Inside Facebook

Today, Visa and Facebook announced the launch of a major campaign targeted at getting small businesses engaged on Facebook called Visa Business Network. As part of the launch (see the video from Visa’s CMO Antonio Lucio and Facebook’s VP of Biz Dev Dan Rose), Visa is giving away $100 in Facebook Social Ads credit to the first 20,000 small businesses that register for the Visa Business Network - $2 million in all.

So, what is the Visa Business Network? It’s an application designed to facilitate content sharing amongst small business owners and help small business owners grow their network. Visa earns high marks for having the courage to be the first to launch a serious small business initiative on Facebook. What is still only viewed by many as a place to stalk sorority girls is being recognized by Visa as an extremely powerful platform on which structural changes to big industries are beginning to happen. This move will surely encourage others to follow.

But let’s take a closer look at the actual campaign application itself. What is the Visa Business Network application? Fundamentally, it’s a social-network-within-a-social-network.

Upon adding the app, users must register their business with VBN. Visa calls it editing your “Back Office Info,” and it feels a lot like filling out your profile page after joining a social network.

After joining, Visa Business Network provides four main features:

1. Content dashboard with articles from the Wall Street Journal, Entrepreneur Magazine, and AllBusiness.com.
2. Search tool to find others registered for the service.
3. Messaging tool for sending and receiving messages to/from others registered for the service.
4. Activity stream to view updates from your “associates” (VBN friends).

While there’s a lot to be excited about here, I must admit I am a little confused by the product Visa has created. Visa asks users to create a small business profile page that only exists to other users searching within the Visa Business Network. Not only is this page effectively totally separate from small business owners’ Facebook Pages, but it is almost inaccessible. In addition, all of the communication tools in the app are disjoint from the communication infrastructure Facebook has already built.

Visa hopes small business owners will create and maintain a second Facebook profile for their business, message other businesses, and track others’ activity all within the VBN application. It’s a powerful idea, but one that I personally would “adjust,” given how difficult it is to reach critical mass when trying to effectively create a social networking platform.

Congratulations to Visa and Facebook on launching this big initiative that is sure to accelerate the pace at which businesses think about engaging their customers on the Facebook Platform. I look forward to tracking their progress!

Good news this week for those using Facebook Groups to manage and communicate with your customer community or otherwise for marketing purposes on Facebook: Facebook has just increased the group size message blast limit from 1,200 to 5,000.

The increase makes Facebook a more usable tool for those managing large user groups. However, for those with large groups, converting your group to a Facebook Page is the right move. (Those wanting to migrate their group to a Page can fill out this request form and Facebook should do it for you automatically.)

Facebook is reportedly working on significant enhancements to Pages that will make them a more robust product for businesses hoping to engage Facebook users. While there is no limit to the number of fans Page admins can message, many businesses are finding the standard Page features insufficient for more sophisticated Facebook campaigns. Those looking to achieve deeper engagement are turning to firms like Buddy Media, Context Optional, and Kremsa Design (all sponsors of this blog) to build custom applications for their brand.

A few months ago, Facebook implemented a user-feedback driven system for limiting the volume of invitations and notifications applications are allowed to send on a per user per day basis. While this system is not perfect, it has been pretty effective at eliminating the worst abusers from the system.

Yesterday, the hi5 Platform team announced that it is implementing user-feedback driven notification quotas as well. Actually, they’ve already been implementing notification quotas manually, but this will make the process automated for everyone. Developers should expect to see their quotas in the Developer Console soon.

For developers trying to keep up with the dizzying pace of changes Facebook is making to the Facebook Platform APIs with the profile redesign, this article is for you. Here’s a quick tour of the major changes coming in the upcoming Facebook redesign and the essentials every Facebook Platform application developer needs to know.

Application Specific Tabs

At the top of the profile page there are now tabs on the profile page, instead of one long page. There are 3 tabs by defailt: Feed (which in the current design contains both feed items and wall posts), Info, and Photos. These three tabs cannot be deleted or renamed, but users can add additional tabs (up to 6) for applications of their choosing.

Application tabs can each feature one app and are 760 pixels wide. These tabs are essentially a mix between a canvas page and a profile box and offer users the opportunity to personalize their profiles by prominently featuring their favorite applications. Given that application tabs could become the most coveted real estate on the new user profiles, developers should work to provide a compelling tab experience for their existing users. In theory, the application tabs should disproportionately benefit the more engaging applications, but even for these “deeper” apps the benefits of the tabs could be somewhat impacted by the introduction of the boxes tab.

Application Boxes Tab

A Boxes tab is automatically added for users that either have more than 5 profile boxes or users with apps that don’t support main profile integration. The Boxes tab supports the existing fb:wide and fb:narrow dimensions, and is essentially a place for users’ app box “overflow.” Gone are the days of profiles littered with seemingly endless, useless profile boxes. The Boxes tab is a major step forward in the fight against profile clutter, but that improvement in user experience comes as a direct blow to application prominence on user profiles.

Narrow Column Profile Box

On the main profile (Feed and Info tabs), narrow profile boxes have a 200 pixel width and are limited in height to 250 pixels. When users switch to the new profile design, up to five of their existing profile boxes will be migrated to the main profile’s narrow column in a top-down fashion. Otherwise, application boxes can be added to the main profile when a user is on an app canvas page and clicks the “Add to Profile” button. This button will not appear on an app’s canvas page if the viewing user already has a box from that app on their main profile or box page.

Whereas today the narrow column is generally viewed as inferior placement, in the new design the left column becomes valuable real estate, particularly for apps that currently depend on the profile box for growth. Placement on the narrow column or as a distinct tab will effectively be the last foothold for app exposure on user profiles, as users’ excess profile boxes will be buried on the new boxes tab.

Application Info Sections

Another new integration point is the app info sections, which users can add via an “Add to Info” button on the application canvas pages. The Info tab features standard Facebook profile data (contact info, interests etc) in addition to structured information (text and/or images) provided by applications. App info sections are 540 pixels wide, and height is limited by number of items displayed or text length.

Facebook has long asserted that developers not fear Facebook encroaching on existing app niches and that instead applications would ultimately enhance existing, core Facebook features. By opening this integration point Facebook has finally given developers the opportunity to enhance a very central place where users build their personal profiles.

Publisher

The new publisher is essential - it’s the tool users use to post both on their friends’ feeds as well as their own. The publisher sits on top of user feeds and is the new medium for the sharing content, from wall posts to videos to app-created content. This feature streamlines the functionality of the existing Wall Attachment feature, while providing apps a new integration point directly into users’ activity feeds.

All applications that support this integration can appear in the list presented above the publisher, which will be sorted by default applications at first and later by most recent use, for users to create content. The publisher interface will be similar in appearance when viewing a friend’s page or the viewer’s own profile, but the content creation options and restrictions may change. Content created by the profile owner appears in the feed as a full story, while content created on friends’ profiles is represented by a short feed story that may be expanded.

The publisher integration is ideal for gifting apps as the publisher provides a light weight, direct means to quickly share content with friends.

New Feed Templates

In the most recent design iteration the wall and mini-feed are entirely merged into one Feed tab with filtering options. To complement the increased emphasis on the Feed tab feed stories now come in three different sizes (one line, short, and full) and can be resized by users directly. Profile owners have full control of their feeds’ presentation and can toggle between the three story sizes when available.

The one line and short sizes are largely unchanged, but the full size is a new opportunity for users to share deeper application content. Facebook will attempt to aggregate similar one line stories and similar short stories whenever possible.

Applications can automatically publish one line stories and some short stories without user approval in the owner’s mini-feed and friends’ News Feed. Additionally, apps can publish short and full stories with explicit user approval.

Summary

In conclusion, the Facebook redesign represents a paradigm shift in the ways Facebook Platform applications and Facebook profile pages interact. Developers hoping to survive the “shaking out” of applications that could occur with the redesign should take advantage of every possible point of integration on the profile in order to achieve maximum user growth and retention.

We’re here for the monetization panel, including:

• Nick Gonzalez of Social Media
• Anu Shukla of Offerpal Media
• Murtaza Hussein of Peanut Labs
• Rob Jewell of Gratis Internet
• Caroline McCarthy of CNET (moderator)

Carolina: Please explain your companies in 1 minute without using the words “engagement,” “leverage,” or “monetize.”

Nick: We help app developers make money, connecting developers with Madison avenue. We are trying to educate advertisers about how they can come to social networks.

Rob: We launched SocialCash yesterday. It’s a suite of advertising solutions for application developers focused on performance-based advertisers. There’s a lot of talk about Madison Avenue and bringing brands to Facebook, which is great, but our solutions are largely for international users, both the ad network and virtual currency.

Anu: We have a managed platform to allow developers to make money using performance advertising - soft offers like surveys, etc.

Murtaza: We help developers make money through market research. We’re not an ad network. We’re always an incremental revenue stream. We work with 60 of the Fortune 500 looking to gain consumer insight.

Caroline: Keeping this colorful…what is the worst ad campaign you’ve ever seen inside social networks?

Mustaza: Win a free iPod.

Anu: Trying to sell things while people are waiting for the next move.

Caroline: What about Red Bull’s Ro-cham-bull? Did everyone get bored with it?

Caroline: Guess so. How do you deal with the fact that applications come in and out of popularity quickly?

Murtaza: Applications that focus on engagement are better than applications that have a quick cycle.

Nick: There are people who can sustain it. Look at Playfish or Friends For Sale.

Rob: We’re not that worried about it, because we have a 100% fill rate.

Caroline: Which developers are making the most money?

Anu: I can’t share that, because I don’t want to compromise the developers.

Murtaza: Virtual currencies are doing really well, especially internationally.

Rob: The US is only about 20-30% of our traffic .

Anu: Virtual currencies have caught on in the US depending on the game dynamics.

Caroline: Nick, you haven’t been talking about virtual currencies, what do you think?

Nick: The best kind of virtual currency is the kind that developers can get users to give to them directly. Folks are Paypaling money to the developer of Mouse Hunt, and he’s keeping everything except what Paypal takes off the top. The best games have users that pay for currency.

Anu: We support Spare Change, which is a Paypal front end for Facebook.

Caroline: How are you dealing with the downtown in display spending?

Nick: In the beginning, it was all CPI and CPA. Now, we are doing things like demographic targeting which are giving a shot in the arm to remnant inventory. It will be a mix of virtual currencies, brands, and ad networks, not just one thing.

Anu: I think we are recession proof, because CPA advertisers are getting real value for their dollar.

Murtaza: On the market research side, we haven’t seen a dip.

Question: What about brand advertisers?

Rob: It’s still really early, it takes those guys a long time to actually move.

Anu: We’re seeing that advertisers are concerned about showing up next to UGC. Movies and music are two good areas to focus on though. For example, we recently did a movie promotion on Slayers and Vampires and advertisers are interested in reaching people in this kind of targeted way.

Question: Can you give us an idea of how many installs people are buying with CPI campaigns?

Nick: The brands see the app as the ad, and will pay a lot of money for the install, much more so than for other forms of advertising. I’m not sure what those rates are, but they’re perfectly happy with just driving traffic to that application. If brands make bad apps, then obviously it won’t be sustainable.

We’re here at Graphing Social Patterns East today. We’ll be live blogging throughout the day’s sessions. This session, “Facebook Business & Marketing Solutions,” is by Facebook’s Kent Schoen.

Kent Schoen, Product Marketing Manager at Facebook: Today, I am going to take you through Facebook from the perspective of the marketer. We opened the site across the world in 2006. The developer platform is now a little over a year old and it introduced a real way for businesses to have a place within the social graph. Pages have further expanded businesses’ presence in the social graph.

On Facebook, a user has a profile, connects with friends, and establishes a social graph. As a marketer you must look for a way to gain access to that social graph. Our perspective was that advertising offline was a little bit different than what you are able to do once you bring the social graph into the equation in its digital form. There is now a new and efficient way of accessing these more structured connections between people. Through billboards, phone book ads, etc you can establish one-to-one relationships of your brand with people. With the social graph involved you gain a direct channel for a conversation with users who can further spread your message.

The list of tools to drive engagement on Facebook include share, Events, Pages, and Applications.

• Facebook Events is not the most robust set of features in the world (relative to Evite etc) but given its integration in the social graph it is leveraged to a greater extent by the users.
• There are now over 150k Pages with over 85 million fan connections. The idea behind pages is to bring the most compelling content to where the users are.
• There are now over 24,000 applications on Platform, some that are used to be a compelling or entertaining means to distribute a brand’s message. A single digit percentage of a user’s friends will see that user’s actions via the News Feed, so there is a need for alternative means to spread content.

As a marketer, in order to reinforce your brand there is value in having people see that content via the news feed and not necessarily react immediately.

Ads are a means to accelerate activity that is already occurring. One way to do that would be to target an audience using the rich data that is unique to this environment. People respond over two times more when there is an additional content around an ad. Optimization around keywords flow through to the Facebook environment.

Question: Do you have any data you can share around the impact of the social context around an ad?

We’ve seen that on average having a social action associated with an ad increases the click through rate over 2x.

Question: Will data from the impact of social context or the thumbs up/thumbs down data shared with advertisers?

You can run ads both with and without the social context to compare results. It’s unclear how we will use the data from the thumbs up/thumbs down feature, but if it is useful we will likely share it in the future.

Facebook is updating its platform policy guidelines to prohibit developers from making it easy for users to accidentally send app notifications to hundreds or thousands of friends with one click.

While Facebook has taken product steps to solve this problem with the multi-friend selector for invitations and notifications, it is now adopting more general policy positions for all viral channels with which it can enforce punitive actions against overly-spammy applications.

The updated guidelines are listed in the Developer Wiki, and go into effect at 12pm PT on Tuesday, June 17. They are summarized by these overarching principles:

• Users must not be surprised by the outcome of an action they take.
• To ensure users only take actions they intend, an application must avoid one-click triggers of actions that apply to multiple people, except in special circumstances.
• To ensure users only take actions they intend, multiple recipients must be selected by the user, rather than pre-selected by the application.

As social networks continue to update their policies to take into account the different ways developers are using (and abusing) different communication channels, platforms are taking different policy approaches to viral channel access. MySpace recently prohibited applications from offering any game-like incentives for sending app messages. By contrast, Facebook is allowing users to send as many messages as they like, as long as the recipients are actively chosen by the sender.

With the rise of virtual currency within social games and other applications on social networks, app developers have discovered a new way to make money: let users complete offers (that generate real CPA money for the developer) in exchange for virtual currency within the app.

Managing and optimizing these offers is exactly what Offerpal Media does. Only one year after raising money and 7 months after launching with its first Facebook application partner publisher, (fluff)Friends, Offerpal Media has 40 employees and works with some of the largest app developers, including Friends For Sale and (Lil) Green Patch.

Inside Facebook sat down with Mitch Liu, Co-Founder of Offerpal Media, to learn more about his vision for the company and how they’re working with developers on Facebook, MySpace, and other social networks.

Mitch, what is your vision for Offerpal?

Well, we originally started out trying to build our own properties, but we quickly saw a bigger opportunity in helping developers of social applications on Facebook, other social networks, and the web monetize their apps. So we switched to a platform strategy to provide a “managed offer network” for social apps. Since then, we’ve been really focused on building out our targeting technology and providing a good user experience.

Which Facebook developers have you had the most success with so far?

A couple things come to mind. We have a great relationship with Friends For Sale, where we’ve actually been running incentivized banners. The offers are customized to their app, offering ways to “get more money to buy your friends,” etc. Also, we have a great donation mechanism working with (Lil) Green Patch. Users can complete offers and a portion of the proceeds are donated to save the rainforest.

What portion of your business is inside Facebook and social networks right now?

About half of our business is actually with social websites. For example, we work with crunchyroll and integrate with their points system. Users can dress up their avatars with points they earn through our offers. We’re doing something very similar with Blake Commagere in his Vampires/monsters series of apps with Vampire Bucks, etc.

It’s possible for developers to go direct to advertisers and set up CPA deals themselves. How does Offerpal help?

Developers are pretty busy people, and don’t have time to go out and figure out which offers will work well for them. We’ve already figured out which offers work well on which platforms, and then our technology optimizes the offers for each developer.

Which offers work best on Facebook?

Funny you should ask… Actually, mobile offers work well on Facebook. Some of the softer offers, like market research, also work well. Subscriptions also work well. It varies by country - for example, our Blockbuster offer works very well in the UK.

So what kind of stats are you seeing across your network so far?

Some of our publishers are seeing very high eCPMs. The average is about $50 per 1000 daily active users, with some over $200 per 1k DAU. We’re also seeing very high completion rates of 4% - this is due to how integrated we are with the applications. Developers often see increases in page views per user per day as well.

We have about 1,000 advertisers total - about 40% are US/Canada, 30% UK/Europe, and 30% Asia.

Thanks Mitch. Any last words?

As long as there’s a compelling way to spend currency in your apps, this is a very engaging way to monetize.

In an interesting sign of the times, major US mobile phone carrier Verizon is moving its Verizon Community social network from the Verizon website over to the Verizon page on Facebook. Verizon Community, which let users write blogs, post photos, and discuss in forums, will close. In an email to members last week, Verizon wrote:

In an ongoing effort to provide our users with the most dynamic and feature rich community experience, we have decided to join our Verizon Community at Facebook.com/Verizon beginning on June 16th, at which time the Verizon Community at community.verizon.net site will close.

We would like to thank all of our members for their continued support of and participation in the Verizon Community.  We have enjoyed reading your posts and blogs and we are glad that we were able to provide you with a place to meet new friends and share photos from your lives.

As we make the transition to joining the Verizon Community on Facebook, we invite you to start copying and saving your posts, blogs, photos, and friends list as soon as possible.

Facebook is working on a major upgrade to Pages to make them more compelling for businesses to build a deep presence on Facebook. We’ll have more details as they become available. Clearly, Verizon decided that trying to run its own branded social network wasn’t worth the effort.

Responsive customer service is of great importance to Facebook and app developers alike. However, the inherent limitations of the platform make establishing channels for user feedback an unnecessarily difficult task.

Unsurprisingly, given Facebook users’ familiarity with wall-to-wall communications with friends, for most applications the wall is the most active channel of user feedback. Most users post on application walls with a question or piece of feedback and expect the developer to reply. Responses can of course be posted directly to app walls as well, but without a means of notifying users, more often than not replies go unread.

One solution to this problem would be to use private messages to directly respond to individual wall postings, but Facebook’s messaging limits make this approach unworkable (the exact caps are unknown). In my experience, being able to communicate through this channel has been valuable, particularly when compared to alternatives like support email and the Reviews wall. The reward was not worth risking my account, however, as I frequently hit the message limits - and in one instance, actually had my account disabled entirely.

The addition of the Reviews app to application pages has been a source of some controversy, as fake reviews have popped up with some regularity. While planted posts were certainly not the most desirable side effect of the Reviews wall, spam is a more serious problem. Spammers openly adopted the Reviews wall, and today their posts litter most application pages. Spammers add five star ratings to encourage developers to not delete their posts as those ratings can drive up an application’s average rating, while undermining the validity of the entire rating system in the process.

Additionally, for applications focused on product reviews and ratings (like Flixster, Visual Bookshelf, etc.), the reviews wall is a source of confusion for some users, as individuals write and post reviews of books or films and mistakingly confuse the Reviews wall with the actual applications. Finally, some Reviews merit a developer response, but as with the wall the only means of truly replying is via private message. Given these problems, it comes as no surprise that many developers take steps to reduce the Reviews wall’s visibility, usually by moving it to the bottom of the page beneath the wall and discussion board.

Not all is lost, however, as the discussion board is a useful channel for user feedback. Replies to posts generate notifications that ensure that conversations remain open. The discussion board is evidence that workable tools can facilitate meaningful customer service which ultimately benefits both users and developers. Why can’t Facebook make customer service easier for developers?