Groupon has signed an agreement to allow full service advertising services provider AdParlor to handle the local deals network’s entire Facebook advertising spend. The exclusive contracts represents tens of millions of dollars in spend, as Groupon uses Facebook ads extensively to drive email signups and sell daily deals.

However, Facebook’s own upcoming local group buying coupon service Deals will have placement in the news feed, so Groupon’s ads will soon have to compete with a more centrally visible competitor. This could drive up the cost per acquisition for Groupon, which could lead it to either advertise less or have to spend more with AdParlor to achieve the same conversion volume.

Groupon has been advertising on Facebook and using Facebook Connect for over a year. Now, Groupon’s API will be connected to AdParlor’s Facebook Ads API tool, which allows the company to A/B test tens of thousands of ad variants and dynamically shift budgets and optimize bids for maximum return on investment. AdParlor has one of the most efficient and sophisticated tools for attaining conversions via Facebook ads.

By relying on AdParlor, Groupon can increase efficiency and concentrate on other parts of its business. Facebook’s location, interest, and demographic targeting is crucial to Groupon’s advertising strategy, so it needs to continue advertising there even as Facebook prepares to launch a competing daily deals coupon service.

With Groupon and other daily deals providers relegated to the sidebar ad units and Facebook’s own Deals product front and center in the news feed. Therefore, the Facebook user base’s coupon needs might be met before users can notice Groupon’s ads.

Finally, the deal with AdParlor could lead other advertisers to assess their own Facebook advertising efficiency, and consider signing with AdParlor or another Facebook Ads API service provider.

Some application developers who use unapproved advertising networks including AdSense are now saying that Facebook has begun contacting them, asking them to stop using ad networks that have not signed its Platform Terms for Advertising Providers. Facebook’s deadline to only use ad providers on its whitelist was February 28th, but this is the first major case of enforcement.

Ad networks aren’t heavily used by Facebook developers because there are more effective Facebook-tailored options. Still, those who do are concerned because they haven’t found approved ad networks which meet their standards. However, Facebook has given them plenty of notice, first announcing the ad network whitelist and indicating that developers would have to use them three months ago.

A post to the “Facebook Developers” Group explained that Facebook had contacted a developer who happened to be using AdSense with the request, and he was now seeking suggestions of which ad network to switch to. Facebook recently added 28 more ad providers to the whitelist, bringing the total count from which developers can choose to 72.

The fact that Google has not signed the terms yet is a part of its  continuing impasse with Facebook, which last flared up when Facebook refused Google’s request to allow users to export the email addresses of their friends the same way they can export their Gmail contacts. That issue didn’t result in any functionality change for Google, and users only had to endure a slightly longer Gmail contact export flow.

Asking developers to switch away from unapproved ad networks including AdSense  directly impacts developer business, though. Some might see the policy enforcement as the precursor to further restriction in the future, and could cite it as a reason why not to build on the Facebook Platform.

However, the enforcement shouldn’t have been a surprise to developers as it posted to Developer Blog about it several times over the past few month. Facebook’s terms are there to protect user privacy and keep their data from being used elsewhere — and purposefully or not also preclude other companies, like Google, from using their own technology and reach to make more money off targeting ads themselves. We don’t expect Google to sign on any time soon.

Update: To clarify, Google AdSense was not singled out, rather one developer who was contacted by Facebook happened to have been using AdSense. Facebook gave Google two months to sign its terms before enforcement began, and didn’t begin this enforcement until almost another month after the deadline. Facebook has posted to the Developer Blog to inform people about the policy and the enforcement, so the request to switch should be been expected.

Cueler is a useful and easy Facebook application that allows Page administrators to automatically synchronize their YouTube videos to their Facebook news feeds. The Silicon Valley startup aims to help Page admins specifically use videos to promote their Facebook presence.

Once Cueler is installed, every time a user uploads a YouTube video, it publishes to the Facebook news feed. Page administrators may opt for a standard message to accompany this video, or customize it to suit their fans’ needs.

After visiting the Cueler app on Facebook, the install is fairly simple. One simply selects which Facebook Page to install Cueler to, then configure your settings. This means adding your YouTube URL, whether the videos include any uploaded or a specific playlist, whether you want to automatically add new YouTube videos to the Page and customizing the message that posts with each new video.

Cueler creates a YouTube Videos tab with a banner video, a Page admin must select a banner video as the centerpiece of this new tab. Admins may also use Cueler to require Facebook users to Like their Page before being able to watch videos,, and they may appear in 400 or 520 pixel widths. Once these settings are in place, hitting the Configuration button and re-editing them is very easy.

Once the app is installed, users may invite others to the Page, as well as share and view videos right on the Facebook Page. Which is to say Cueler doesn’t link back to Facebook, but allows users to stay on the platform and view the stories, encouraging people to continue to interact with the Page. For more info about the app visit the Facebook Page or watch the YouTube video tutorial.

Inside Network itself is hiring for an Operations and Sales Support Coordinator, a job that will put you in the middle of the industry as we continue to build out our business operations. It’s part-time and open to entry-level applicants in the Silicon Valley area. More details here.

Here are this week’s highlights from the Inside Network Job Board, including positions at Inside Network, Hands-On Entertainment, Diversion, Games Cafe, and Electronic Arts. The Job Board is dedicated to providing you with the best job opportunities in the Facebook Platform and social gaming ecosystem.

• Operations and Sales Support Coordinator (Palo Alto, CA)

• Lead Artist (San Diego, CA)
  
• Game Artist (San Francisco, CA)

• VP, Online Media (Hollywood, CA)
• Lead Flash/AS3 Client Engineer (Hollywood, CA)
  

• Social Game Designer (Calgary, AB)

• Sr. Customer Experience Manager (Redwood City, CA)

Listings on the Inside Network Job Board are distributed to readers of Inside Facebook and Inside Social Games through regular posts and widgets on the sites. Your open positions are being seen by the leading developers, product managers, marketers, designers, and executives in the Facebook Platform and social gaming industry today.

Scoreboard is a new Facebook application from Screenpop that allows the user to interact with the sports show in a game-like interface. The app incorporates video, comments, viral elements as well as Credits and Scoreboard is one of several other apps — such as ustream, Dark Knight and Facebook Live — which are turning Facebook into a viable video content channel. The app launched on March 4.

The app is easy to use and loads to the sports show interface on the Watch The Show tab. You can see the upcoming show schedule and watch the first game, or click over to the Play The Game tab and begin to interact with the show.

This game portion of the Scoreboard app allows users to predict scores of upcoming football (soccer) matches in the English Premier League. During the week leading up to the game users may make predictions, comment and interact with other users, and use in-game currency to make “bets” on these predictions.

When the hourlong show portion of the app airs every Friday live, it will incorporate content generated from the interactive portion of the app, creating the feel of a competition between Facebook users and the BBC Radio pundits and former pro football players that host the show.

The game portion of Scoreboard allows users to make predictions, augment these with in-game “bets,” track your progress (Achievements), post comments and interact with other users, win “trophies” and post to the stream. The app also incorporates Credits to allow users to further augment their predictions with in-game currency to “boost” their predictions.

Facebook users will be able to stream several pre-season major league baseball games for free from the MLB’s Page or stories it publishes to the news feed. Sports have proved to be popular discussion fodder on Facebook, so the promotion could expand the MLB’s audience and generate a high volume of engagement.

Unlike Warner Bros renting films for Facebook Credits through dedicated apps, bringing the streamed video content to the center of user experience has much greater potential for wide reach and virility. If the MLB experiment succeeds in either driving significant Likes or engagement on Facebook, or selling streaming content subscriptions offsite, more brands could look to stream video from the news feed.

Users can easily re-share the post, Like it, comment on it to converse with other baseball fans, and or publish their own feed story discussing the game. And if the millions of status updates about World Cup games are any indicator, users will be eager to employ these social features.

Likes, comments, and shares will raise awareness of the MLB’s game streaming, which is planned through the pre-season but could include regular season games as well. The MLB hopes users will grow to enjoy streaming games online, and then purchase a full season subscription on mlb.com, which it is promoting through a tab on its Page.

In this way, video streaming on Facebook could be used for premium content lead generation, as well as a way to grow a content provider’s Page. This indirect model could end up driving much more revenue than trying to make money directly through content sales on Facebook.

Horoscope Facebook applications were big on our list of top 20 by daily active users this week, there were also lots of games, video apps, a birthday reminder, Twitter and Badoo. The list was compiled based on AppData, our data tracking service covering traffic growth for apps on Facebook, and covers apps that grew the most in the past week.

Top Gainers This Week

	Name	DAU	Gain	Gain,%
1.	Daily Horoscope	1,088,894	+831,493	+323%
2.	CityVille	21,212,965	+735,392	+4%
3.	Badoo	4,059,088	+500,416	+14%
4.	Games	1,936,176	+412,910	+27%
5.	Windows Live Messenger	14,719,906	+254,111	+2%
6.	開心探寶	251,590	+247,459	+5,990%
7.	Mynet Çanak Okey	752,289	+239,662	+47%
8.	2011星座運勢	235,996	+216,013	+1,081%
9.	Bejeweled Blitz	3,671,801	+163,537	+5%
10.	The Fortune Teller	1,245,964	+151,898	+14%
11.	Birthday reminder	167,915	+141,598	+538%
12.	Twitter	526,998	+138,283	+36%
13.	Tư vấn vui	133,080	+131,817	+10,437%
14.	Videoloji	132,436	+121,404	+1,100%
15.	Zoo World	554,358	+118,806	+27%
16.	德州撲克(中文版)	528,740	+109,921	+26%
17.	Komşu Çiftlik	725,530	+104,307	+17%
18.	Yılbaşı Hediyeleri	100,135	+97,637	+3,909%
19.	HTC Sense	4,886,900	+91,361	+2%
20.	Gourmet Ranch	311,834	+82,671	+36%

Daily Horoscope topped our list with 831,500 DAU this week. 2011星座運勢, a Chinese horoscope app, saw 216,000 DAU; the app publishes a story to the feed when a user begins using it. Video apps were also popular. There was Videoloji, a Turkish app with 121,400 DAU and Yılbaşı Hediyeleri, which saw 97,600 DAU.

Elsewhere on the list was the ever popular Badoo dating app with 500,400 DAU, the app continues to grow in countries other than the U.S. and sends friends notifications after a user answers questions about their online network.

Windows Live Messenger’s Facebook integration saw 254,100 DAU. A Birthday Reminder app grew by 141,600 DAU mostly in the Philippines and Indonesia. Twitter’s Facebook app grew by 138,300 DAU in the U.S., Indonesia and Mexico. Tư vấn vu, a Vietnamese app, is a quiz game for consultants and grew by 131,800 DAU. Then there was HTC Sense, an Android phone app, with 91,400 DAU.

Facebook is showing a special story in the news feed urging users to subscribe to updates for its new Deals local pre-paid coupon service, and to invite their friends to subscribe too. A link in the story leads to a new subscription page for Deals which says that subscribers will soon get news feed updates about nearby promotions.

This aggressive tactic will rapidly generate awareness of Deals and produce many subscribers to the forthcoming updates, helping it catch up to established daily deals providers such as Groupon and lure local businesses to consider offering pre-paid coupons through Facebook. The first cities to receive these updates will be San Francisco, San Diego, Dallas, Austin, and Atlanta.

This new Deals service will let you buy coupons such as “Unlimited bowling with 6 friends for an evening for $60 (75% off)” or “Luxury winery tour and 25% off all wine purchases for $50″. Facebook bills it as a way to “”discover new things to do with your friends and get unique offers at the same time.” This is different than what Facebook now calls “Checkin Deals” — the location-based rewards service which lets users earn discounts and gifts from local businesses for checking in via Facebook Places.

The news feed story, headlined “Deals on Facebook. Now Better With Friends” includes a “Tell Friends” link which launches a multi-friend selector for sending friends invites that generates notifications linking back to the new Deals subscription page.

Facebook has also launched a new information page for businesses interested in offering Deals, linked to from the subscription page. It cites help from Facebook marketing specialists, the site’s huge user base, the ability to build customer loyalty, and examples as reasons why Facebook Deals is valuable to businesses. Admins of Facebook can can fill out a web form so they can be contacted by Facebook to start offering Deals.

Checkin Deals launched in the US in November, and in Europe in January, but has yet to see widespread adoption by businesses. The Facebook.com/Deals URL previously linked to a locator where users could view a map and list of nearby Checkin Deals, but in Facebook’s naming tradition, it decided “Deals” better described its new coupon service, and so it Checkin Deals are now just a subcategory.

By showing announcements of new Deals as stories on the home page’s news feed, which users frequently view and know how to share, Facebook may be able to generate such a swell of user demand for Deals that businesses feel compelled to offer them. While users already see when a friend redeems a Checkin Deal, coupon Deals subscribers will “get notified when Deals are available in [their] area and receive regular updates about new offers.” The Deals info page says these updates are “coming soon” and that additional cities will also be added soon.

When users subscribe, they’re asked to confirm their location. Facebook allows any city to be entered, so those outside of the initial launch cities may start to receive updates if Deals Updates roll out to that location. Users also receive an email confirmation upon subscription, again asking them to invite friends.

The initial story urging users to invite friends appears to have been given extraordinarily high news feed prominence. This means millions will see it, potentially creating an enormous audience for these updates literally over night. Facebook rarely injects stories into the news feed, preferring to let users opt in to updates, even regarding things as important as AMBER Alerts about missing children.

This example, along with its home page headline about voting in the last election, shows the power Facebook has to deliver a message to large portions of its user base. If Facebook abuses this power, it could lead users to return to the site less frequently because they feel that their news feed isn’t as fun or social.

The use of a special news feed story to promote the new Deals coupon service is a bold move on Facebook’s part. The aggressive strategy may  instead be designed to rapidly increase the Deals subscriber base so it can compete with Groupon, LivingSocial, HomeRun and other daily deals providers who have a huge headstart when it comes to email addresses.

Facebook has finally shown its distribution might, demonstrating how the site can be used to quickly grow its own features, not just third-party apps and games. None of its recent product launches, including Places, Groups, Messages, or Questions received this kind of promotion, but none of them had the immediate revenue generating potential of Deals.

Update 3/16/11: We’ve made several edits to this article to clarify that Facebook is asking users to subscribe to a new local pre-paid coupon service similar to Groupon and other daily deals services. This Deals service is different than the location-based Places checkin rewards program Facebook launched in November, now known as Checkin Deals.

Eventbrite shared data at its South By Southwest Interactive panel on social commerce showing that when the site integrated Facebook Connect at the start of 2009, it hit its inflection point and doubled gross ticket sales that year. The data could inspire more ecommerce sites to consider significant Facebook integration.

The site has also become an even more crucial tool for organizers of SXSW events this year, since the conference reportedly grew 33% to 20,000 registered attendants from 15,000 in 2010. Eventbrite’s ability to cap or cease RSVPs while leaving an event’s page up helps party sponsors avoid negative sentiment by reducing overcrowding and the number of people they have to turn away at the door.

Facebook Events, which experienced a surge of popularity at SXSW 2010, doesn’t offer this function, allowing thousands to RSVP to a party with a capacity of 300. This limits the feature’s value to organizers of popular or exclusive events. Facebook should consider adding RSVP cap or suspension functionality to expand the scope of the gatherings the feature can be used promote.

Eventbrite has previously indicated that Facebook is its top source of referral traffic, but today co-founder Julia Hartz also noted that it ranks Google search at number two, Twitter at number three. and LinkedIn at five or six.

Prior to the Facebook integration, Eventbrite’s referral sources in 2008 ranked:

1. Direct traffic
2. Google /organic
3. Eventbrite.com / referral
4. Yahoo / organic
5. Google / cost per click advertising
6. Facebook / referral

The self-service event promotion and ticketing service website has deepened its Facebook integration since 2009, now allowing users to see events their Facebook friends are attending. The average Facebook share of one its events drives 11 clicks and $2.52 in sales, compared to $2.34 via email share, $0.90 via LinkedIn, and only $0.43 via Twitter.

Last year it looked as if Facebook might partner with Eventbrite to let Facebook users earn affilate fees from ticket buyers who they referred. However, the system never went live and Hartz confirmed the sites have no official partnership at this time.

Post-Purchase Shares and Music Generate More Revenue

Hartz explained that 40% of Facebook shares from the site occur pre-purchase, but that the 60% occurring post-purchase generate 20% more sales per share. This indicates that ecommerce sites should focus more on driving post-purchase shares.

Another new data set Eventbrite revealed was the breakdown of average revenue generated per Facebook share of different event categories. Music events drove an enormous $12 per share, suggesting that musicians have a lot to gain from selling their own concert tickets via EventBrite, especially those with existing Facebook followings.

The rough breakdown of revenue per share by category is:

1. $12 – Music
2. $11 – Fundraising / Charity / Giving
3. $6.75 – Social Events / Mixers
4. $5.75 – Food / Wine
5. $2.10 – Classes / Workshops
6. $1.90 Conferences / Seminars
7. $1.10 – Networking / Clubs / Associations
8. $0.90 – Business / Finance / Sales

These figures could be slightly confounded by total number of events in each category and the quality of the event’s page. Still, they demonstrate serious revenue potential from promoting fundraising, food and wine, and social events through a combination of Eventbrite and Facebook.

Games on social networks became a billion dollar business in 2010, enabling the market’s big developers to secure significant investments and pursue sizable exits. Now that Zynga has clearly established itself as the 800 pound gorilla, EA/Playfish are bringing more IP to market, and Playdom is being integrated across Disney, what opportunities remain for other small and medium sized social game developers in 2011?

Inside Network is proud to announce a new original research report by Justin Smith and Charles Hudson profiling social gaming developers outside the largest, most established companies, entitled Inside Virtual Goods: Profiling the Social Gaming Middle Market 2011. This report presents direct interview results from today’s most influential small and mid-sized developers aside from larger players Zynga, Playfish, Playdom, CrowdStar, and Kabam.

Inside Virtual Goods: Profiling the Social Gaming Middle Market 2011 is available for discount pre-order now, and will be released to the public on March 29.

What are top mid-sized developers’ expectations for the social gaming space in 2011? How will existing players fare as Facebook shifts the social gaming landscape through the rollout of Facebook Credits and continued changes to the platform? Inside Virtual Goods: Profiling the Social Gaming Middle Market 2011 shares insights directly from the front lines on social game monetization, development, and customer acquisition and growth.

About the Report

Inside Virtual Goods: Profiling the Social Gaming Middle Market 2011 shares insights from over two-dozen developers into key questions facing social gaming in 2011.

As with previous editions of Inside Virtual Goods, researchers Justin Smith and Charles Hudson have conducted several months of original research comprising interviews with developers and entrepreneurs in social gaming. This edition of Inside Virtual Goods will present exclusive interview results from the developers themselves, preceded by original profiles of all companies included in the survey. Social gaming is among today’s most competitive areas in technology; specific responses have been anonymized to encourage authentic, critical response.

What We Cover

1. Overview of the competitive landscape – Over the past year, the social gaming industry has been shaped and reshaped by enormous growth, market consolidation, and changes to payments and monetization brought on by the spread of Facebook Credits. What kind of competitive landscape and new opportunities should today’s developers anticipate in the year ahead?
2. Profiles of key players – Companies like Zynga, EA / Playfish, and Disney / Playdom are regular topics in business news, but social gaming is an industry with dozens more key players whose rivalry and innovation are determining what the industry will look like in six and nine months. This section presents detailed, original profiles of the middle market companies to watch in 2011.
3. Developer perspectives on the key issues – The responses in this section have been curated to reflect the diversity of viewpoints in today’s vibrant social gaming industry, and cover the following areas:
   • Distribution
   • Monetization and credits
   • Game design and development
   • Fundraising

See the full table of contents below:

Table of Contents

I. Introduction

II. Company Profiles

1. 50 Cubes
2. 6waves
3. A Bit Lucky
4. Casual Collective
5. Cie Games
6. Digital Chocolate
7. Five Minutes
8. Funzio
9. Gaia Online
10. GameHouse
11. GSN
12. Happy Elements
13. iWin/Backstage
14. Lionside
15. Lolapps
16. Metrogames
17. MindJolt
18. Omgpop
19. Popcap
20. RockYou
21. Social Point
22. TheBroth
23. Ubisoft
24. Wooga
25. ZipZapPlay

III. Developer Perspectives

1. Distribution
   • Viral Channels
   • Paid Acquisition
   • Off-Facebook Channels
2. Monetization
   • Credits Integration
   • Results with Credits
   • Credits Issues
3. Game Design & Development
   • Projected Budgets and Timelines
   • Target Audience
   • Genre Innovation
4. Financing Landscape
   • Fundraising Plans
   • Perspective on M&A

IV. Conclusion

New Insights on the Competitive Landscape

In 2010, social games began to show what kind of value can be created on top of social networks. 2011 will be an even more important year.

The social gaming market is evolving rapidly against a backdrop of shifting challenges, and still-emerging opportunities — social gaming will be this year’s industry to watch. If you’re involved, or are considering jumping in, Inside Virtual Goods will be one of your most important tools.

One year of original data and exclusive in-depth reports delivered on a quarterly basis is $2,495 and contains:

• A detailed overview of the current state of the industry
• Specific estimates on market size by segment
• Diagnosis of key opportunities and issues by segment