockYou? Our mission is to engage the world with social applications RockYou has massive reach and scale, 6x larger than its next largest competitor, and the opportunity for growth is only beginning. Social Applications
  4. 4. A Dominant Facebook Presence and Growing Super Wall 38M 18.6 M Hug Me 22M 4.0M Likeness 20M 5.2M Pieces of Flair 13M 4.3M Birthday Cards 7M 3.3M Horoscopes 7M 0.3M Likeness Unrated 5M 1.0M Speed Racing 5M 1.2M PetrolHead 4M 0.3M Total Facebook Users Application Monthly Active Users RockYou has over a dozen applications with over 1 million users – below are some of the largest:
  5. 5. Social Media Introduction
  6. 6. Examples of Social Media <ul><li>Multimedia </li></ul><ul><ul><li>Photo-sharing: Flickr </li></ul></ul><ul><ul><li>Video-sharing: YouTube </li></ul></ul><ul><ul><li>Audio-sharing: imeem </li></ul></ul><ul><li>Entertainment </li></ul><ul><ul><li>Virtual Worlds: Second Life </li></ul></ul><ul><ul><li>Online Gaming: World of Warcraft </li></ul></ul><ul><li>News/Opinion </li></ul><ul><ul><li>Social news: Digg, Reddit </li></ul></ul><ul><ul><li>Reviews: Yelp, epinions </li></ul></ul><ul><li>Communication </li></ul><ul><ul><li>Microblogs: Twitter, Pownce </li></ul></ul><ul><ul><li>Events: Evite </li></ul></ul><ul><ul><li>Social Networking Services: Facebook, LinkedIn, MySpace </li></ul></ul>
  7. 7. Who Are The Major Players? More To Come… <ul><li>Social Networking Websites: </li></ul><ul><ul><li>MySpace </li></ul></ul><ul><ul><li>Facebook </li></ul></ul><ul><ul><li>Hi5 </li></ul></ul><ul><ul><li>Orkut </li></ul></ul><ul><ul><li>Bebo </li></ul></ul><ul><ul><li>Friendster </li></ul></ul><ul><ul><li>LinkedIn </li></ul></ul>
  8. 8. Le Distribution Géographique
  9. 9. How Much Has The Market Been Tapped? Explosive growth… … But still a long way to go
  10. 10. What Are Social Networks Used For?
  11. 11. Monetization Opportunities with Social Applications
  12. 12. Online Advertising Growing Source : eMarketer CAGR: 22% Global Online Media Advertising ($Bn) Global Social Networking Advertising ($MM) CAGR: 65% Social Advertising Growing 3x Faster
  13. 13. Context is the key to social media monetization Virality / Hyper-targeting Contextual targeting High context Low virality Search is not viral Lower context High virality Low context from photo browsing High context High virality Apps add context to social networks. Social apps are viral Social Applications
  14. 14. Monetizing Social Media <ul><li>Application Cross-promotion </li></ul><ul><ul><li>CPI (Cost per Installation), CPC = $0.30-$0.50 </li></ul></ul><ul><ul><li>Select Customers: </li></ul></ul><ul><li>Agency-sourced Branded Advertising </li></ul><ul><ul><li>CPM (Cost per Impression) = $2.00 - $10.00 </li></ul></ul><ul><ul><li>Type of Ads Using CPM: Branded Ads, Takeovers, App Integration </li></ul></ul><ul><ul><li>Select Customers: </li></ul></ul><ul><li>Direct Response and Lead Generation </li></ul><ul><ul><li>CPA (Cost per Action) </li></ul></ul><ul><ul><li>Type of Ads Using CPA: Mobile Offering, Education, Finance </li></ul></ul><ul><ul><li>Select Customers: </li></ul></ul><ul><li>Virtual Goods, Micro-transactions & Subscription </li></ul>
  15. 15. Application Cross-Promotion <ul><li>Publishers place ad units to standard formats. Advertisers pay on a CPI, CPC or CPM (cost per install) basis. New FB profile helps on IAB standards. </li></ul>646x60 => 728x90 300x250
  16. 16. Application Cross-Promotion <ul><li>3 rd party ad networks on Facebook, MySpace serve as the foundation of both promotion and revenue generation for most social applications </li></ul><ul><ul><li>RockYou </li></ul></ul><ul><ul><li>Socialmedia </li></ul></ul><ul><ul><li>Lookery </li></ul></ul><ul><li>Revenue from ad networks ranges from $0.10 - $1.50 eCPM </li></ul><ul><li>RockYou’s app pages range from $0.40 to $1.50 eCPM </li></ul><ul><li>Largest individual publishers on RockYou network generate $20K to $100K a month </li></ul><ul><li>Actively optimizing ad network ad inventory can multiply revenue </li></ul><ul><ul><li> eCPM increased from $0.20 to $0.85 in 3 months </li></ul></ul><ul><li>Services like Rubicon Project and Pubmatic can automate ad network inventory optimization </li></ul><ul><ul><li>Pubmatic generating $0.50 eCPMs for one RockYou app </li></ul></ul>
  17. 17. Agency-Sourced Branded Advertising
  18. 18. Agency-Sourced Branded Advertising <ul><li>Direct selling is required - limiting scope of potential advertising partners </li></ul><ul><ul><li>Facebook, MySpace, Linkedin </li></ul></ul><ul><ul><li>RockYou, Slide, Zynga, SGN </li></ul></ul><ul><li>Many other developers work with ad rep companies to help source agency relationships </li></ul><ul><ul><li>Alloy Media & Marketing </li></ul></ul><ul><ul><li>Clearspring </li></ul></ul><ul><ul><li>Appsavvy </li></ul></ul><ul><li>Agencies are looking for new, materially impactful experiences for their clients (same as the regular web) </li></ul><ul><ul><li>Application takeovers </li></ul></ul><ul><ul><li>Niche demographic reach or custom content </li></ul></ul><ul><ul><li>Performance </li></ul></ul><ul><li>Productize the offerings of your application/site </li></ul><ul><li>Agency-sourced campaigns range from $30K to $150K spend </li></ul><ul><li>International brand marketing can be significant </li></ul><ul><li>Internal resources are needed to support agency work </li></ul><ul><ul><li>Ad operations & reporting </li></ul></ul>
  19. 19. Lead Generation, Direct Response <ul><li>Lead generation, DR and performance marketing currently makes up a significant volume of advertising on social media </li></ul><ul><li>Leverage affiliate network providers at first (best offers w/ best payouts) </li></ul><ul><ul><li>Affinity Labs </li></ul></ul><ul><ul><li>MyOfferPal </li></ul></ul><ul><ul><li>Neverblue Ads </li></ul></ul><ul><li>Vet opportunities based on demographic mix of the application/site – increased context </li></ul><ul><li>Successful lead gen/direct response campaigns on social media include: </li></ul><ul><ul><li>Mobile offers (SendMe, Thumbplay) </li></ul></ul><ul><ul><li>Dating (True, eHarmony, Match, SinglesNet) </li></ul></ul><ul><ul><li>Education (UPheonix) </li></ul></ul><ul><li>Given unlimited funding for lead gen, effective way to fill remnant inventory at higher CPMs </li></ul><ul><li>Be prepared to process multiple lead gen offers to maximize performance – 10s to 100s </li></ul><ul><li>Lead generation campaigns may burn through quickly; active management and tracking is required </li></ul>
  20. 20. Virtual Currency <ul><li>Fastest growing segment of social media monetization </li></ul><ul><li>New services allow transactions for youth demographic (13-21) </li></ul><ul><li>Virtual currency monetization providers are key </li></ul><ul><ul><li>OfferPal Media (alternative payments) </li></ul></ul><ul><ul><li>SuperRewards (alternative payments) </li></ul></ul><ul><ul><li>SpareChange (microtransactions) </li></ul></ul><ul><ul><li>Echovox, Mobillcash (mobile) </li></ul></ul><ul><li>For a high volume app (1M uniques+ a month), revenue generated ranges from $100K - $1M per month </li></ul>10M users Mobsters 8M users Own Your Friends! 8M users Mafia Wars 3M users SuperPets 3M users Texas Holdem 2M users Heroes Top MySpace Game Apps (after 2-3 months live)
  21. 21. Successful Marketing on Social Media: Social Applications
  22. 22. Why? Potential for Social Apps is Exploding 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
  23. 23. <ul><li>Source: eBay Investor Presentation, RockYou </li></ul><ul><li>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 </li></ul><ul><li>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) </li></ul>(2) Registered Users (MM) Viral Marketing and Engagement is key to success
  24. 24. Key Takeaways for Initial Viral Growth <ul><li>New User focus </li></ul><ul><li>Simplicity </li></ul><ul><li>Novelty </li></ul><ul><li>Universal Applicability </li></ul>
  25. 25. Building Viral Engagement User <ul><li>3. Indirect friends => focus on messaging </li></ul><ul><ul><li>Focus on messaging to invite/notification receivers to drive CTRs and more efficient/effective invitations/notifications </li></ul></ul><ul><ul><li>Deliver increasing AND simply understood value to app w/ every friend invited (Zombies) </li></ul></ul><ul><li>1. New users => build clean flows </li></ul><ul><ul><li>New users absolutely key to viral engagement (vs returning user) </li></ul></ul><ul><ul><li>Focus on linear, one-action flows to maximize activation for new users </li></ul></ul><ul><ul><li>Forget registration </li></ul></ul><ul><li>2. Direct friends => deliver clear value </li></ul><ul><li>prop </li></ul><ul><ul><li>Provide clear value proposition to new user for inviting friend network (Likeness) </li></ul></ul><ul><ul><li>Ensure invitation is inherent to the new user flow to maximize viral value of user (Superlatives vs Superlatives) </li></ul></ul><ul><li>4. Interested parties => allow universal use </li></ul><ul><ul><li>Enable simple tools (comments, ratings, answers) that allow interaction w/o requiring full engagement w/ application (My Questions) </li></ul></ul>Direct Friends Indirect Friends Interested Parties
  26. 26. Marketing Opportunities with Social Applications <ul><li>Successful marketing for social media should include social applications: </li></ul><ul><li>Application content integration </li></ul><ul><ul><ul><li>Integrating brand or product as part of user experience </li></ul></ul></ul><ul><ul><ul><li>Example: Likeness quiz, virtual gifts, greeting cards, virtual actions, etc </li></ul></ul></ul><ul><li>Sponsorships or branding of applications </li></ul><ul><ul><ul><li>App takeover or skinning w/ possible promotion </li></ul></ul></ul><ul><ul><ul><li>Example: Skin application w/ sweepstakes or contest </li></ul></ul></ul><ul><li>Custom social application building & distribution </li></ul><ul><ul><ul><li>Build a social app for advertiser and/or distribute it through social network specific ad networks </li></ul></ul></ul><ul><ul><ul><li>Example: Build, viral tune, launch, and seed an app recruiting users from RockYou’s leading ad network jumpstarting viral spread of app </li></ul></ul></ul><ul><li>Rich Media </li></ul>
  27. 27. 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
  28. 28. 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
  29. 29. 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.
  30. 30. Application Integration: Sweeney Todd 0.01% CTR for banner alone 65x better 0.65% CTR with integration
  31. 31. Application Integration – SuperWall Card Featured two custom-designed greeting cards on SuperWall for StepBrothers Results: <ul><li>8M impressions on application pages </li></ul><ul><li>6M cards sent </li></ul><ul><li>Immeasurable viral impressions through association of content to friend and his/her network </li></ul>Card appears in user’s profile Greeting cards in top placement, pre-selected, and expansion upon roll-over
  32. 32. Application Sponsorship <ul><li>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. </li></ul>
  33. 33. <ul><li>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. </li></ul>Application Sponsorship 100 x goal 10K expected 1M achieved
  34. 34. 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)
  35. 35. Application Development and Promotion <ul><li>F rictionless: simple, less is more </li></ul><ul><li>A udience: on Facebook for their friends </li></ul><ul><li>C ommunication: integrate into the viral channels </li></ul><ul><li>E ngagement: hook users to return regularly </li></ul><ul><li>B usiness model: design with monetization in mind </li></ul><ul><li>O bjective: establish goals and success metrics </li></ul><ul><li>O bvious: make each page’s purpose clear </li></ul><ul><li>K eep working: develop, test, repeat </li></ul>Some rules of thumb from Context Optional.
  36. 36. Application Development and Promotion <ul><li>Over two months since launch, over 250K users have sent over 2M branded pokes generating tens of millions of branded impressions. </li></ul>
  37. 37. Application Development and Promotion <ul><li>3 rd party ad networks on Facebook can radically accelerate Facebook application adoption </li></ul><ul><ul><li>RockYou </li></ul></ul><ul><ul><li>SocialMedia </li></ul></ul><ul><ul><li>Lookery </li></ul></ul><ul><li>From RockYou’s experience, advertisers can generate between 1000 – 20,000 installs/users a day </li></ul><ul><li>Cost ranges from $0.10 - $0.30 CPC and $0.15 - $0.60 CPI </li></ul><ul><li>Viral tuning is key to taking advantage of paid campaigns </li></ul><ul><ul><li>2x to 10x impact </li></ul></ul><ul><li>Behavioral and interest based ad targeting forthcoming </li></ul>
  38. 38. 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
  39. 39. <ul><li>Stylefeeder is the largest fashion/shopping Application on Facebook with over 1MM installs </li></ul><ul><li>StyleFeeder able to convert double digit percentage of Facebook users into users </li></ul><ul><li>Based on high conversion, Stylefeeder drives app installs from RockYou to StyleFeeder app </li></ul>Application Development and Promotion is successfully driving website traffic through marketing of a social application mirroring site functionality
  40. 40. <ul><li>Consider potential throughput of the ad network </li></ul><ul><li>Quality of ads => Requires constant tuning to maintain high CTR </li></ul><ul><li>Ad copy => Make it actionable and personally identifiable </li></ul><ul><li>Viral tuning => Work with a team that knows viral engagement/growth </li></ul><ul><li>Successful applications require ongoing investment </li></ul>Application Development and Promotion
  41. 41. Rich Media on Social Applications 2x interaction rate, 2x activity rate
  42. 42. Who is RockYou?
  43. 43. Who is RockYou? <ul><li>Most popular applications/widgets across Facebook, hi5, Bebo, Orkut and MySpace </li></ul><ul><li>Over 700K RockYou apps installed daily and over 100 million apps live across social networks </li></ul><ul><li>Over 16 million registered users </li></ul><ul><li>Over 90 million monthly unique visitors across RockYou network </li></ul><ul><li>Over 1B pageviews a month on RockYou apps and 6 billion pageviews per month across our ad network </li></ul>Our mission is to engage the world with social applications 6B 16M 100M 90M 700k
  44. 44. Most Million User Applications across Social Networks
  45. 45. <ul><li>Leverage RockYou’s massive outreach in social media (90M uniques, 6B PVs) for Coke product placements and media </li></ul><ul><li>Build integrated campaigns on RockYou’s top applications on Facebook and MySpace </li></ul><ul><ul><li>Superwall (30M users, 20M monthly uniques) </li></ul></ul><ul><ul><li>Likeness (20M, 5M) </li></ul></ul><ul><ul><li>HugMe (15M, 4M) </li></ul></ul><ul><ul><li>Pieces of Flair (8M, 4M) </li></ul></ul><ul><ul><li>Speed Racing (6M, 2M) </li></ul></ul><ul><ul><li>Birthdays (8M, 1M) </li></ul></ul><ul><ul><li>SuperPets (2M, 1M) </li></ul></ul><ul><li>Work with RockYou and partners on Coke applications for design/development and distribution </li></ul><ul><ul><li>Context Optional </li></ul></ul><ul><ul><li>FaceIt! </li></ul></ul>Opportunities with RockYou
  46. 46. Questions <ul><li>Questions? </li></ul><ul><li>Email </li></ul>
  47. 47. You rock! Engage the world.