So you want to make money from a Facebook App…
At the recent Barcamp Houston event, I attended a session titled “Facebook App Brainstorming Session”. I had been thinking about how Facebook Apps could be used from a marketing standpoint, and was excited by the prospect of discussing it with others. Unfortunately, the guy leading the session was mainly interested in telling the audience about the idea he had for an app. Being a strong Type A personality, I interrupted the impromptu focus group and asked if anyone wanted to have a more general discussion about Facebook Apps. Since most of the people in the room also thought that was the subject of the session we were in (kudos to the organizer for drawing a crowd!) a lot of hands were raised. Convinced I could have a discussion w/ more than a mirror, I left the room and scheduled my own session [if you don't know how Barcamp works, the attendees decide what to discuss - you just find an open slot and put your subject and name on the board].
We had about 30 people show up for our brainstorming session. i kicked it off by posing 2 questions:
1. Can you actually make (real) money from a Facebook App?
2. Can a Facebook App be used for marketing purposes?
Unfortunately, no one in the room had actually developed a Facebook App. However, there were some smart people in the room and we had a great discussion. Here are the takeaways:
Question 1: Can you make real $$$? While it’s theoretically possible to earn some income from cpm-based ad revenue sharing, we agreed it’s hard to make real money from an App. Don’t get me wrong - Fun Space formerly known as Fun Wall is cool, but I use it mostly as a video viewer than an App. Michael Dalesandro had the right app at the right time with Where I’ve Been, but those examples are rare. Like the domain squatters of 1997, they showed that first movers can sometimes win. Earlier this year I had dinner w/ the guys (nice kids from Austin) who created the Vampire and Zombie Apps. They admitted they had just recently started to see some income from the millions of underworld fights they created, but recognized it wasn’t going to last long. The nights of the Vampire were fading and that they needed to come up with something new, pronto.
This week Techcrunch reported that to date, a mere $8 million has been paid by Facebook to App developers around the world - not much considering the (hundreds of) billions of page views Facebook has had. However, the article also reports there are some app developers who are making real money (six and seven figures each month) from their apps. But these aren’t from the traditional cpm revenue shares - read the article to learn more.
Okay, so you CAN make money with a Facebook App. And new members LOVE APPS! Who wouldn’t want to receive a cupcake??? Well, as much as virtual cupcakes enrich our lives, the novelty eventually wears off and they become a nuisance. If you’re like me (and at least 499 others in the Facebook group “Stop Sending me damn application requests or I’ll go ape shit on your ass“), you’ve probably removed most of the apps you added when you joined Facebook.
The implications are twofold: 1) Apps have limited lives, and 2) you might want to shoot for the over 30 crowd, as that seems to be where the growth in Facebook members is occurring (ask a 22-year old which apps they are adding these days, but be careful!).
Question #2: Can Apps be used as a marketing vehicle? As above, the answer is “yes, but…” which means it’s possible, but becoming harder and harder. First, as mentioned, the adoption of apps seems to be inversely correlated to time spent as a member (starts off high, goes down fast). Second, more and more people are figuring out what all that privacy talk is all about. I you know that a server knows who you are and is tracking how often you visit “Hot or Not” to see what others think of you, it may be a little settling.
But like all things, there are exceptions. The Causes App has been very successful for many… causes. Another example is Dell, which jumped on the Green bandwagon (scoring a perfect landing before rumors surfaced of being too young to compete) with its Regeneration contest. The eco-centric campaign relied heavily (and benefited greatly) on the Facebook Graffiti application. I saw the case study at Ad-Tech and was pretty impressed with how Dell whipped a bunch of environmentally-friendly propeller heads into a graffiti frenzy to promote its contest. BTW - my entry “Dude you’re getting a Tree!” was not sel
ected as a finalist.
The lesson: why create an app when you can leverage an existing app that is already being used by millions? This was another one of the pearls that came from our Barcamp discussion.
Charitable Donation?
While there are a few Facebook apps that make money, and others that serve as effective marketing vehicles, those are few and far between. I’m hopeful that all other apps were conceived, built and distributed with an altruistic, “share-the-fun” objective. If on the other hand they were built for a commercial purpose, hopefully the owners are business-savvy enough to deduct the cost of building them as a charitable donation to society.
Comments? Questions? Let’s hear from you!