Using Facebook solely as a way to reconnect with friends has become a
thing of the past. Today Facebook is fast emerging as new money making
avenue. With the rising popularity of Facebook applications, there are
many ways for Facebook users to capitalize. The
key to profiting from any app is creating a “sticky” app, or in other
words creating a popular app that has heavy traffic and that keeps users
coming back. Once you have a good idea for an app that will great high
traffic (frequent visitation and usage by users), you can begin to find
ways to make a profit.
If the app you have created is considered to be “sticky”, it will more than likely draw the attention of folks (ad networks, companies, etc) in need of advertising solutions. In order to make money from your sticky app, you can sell ad space to ad networks and/or other companies so that they may advertise their product, service, or whatever else, on your app/app page and you’ll get paid for it. In 2009, it was estimated that a third of Zynga’s estimated 240 million dollar revenue came from selling ad space. Now there are 4 major forms of selling ads space:
Cost Per thousand Impressions:
This kind of advertising would involve you selling ad space and getting paid per 1,000 views of that ad, or essentially per 1,000 times your app/app page is viewed. Profitability of your app is dependent on the popularity of your app; unfortunately, this works as a double edged sword of sorts. If you have a popular app, the more you will profit and if you have a not so popular app, you won’t profit as much but at the same time you don’t have to worry about any other user behavior beyond playing/viewing your app in order to get paid. This form of advertising is best for an app/app page with high traffic. CPM rates are heavily dependent on traffic levels but can start as low as $.01 per cpm.
Cost Per Click:
This kind of advertising would involve you selling ad space and getting paid based on how many times users click the actual advertisement on your app/app page. CPC advertising comes with a double edged sword of its own. While CPC advertising usually yields higher rates than CPM; CPC is dependent on user behavior. A user may visit your app/app page but there is the possibility of them not clicking the ads present. Despite that possibility, this is the easiest and most profitable form of advertising for new comers with low to medium traffic on their app/app pages. CPC rates can range from $.20-$6 per click.
Cost Per Action:
This form of advertising is kind of CPC to the next level. It involves you selling ad space but getting paid only if users not only click on the ads present but if they take the next step and actually commit to some action, be it registering, downloading something or actually purchasing whatever product or service was actually being advertised. This kind of advertising provides insurance for the ad network or company doing the advertising. While this form of advertising protects the company or ad network, it makes your profit further depend on user actions. As a developer you have to not only hope that users frequent your app/app page but also hope that they will click the ads present and commit to an action. This form of advertising is generally best for advertisers but it doesn’t mean that it’s not profitable for the publisher (you). CPA rates are directly dependent on conversion rate (how often users actually commit to an action from an ad) but rates can start at $1-$2 per CPA.
Cost Per Installation:
This kind of advertising maybe useful with creation of an app that includes a kind of credit system. For example, Zynga’s “Texas HoldEm Poker” application allows users to play poker online against other users using virtual currency. Players can earn poker chips from daily play but if they don’t want to wait another day for more chips (especially if they lose all their chips in one day), they may be prompted by a pop-ad from a company that paid for ad space, to install a toolbar or some other software to earn more poker chips. If the user agrees to the installation, Zynga gets paid by the company that the user installed the software from.
If the app you have created is considered to be “sticky”, it will more than likely draw the attention of folks (ad networks, companies, etc) in need of advertising solutions. In order to make money from your sticky app, you can sell ad space to ad networks and/or other companies so that they may advertise their product, service, or whatever else, on your app/app page and you’ll get paid for it. In 2009, it was estimated that a third of Zynga’s estimated 240 million dollar revenue came from selling ad space. Now there are 4 major forms of selling ads space:
Cost Per thousand Impressions:
This kind of advertising would involve you selling ad space and getting paid per 1,000 views of that ad, or essentially per 1,000 times your app/app page is viewed. Profitability of your app is dependent on the popularity of your app; unfortunately, this works as a double edged sword of sorts. If you have a popular app, the more you will profit and if you have a not so popular app, you won’t profit as much but at the same time you don’t have to worry about any other user behavior beyond playing/viewing your app in order to get paid. This form of advertising is best for an app/app page with high traffic. CPM rates are heavily dependent on traffic levels but can start as low as $.01 per cpm.
Cost Per Click:
This kind of advertising would involve you selling ad space and getting paid based on how many times users click the actual advertisement on your app/app page. CPC advertising comes with a double edged sword of its own. While CPC advertising usually yields higher rates than CPM; CPC is dependent on user behavior. A user may visit your app/app page but there is the possibility of them not clicking the ads present. Despite that possibility, this is the easiest and most profitable form of advertising for new comers with low to medium traffic on their app/app pages. CPC rates can range from $.20-$6 per click.
Cost Per Action:
This form of advertising is kind of CPC to the next level. It involves you selling ad space but getting paid only if users not only click on the ads present but if they take the next step and actually commit to some action, be it registering, downloading something or actually purchasing whatever product or service was actually being advertised. This kind of advertising provides insurance for the ad network or company doing the advertising. While this form of advertising protects the company or ad network, it makes your profit further depend on user actions. As a developer you have to not only hope that users frequent your app/app page but also hope that they will click the ads present and commit to an action. This form of advertising is generally best for advertisers but it doesn’t mean that it’s not profitable for the publisher (you). CPA rates are directly dependent on conversion rate (how often users actually commit to an action from an ad) but rates can start at $1-$2 per CPA.
Cost Per Installation:
This kind of advertising maybe useful with creation of an app that includes a kind of credit system. For example, Zynga’s “Texas HoldEm Poker” application allows users to play poker online against other users using virtual currency. Players can earn poker chips from daily play but if they don’t want to wait another day for more chips (especially if they lose all their chips in one day), they may be prompted by a pop-ad from a company that paid for ad space, to install a toolbar or some other software to earn more poker chips. If the user agrees to the installation, Zynga gets paid by the company that the user installed the software from.
