Facebook Starts Alpha Testing In-House Platform Ad Network

Facebook focused on Platform growth over Platform monetization in 2008: the company largely focused on launching the profile redesign and Facebook Connect instead of other monetization initiatives.

However, it looks like 2009 may be the year Facebook starts ramping up its monetization efforts: today, Facebook announced that it has started testing an in-house ad network with developers.

According to the company,

Starting today you may notice a few applications occasionally serving Facebook Ads directly in their canvas pages as a part of a small alpha test. We will use the results of this test and other tests that we do to determine the best ways we can help you monetize. For this initial test we picked a few developers that had a variety of different user bases and application types to give us the kind of data we need. We will examine the results to decide whether to open up the program to more developers in the future.

The move has been expected for some time by companies that have built large advertising networks within the Facebook Platform ecosystem. Companies like SocialMedia, RockYou, AdParlor, AOL’s Advertising.com, SocialCash, Sometrics, Adknowledge, Rubicon Project, VideoEgg, Google’s AdSense, and other ad networks have been serving app developers since the Platform launched. Others, like Super Rewards and Offerpal, manage networks of offers for developers which generally pay on a CPA basis.

How has performance fared? While some direct and integrated deals can go for anywhere from $5 to $20 CPMs, most developers have been reporting between $0.10 to $0.50 CPMs on most Facebook Platform remnant inventory (with European prices being generally slightly higher). And several developers have reported very high eCPMs by integrating offers into their apps and games.

While it’s too early to tell exactly how Facebook’s ad network efforts will fare – and affect other players in the space – rest assured everyone will be watching the alpha test closely. As the Platform on which all apps and monetization efforts run, Facebook faces the challenge of helping developers monetize directly while still cultivating a robust monetization ecosystem for third parties. We’ll have more as the alpha test progresses in the coming weeks.

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9 Responses to “Facebook Starts Alpha Testing In-House Platform Ad Network”

  1. Rob Jewell says:

    This should be a good development for the whole industry. We’ve been helping developers monetize their apps since early 2008 and we’ve seen a lot of ups and downs as various networks have come and gone (and developer eCPMs have swung widely). Oftentimes, developers have had to put up with highly aggressive and occasionally deceptive ads to translate their impressions into money. It really shouldn’t have to be that way, and that’s not a sustainable industry. FB entering the fold — and some new technologies we and other companies are releasing — should raise the bar across the board.

    Rob Jewell
    CEO / SocialCash.com

  2. Facebook Mixing More “Suggested” Content in with Social Ads says:

    [...] This is likely one of the many tests Facebook is conducting to increase engagement and ad performance on the site. Yesterday, Facebook announced it is also testing a new in-house ad network for developers. [...]

  3. Dave Williams says:

    I knew it was only a matter of time before facebook starting making use of their profile data for better ad targeting on applications. To-date this has seemed like a massive missed opportunity for facebook. Personally, i think this is great news for app developers to better monetize their inventory down the road by being able to tap into the growing volume of advertisers on facebook’s self service platform. On the other hand, it seems that this is not good news for app network companies that don’t have the ability to target app inventory based on terms of service limitations in how they can use profile data for targeting. I am curious to see how this roles out and comments from companies such as RockYou, SocialMedia, Lookery and others. I would love to be apart of the early FB test.

    Dave Williams
    CEO, BLiNQ Media LLC

  4. Facebook Wants You to Monetize Your Apps | Press Release -Reputation Management says:

    [...] The testing of such a network is not entirely surprising. "The move has been expected for some time by companies that have built large advertising networks within the Facebook Platform ecosystem," says Inside Facebook’s Justin Smith. [...]

  5. SocialCash Tweaks Model, Launches Headliners Ad Unit says:

    [...] of the rich data available inside Facebook’s social graph. Facebook itself has launched an alpha test of its own in-house advertising network with a small number of app [...]

  6. More Rumors Circulating About Facebook Platform Payments System says:

    [...] Facebook chose to optimize for Platform growth over Platform revenues in 2008, but 2009 appears to be the year of alpha testing Platform revenue streams. Earlier this year, Facebook announced a small alpha test of its own in-house ad network. [...]

  7. 4 Ways Developers Should Consider Testing The New “Connection Targeting” Feature in Facebook Ads says:

    [...] Only recently has Facebook started testing its own in-house Platform payments system (May) and Platform ad network (back in [...]

  8. Social Game Developers Spending Millions on Facebook Advertising says:

    [...] Facebook’s in-house platform ad network is still in early stages of alpha testing, it may in fact be driving significant revenues from [...]

  9. The Future of Social Games: How Facebook is Connecting Players, Developers, & Dollars says:

    [...] has launched alpha tests of a payment system and ad network for developers. Is Facebook likely to get more involved with the game monetization ecosystem with [...]

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