While the very top of the Facebook platform – apps the like of Super Wall and Top Friends – has remained relatively static over the past year, new applications have continued to penetrate the platform’s upper echelon.

One such application is the shared calendar and gifting app SocialCalendar. We’ve compiled a brief overview of the app’s functionality, recent and substantial traffic swings, new focus on virtual goods, and recently launched foray into movies.

Description

The application helps users manage and coordinate social gatherings such as birthdays and holidays. The app’s functionality goes significantly deeper than Facebook’s Events application, as users can easily visualize and document their upcoming events and those of their friends in one, centralized location. Additionally, SocialCalendar takes advantage of the Amazon API, allowing users to create personal wish lists which can be shared with friends and family through the app’s event reminders. See another review on the app here.

App Traffic

In late October, we covered SocialCalendar’s spectacular growth after the profile redesign. As we reported then, the application’s monthly active user count doubled in October “from 2.2 million at the end of September to nearly 3.9 million.” At that time, SocialCalendar CEO Raj Lalwani attributed the growth to the inherently viral nature of the application’s core functionality, and the application’s compelling emails and notifications.

AppData for SocialCalendar

In December, the app’s supernormal growth cooled, and the app settled at roughly 2.2 million MAU by the start of the new year. Raj attributed to that slowdown to three primary factors:

• A significant portion of the reported MAU were new signups during an extremely high growth period. Having accumulated over 8.5 million users, new signups have stabilized now – bringing MAU to current levels.
• The SocialCalendar team’s focus shifted temporarily away from core functionality to monetization, which affected repeat visits by existing users.
• The Holiday period.

Just Launched: Virtual Gifts and Movie Calendars

Now, that work on monetization is beginning to come to fruition. As we reported last week, SocialCalendar recently released a new virtual gift offering that the company expects to be an “important source of revenue” moving forward. In keeping with most other virtual gift offerings, in SocialCalendar’s implementation users earn points by completing different actions or buy points directly which are then be used to purchase a variety of virtual gifts.

What makes SocialCalendar’s functionality unique is that users can also purchase virtual icons with their points. These icons (some 200-300 are now available) can be displayed on users’ calendar for each event or occasion created. Overall, the SocialCalendar team expects “users to buy several thousand virtual gifts and icons per day.”

In addition to the recent push into virtual goods, SocialCalendar today introduced a Movie Calendar, which allows users to see movies opening this week, coming soon, and on the top box office list. Through the Movie Calendar users can add movies to their own SocialCalendars, and can see show times and buy tickets directly. Raj considers this new piece of functionality another step towards filling the team’s vision of a social calendar, which he defines as “a place where users manage their social life and coordinate various social activities with their friends and family.”

Looking Ahead

Since the start of the new year the app’s traffic has begun to stabilize in the 2.0 million MAU range. Today, Raj reports that the app’s daily usage trends seem promising and he expects that the app will continue to recover from the December traffic shifts.

To start 2009, SocialCalendar has launched a new revenue stream with plans for further expansion in virtual goods, boasts a substantial install base, and is showing strengthening DAU numbers. We’ll stay on top of SocialCalendar’s growth and other apps that are experiencing big shifts in traffic in 2009.

It has only been one month since Facebook officially launched Facebook Connect. On December 4th, the social network decided to allow its users to carry their credentials and their community of friends with them across the web. Already having an immensely popular platform for developers to build applications, Facebook has now seen hundreds of sites adopt Facebook Connect to allow users to log in, share information with friends, and report some of this activity back to Facebook.

Interestingly, two of the most trafficked Facebook Connect integrations to date are from video sites Joost (at 18,500 MAU) and Vimeo (7,500 MAU). (Hulu has announced Facebook Connect support, but has not yet launched it. YouTube, which is owned by Google, is unlikely to implement Facebook Connectin the near future.)

While these numbers may seem small in comparison to many on-Facebook apps, Facebook Connect’s adoption on video sites shows that many users are choosing Facebook Connect to more easily login and share videos with friends.

Using Facebook’s technology, these video sharing communities will grow more quickly. What is not yet certain is how much of these video sites’ traffic will come through sharing on Facebook in the future. Media companies are always concerned with growing their audience as much as possible — though Facebook Connect, could Facebook replace Digg and other social sharing sites as the top traffic referrer?

It will be interesting to see how Facebook Connect grows, especially in video sharing sites (and blogs) which already have a focus on building communities.

Check out the latest news & insights this week from Inside Social Games:

• Top 25 Facebook Games for January 2009
• Top 25 MySpace Games for January 2009
• SGN Launching Live Versions of its iPhone Sports Games
• Zynga 2008 Revenues Rumored at $40-$50 Million
• Tapulous’s Tap Tap Dance on the iPhone is Fantastic
• SimCity Rocks on the iPhone
• GamersGate Offers a New Microtransaction Platform

When Facebook changed the metrics it reports for application several months back, Monthly Active Users (“MAU”) became the primary public application metric. However as several developers on the forums have been asking lately, the meaning of MAU is not exactly clear to the developer community. However, given new responses from the Facebook Platform Team on the Developer Forums, a concrete definition is now known.

MAU – Monthly Active Users

Simply put, MAU refers to the number of unique users per the past 30 days. This metric is most prominently displayed on application about pages, and is sometimes confused for the Unique Canvas Page Views metric, as they are typically closely related.

To see the active user breakdown for your application by day, jump to your application Insight’s page and select “Active Users (Engagement)” from the dropdown menu on the Usage tab. You will see your unique daily active users per day. To see your application’s current MAU value, check the “Past 30 days” box.

What is a “Unique” user?

Another frequent question is how users are tallied. According to the Facebook Platform Team, a unique user can be generated from any of the following actions:

• mock ajax request
• fbml link click
• canvas page view
• click-to-play swf
• message attachment
• fbjs ajax
• accepting a request
• viewing a profile tab
• publishing something via a publisher

In addition, the user must at least be logged into Facebook and accessing your application to be counted as active. However, the user does not need to have already authorized your application to be counted. Note that there is no way to distinguish between a user logged out of Facebook and a user who hasn’t authorized your application.

Metrics are essentially the vital-signs of an application, important to both analysts and developers as ways to monitor the success and growth of applications. Keeping a firm understanding of these underlying metrics is key to success on the platform.

On Facebook, marketers have a variety of options when it comes to reaching Facebook’s 150 million active users. Advertisers can engage Facebook users through Facebook advertising solutions, applications on the Facebook Platform (either through Platform ad networks or rep firms or going direct), or guerilla-style activism.

In terms of Facebook’s own advertising solutions, while much attention has been paid to branded “engagement” campaigns that have been run in recent months, another important and growing part of Facebook’s advertising business is its performance ad system. Although performance advertising may not sound as sexy as sacrificing your friends for a hamburger, “tens of thousands” of advertisers are using Facebook’s performance ad system according to the company. Facebook’s self service tools allow advertisers to run campaigns on a CPC or CPM basis, and advertisers can drive traffic to either their own site or a Facebook Page.

In order to gain a deeper understanding of how Facebook sees its performance advertising business, we sat down with Tim Kendall, Facebook’s Director of Monetization and performance advertising head. Below, Tim shares his thoughts with us on Facebook’s positioning of performance ads in the marketplace, how performance advertisers are succeeding using Facebook’s solutions, and what messages about Facebook’s performance advertising opportunity are resonating with agencies today.

IF: Thanks for your time today Tim. Looking at your overall strategy, how does performance advertising fit into what you’re doing today?

TK: We like to think about it this way. If you think about the classic marketing funnel that’s very big at the top and very small at the bottom – where at the top you’re planting the notion of a brand in the consumer’s head, and at the bottom you’re delivering to a consumer who explicitly wants something, such as paid search – what’s happening at the bottom of that funnel is what we call demand fulfillment.  The guy at the top of the funnel may not even be thinking about photography if he’s on Yahoo Sports and sees a Canon banner ad. We believe that we play in the funnel above that threshold.

We don’t have people that come to the site to buy a digital camera, but we have a lot of users on the site who spend a lot of time on the site, and we think there’s a big opportunity for brand marketers to get broad reach and tell their story to those customers at the very top of the funnel. We can show an ad to people who have expressed an interest in photography. The next step down the funnel is where we see our performance marketing solution – toward the middle/bottom part of funnel.  We think there is a huge opportunity in latent demand right above the bottom part of the funnel.

What would you say are your core differentiators in that area?

Three reasons: 1) We have amazing reach, and we’re growing by a lot every day. The people who have the widest reach win the brand game. 2) We have a lot of information about you the user, because you’ve declared it to us so you can share it with your friends. We can look at your profile fields to determine your interests, and we can look at your status updates and know what your interests are today. 3) We know who you know. This is where we’re just starting to come out with a couple sets of offerings. The Social Ad offering takes into account the notion of who you’re friends with.

We think about both brand and performance together (but we have many marketers who come to us for one or the other). We think marketers increasingly want an end to end solution where you can first help them build their brand with large numbers of consumers, and then convert them into buyers. In terms of internal priorities, we view performance as equal to brand.

In the performance area, our core differentiators are: 1) We have a lot of information about users, so we can provide powerful targeting to advertisers so that they can efficiently allocate spend, and 2) We have market based pricing – it’s an auction, so advertisers don’t overpay. Also, “who users know” (Facebook’s Social Ads product) is something that some performance advertisers are leveraging, but it hasn’t become central yet.

How much lift do you see in click through rates when advertisers employ Social Ads?

On a click through rate basis, we see over 100% improvement when an impression is a Social Ad. For example, a local restaurant could do a happy hour ad and connect it to an event, so that when you RSVP, your friends get Social Ads. People come to Facebook to learn about their friends, so if you can make the advertising about their friends, it’s more effective. In addition, it may get seen by their friends in their News Feed as pure organic content – Facebook has decided that something like this is often relevant enough to not display like an ad.

Wherever we have greater density of information about users, we tend to be able to provide more relevant ads. Entertainment is a category that works well because those are the types of niche interests that users are willing to share on their profile. Categories that match up well with music, movies, books, hobbies tend to do well.  We can also target users based on what pages they’re affiliated with, which broadens the number of users we can target.  We are actually seeing success in every major category.

However, success tends to be more determined by the degree to which the advertiser understands how the system works and how targeting works differently than in other systems.  It’s a people targeting system, not a keyword targeting system.  On Google, I would select things like a specific camera brand or name to target. On Facebook, it would be more like interest or hobby keywords.

Paid search had the same challenge in the beginning.  We do have a lot of SEM agencies that are working with us and are seeing success, but we are still early on. There will be the constant process of educating agencies, the local market, and the international markets – where the objectives of advertisers are different.

So what are your current priorities for improving the performance ad platform in 2009?

I can talk in general terms. Generally, we’re trying to make it easier for advertisers to order ads and allocate their spend and get higher ROI.  But we spend just as much time thinking about how we can make ads more relevant for the user.  There will be more features and functionality that help with both of those. We want to figure out in a very transparent and privacy compliant way how to make ads more relevant.

Using the graph is something we want to do more in 2009, while respecting privacy as well. When your friends click on an ad, we view it as a reasonable inference that that would be valuable and fair to share with your friends. We’ve done pretty well with privacy on this because we stick to what the user provides to us.

In many ways we view Social Ads as less surreptitious than many types of behavioral targeting technologies. We also already provide “thumbs up/thumbs down” ad feedback so that users can tune what they see.

Can you share any stats around the size of the business last year?

We can say that we have tens of thousands of monthly active advertisers in the system. We are very pleased with revenue growth.

Finally – when you talk about latent demand and demand generation with agencies, what do you find most effective in helping them appreciate the opportunity?

Yes, again we think that there’s a tremendous opportunity in the latent demand realm where there’s a lot of open space on the internet to create value. No one has really figured out how to effectively generate demand and effectively measure that.

How do you make that sound compelling to agencies?  At the end of the day, an agency’s job is to find more customers for its clients. Going back to the camera example, there are so many cameras that are sold in a month. A fair amount of those are done through search. However, there are also a lot of people every month for whom it doesn’t occur to them to buy a camera off the bat, but they may buy a camera if you put the right ad in front of them at the right time.

We tell agencies they may have great SEM programs going on, but there’s a whole other set of customers that they can gain access to that would be accretive to their current channels. If you’re a 49ers fan, there’s a chance you’ll actively search for tickets, and there’s another chance you won’t. Because we know you’re a fan, we can put 49ers tickets ads on your profile. Had you not seen that ad, you might be in that set of people that never would have done a search or would have sought that product in an active way.

Thanks for your time Tim.

Learn more about building your brand and growing your audience with our comprehensive guide to marketing on Facebook. The Facebook Marketing Bible is available at FacebookMarketingBible.com

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The newly revised, expanded, and hot-off-the-press Facebook Marketing Bible: 39+ Ways to Market Your Brand, Company, Product, or Service Inside Facebook – January 2009 Edition is now available!

The Facebook Marketing Bible has been purchased by hundreds of agencies, marketers, social application developers, entrepreneurs, and educators, and is the leading resource on Facebook marketing today. It is also available in French here.

The densely-packed Facebook Marketing Bible contains three detailed sections: Tools for Guerilla Marketers, Tools for Advertisers, and Tools for Application Developers. Each part outlines the best available channels and strategies for reaching your audience inside Facebook. Please see the full table of contents below.

The January 2009 edition includes updates on the following topics:

• The latest insights on branded applications vs. sponsoring existing applications - What is the right way to market through Facebook applications? We explore the pros, cons, and challenges of building your own “appvertisement” vs. partnering with large existing application audiences.
• The latest updates on Facebook advertising solutions. Facebook’s new engagement ads offer a variety of ways to engage users at the very top of the demand funnel. Plus, new details on Facebook’s performance ads system.
• Updates on tools bloggers and webmasters are using to get the most out of Facebook Connect. Hundreds of sites have now launched Facebook Connect support – Facebook’s approach to extending the Facebook Platform to any site of the web. Many are seeing high referral numbers from items shared through Facebook Connect. Learn more about what tools you can use to do the same.
• Plus, updates on application emails to non-Facebook-members, Facebook’s latest growth stats, and more.

For those interested in learning more, click the purchase link above. The price is $49, or $59 with three months of free updates emailed directly to your inbox. As always, please make suggestions if you’d like to see more attention paid to any topic!

Table of Contents

Introduction

I. Tools for Guerilla Marketers

1. Profile Page

2. Groups

• Strategy: What about spamming existing groups?
• SEO
  

3. Pages

• Strategy: Groups and Pages are very similar. Which makes more sense?
• Strategy: I’ve just created a Page. How do I promote it?
• Group to Page Migration
• Guidelines for Promoting Pages Outside Facebook
• Official vs Unofficial Pages
• Pages and SEO
• Ways Page Owners Can Restrict Content for Underage Users
  
• More Features Coming Soon

4. Events

• Events API
• Events SEO
  

5. Notes and Photos

• The Viral Dynamics of Photo Tagging
• Photos as a Facebook Marketing Channel: Opportunities and Limitations
  

6. Messages

7. Marketplace

8. Share / Posted Items

9. Mini Feed and News Feed

10. Feed Importing

> Data: Tracking Facebook’s International Growth by Country

> Data: Latest US Facebook Age and Gender Demographics

> Recommended Strategies for Guerilla Marketers

II. Tools for Advertisers

11. Social Ads

12. Engagement Ads

• Summary of ad units available to Facebook advertisers
  1. Sponsorship Units on the New Facebook Home Page
     • Social Video Ads
     • Sponsored Virtual Gifts
     • Events Ads
     • Pages Ads
       
  2. Advertising in the New Facebook News Feed
  3. Advertising on the Profile Page (and other pages)
     

13. Virtual Gifts

• The Future of Virtual Gifts on Facebook

14. Performance Ads

15. Localization Opportunities

16. Integrated Opportunities

17. Facebook Platform Ad Networks

• List of Leading Facebook Platform Ad Networks
• What eCPMs do apps charge? Data from Facebook application developers

18. Facebook Platform Application Sponsorships

• List of Leading Facebook Platform Sponsorship Resellers/Rep Firms
• Strategy: Why sponsor applications when I can sponsor Facebook itself?

19. Sponsored Facebook Groups

> Recommended Strategies for Advertisers

III. Tools for Application Developers

• Strategy: What is the Right Way to Market Through Facebook Applications?
• Strategy: Where do most new application users come from?

20. Profile Box

• 5 Things Developers May Not Know About the Facebook Redesign
• Profile Integration: Tour of New Facebook App Settings

21. Application Tabs

22. Application Info Sections

23. Designing Feed Stories

• Strategy: Designing High Performance Feed Items
• News Feed Optimization: Strategies and Techniques

24. Feeds 2.0

• Feed Forms
• Feed Clustering
• Action Links
  

25. Feed Publisher

• Publishing in the Feed with Feed Comments

26. Requests / Invitations

• Policy Updates: Requiring Invites to Access Hidden Features, Offering Incentives for Invites, Ads on Profile Page Prohibited
• Strategy: Facebook’s Evolving Approach to Platform Governance
• Sending Application Invitations to Non-Facebook-Members

27. Facebook Notifications

• Chat Integration: Facebook Wants More Synchronous Notifications
• Policy Update: Bulk Pre-Selection Prohibited
• Spammy Affiliate Marketers Sure to be Shut Down
  

28. Email Notifications

• Updates: Email’s Status as Core Application Marketing Channel in Doubt

29. Application Bookmarks

30. Application Directory

31. Status Update Source

32. Demographic Restrictions

33. Verification and Certification

• Great Apps Program
• Application Verification

34. Translations

• Data: Stats on Facebook Apps Built for International Markets
• Tutorial: Translating Your Applications Using Facebook’s Crowd-sourced Translation Service

35. Facebook Connect

• Overview: Integrating Facebook Connect with Your Website
• Related: Google Friend Connect
• Examples: 40 Sites Live with Facebook Connect Today
• Variety of Facebook Connect Plugins Now Available for Blogs and Wikis

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36. Analytics Tools

• List of Leading Third-Party Facebook Platform Analytics Providers
• New Metrics for Developers with Facebook Profile Redesign

37. Search Engine Optimization

38. Mobile

• Facebook for iPhone and Connect for iPhone

39. Customer Service

> Poll: Which viral channels do Facebook users hate most about apps?

> Recommended Strategies for Application Developers

Conclusion

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Facebook is increasing its push into the birthday virtual gifts business with a new profile page tweak: when friends visit your profile on your birthday, the Facebook Gifts application is selected by default, showing an array of virtual gifts available for sale from Facebook’s gift store.

The move comes after Facebook revamped its gift store in early November, moving to a virtual credits system to more easily allow for variably priced inventory. Since then, Facebook has increased promotion of its virtual gifts on the home page. All of the gifts shown by default in Facebook’s new profile page promotion cost 100 credits ($1).

Update: Facebook closed the Gift Shop in July 2010 and no longer directly sells virtual goods.

In addition, Facebook launched its own birthday notification service last November as well. As we wrote at the time, “While this change also may appear minor at first, it’s a signal that Facebook is seriously eyeing the virtual gifts business.” Adding the gift store to profile pages is another step in that direction. It has been estimated that Facebook’s virtual gifts business ran between $30-$40 million last year.

Coincidentally, leading birthday reminder application SocialCalendar, which has experienced a bit of a dip and revival in its monthly active user numbers over the last couple months, today announced the launch of its own virtual gifting service. Users are now able to send virtual gifts to friends bought using currency either earned in the application or with cash.

SocialCalendar CEO Raj Lalwani told Inside Facebook today that he expects virtual gifts to be an “important source of revenue” for the company.

Update: A Facebook spokesperson told Inside Facebook today that this feature is currently just a “test that ran momentarily” on the site. “It has not launched as a permanent feature but is part of regular functionality experiments Facebook conducts on the site to improve the user experience,” Facebook says.

Late last month, web IM platform Meebo announced that they had launched integration with Facebook Chat and MySpace Chat directly into the Meebo service. However, because Facebook has yet to announce APIs for its chat service, Meebo engineered its own “connect”-ion with Facebook’s servers using the Pidgin plugin.

However, in a blog post today, Meebo CEO Seth Sternberg announced that Meebo is turning off its Facebook Chat integration at Facebook’s request until Facebook readies its Chat and Connect APIs for security reasons. Sternberg wrote:

We have been speaking to the Facebook team, and it turns out, they’d like us to connect to their network in a different way – a way that works with their log-in security protocols. In the interim, they asked us take Facebook off Meebo, and we agree with them.

However, we were glad to hear that the Facebook team was genuinely excited to see their network on Meebo, especially since they already have plans to open Facebook Chat. They also committed resources from their Chat and Facebook Connect teams to do extra work with us to get Facebook Chat back on Meebo “really, really soon.”

Work began this week, so stay tuned. We expect some all nighters on both sides!

Other downloadable IM clients have launched Facebook Chat integration in the past, including Digsby, Adium, and Social.IM. However, those services continue to operate today, presumably because they pose less security risk.

One of the great untold stories about Facebook right now is the growth the company is experiencing in mobile use. While Facebook started 2008 with 5 million monthly active mobile users, that number had increased to 15 million monthly actives by November.

Today, at the Palm Pre launch event in Las Vegas, Facebook COO Sherly Sandberg announced that over 20 million users are now actively using Facebook through mobile platforms. Sandberg also said that Facebook’s mobile users were on average “50% more active” than the general Facebook population.

In addition, Sandberg said that Facebook Connect for Mobile, which was announced last July at f8 2008, would be coming in 2009. Early Connect applications have already emerged on the iPhone. However, while Facebook is working on a native Cocoa development kit for the iPhone, it’s not ready yet.

Facebook itself has been surprised by the rate of adoption of many of Facebook’s mobile features. For example, Facebook mobile engineer said late last year, “When we recently added the ability to comment on your friends’ status updates to the Facebook mobile site, we didn’t expect that we would receive nearly a million status comments in the first 24 hours.”

Today, Facebook operates multiple mobile services worldwide:

• Facebook for iPhone, which currently has over 4.2 million monthly active users
• Facebook for Blackberry, which currently has over 2.8 million active users
• m.facebook.com, the standard mobile interface
• x.facebook.com, an advanced mobile interface
• Facebook SMS, through which users can update their status and receive notifications

Facebook has yet to break out active users of its mobile services by country. However, it has been growing by leaps and bounds internationally, specifically in Europe and South America, throughout the last year.