A number of mobile developers are reporting more engagement and better monetization among Facebook-connected users than users who do not log in with their social network account, according to a post on Facebook’s developer blog today.

In December, the company announced that nearly 200,000 iPhone and Android apps connect with Facebook. However, many people still think about the Facebook platform being distinct from mobile. Although Facebook does offer a vertical platform where apps can be used within the Facebook.com canvas, it’s also possible for Facebook to be integrated horizontally across any other platform, including iOS, Android and the mobile web. What the company is trying to do now is convince developers why they should integrate their apps with Facebook.

Facebook suggests that a socially connected user is a more valuable user. Developers like Wooga, Ludia, Buffalo Studios and others have offered some evidence to show that users who log into their mobile games with Facebook spend more time and money in the apps. However, the social network is simultaneously gaining a reputation for being a less open platform than it portrays. Today TechCrunch reported that Facebook has blocked data access from a mobile social search app called Wonder, and last week the company took some similar measures against mobile voice messaging app Voxer. [Update: Facebook has also prevented Twitter's new Vine app from using its friend-finding feature.]

Here are the game developer stats Facebook shared in its latest post:

• In Ludia’s Are You Smarter Than a 5th Grader?, 52 percent of users connect with Facebook, but 70 percent of revenue comes from those users.

• Ludia also says 63 percent of daily players of Family Feud & Friends connect with Facebook. Retention of Facebook users is double the retention of those who sign in with guest mode. These Facebook users contribute 70 percent of total revenue.

• Buffalo Studios’ Bingo Blitz sees 55 percent of its iPad audience connecting with Facebook, and those users contributing 62 percent of total iPad revenue.

• Wooga says users who log into its Diamond Dash game using Facebook are nine times more likely to spend money than players who don’t connect with Facebook.

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This is a guest post by Alex Peiniger, CEO and cofounder of social media analytics web service quintly.

It’s been an exciting year for Facebook, from the introduction of its new ad formats, to its expansion into social gifting, to being the most watched IPO of the sector. The social networking giant now counts over 1 billion users on its platform, but the question remains — especially following its IPO and initial stock market performance — how does Facebook monetize its sizable consumer base? 2013 is the year Facebook grows up: brands are shifting toward deeper KPIs to measure fan engagement, while Facebook itself has either just launched or is set to release new features that will help advertisers make the most out of the platform.

Here are predictions for 2013 on what will matter to brands on Facebook in the coming year.

1. Facebook Metrics Will Shift To Interaction-Driven KPIs

Facebook metrics are growing up. In the past, size mattered — that is the size of your Facebook fan count. But what we’re seeing is more and more of our clients are shifting their focus away from superficial metrics like fan counts to more interaction driven KPIs such as People Talking About This, interaction rates and response times. As Facebook continuously improves the ways for page administrators to reach the right audience for their content, it’s far more important to reach fans via News Feed and to engage with them, than to simply count that someone Liked your brand. From discussions with our clients, we are also seeing these KPIs going into internal reporting with C-level management, who are demanding more from social media campaigns. We expect that 2013 will finally be the breakthrough year where we stop talking about fan numbers and brands really start dissecting metrics that delve into a fan’s interaction with a brand.
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After eight years focused on user growth and building the foundations of its platform — News Feed, location and Open Graph, among others — Facebook went into 2012 prepared to go public and become more serious about monetization.

The social network launched several new ad types and opened a number of other potential revenue streams. Here’s a look at Facebook’s monetization efforts last year and how they might evolve in 2013.

News Feed/Mobile Ads

News Feed ads, starting with Sponsored Stories, launched in January. These same ad types came to the mobile feed in March, and over time, the social network began allowing page post units and other non-social ads. Mobile app installs came to the feed in August. Facebook previously allowed feed-based ads in 2007 but it had never shown ads on mobile devices until this year. Now, the social network is earning $4 million a day from News Feed ads, with three-fourths of that from the mobile feed. Advertisers themselves are pleased to have more prominent inventory, which generally leads to higher clickthrough rates and lower costs per click. In 2013, Facebook is likely to put more ads in the feed and continue to tinker with their design to optimize performance and improve user experience. We’ve heard a new video ad unit is already in the works, and believe more interactive and immersive experiences could be on the horizon.

Facebook Exchange

Facebook introduced its Facebook Exchange, a real-time bidding system that allows third-party platforms to place retargeting ads on the social network after users visit external websites marked with cookies. FBX came out of beta in September, but only a limited number of partners have access to the exchange. Expect this number to grow in 2013. Early partners are reporting lower costs per acquisition than on other exchanges, and many advertisers are pleased that their ads appear above the fold and on brand-safe pages, which is not always the case with other exchanges where advertisers can’t be sure where their ads are being placed or how many others they’re competing against. The Facebook environment is much more controlled. Retargeting data cannot yet be combined with Facebook’s demographic and psychographic targeting options — nor can it be used for social ads like Sponsored Stories or page post ads in News Feed, but many expect these will become features of FBX in the future. TechCrunch recently reported that Facebook may be looking to bring FBX to mobile.
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Facebook today announced a small test that will allow some users to pay to send direct messages to another user’s inbox rather than their “other” folder. The social network is also releasing new filtering options for users to help users indicate who they want to see messages from.

Facebook has a two-folder messages system. Communications from friends and other close connections appear in the inbox, whereas messages from users who don’t have mutual friends or messages that originated as an email to a user’s @facebook.com account are likely to be sent to the “other” folder. For the most part, this reduces spam, but it also hides some messages that users would want to see.

Now in a limited test among a portion of U.S. users, a sender whose message would have appeared in the recipient’s “other” folder will be prompted with the option to pay $1 to have the message routed to the inbox instead. If the sender chooses not to pay, the message will still be sent but not to the main inbox. Messages sent to the “other” folder do not generate any notifications for the recipient, so they are not always viewed right away. This test is only for user-to-user communications. Companies cannot pay to send messages to consumers. There is also a limit so that users can only see one of these types of messages in their inbox per week, although the message will not be designated as paid in any way.
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Facebook is developing a new video ad unit that will autoplay within the mobile and desktop News Feed, according to a source familiar with the social network’s plans.

AdAge first reported about the new product, based on information from industry executives who were briefed by Facebook. Our own source confirms that Facebook has a feed-based video unit in the works and autoplay will be a key feature.

The new ad type could be a major draw for advertisers who have been asking for more prominent and immersive advertising opportunities on Facebook. Video is an especially attractive offering, but it could take some time for advertisers to determine what type of video works best in the Facebook feed as opposed to traditional display units, TV ads or even YouTube.

Advertisers can already pay to promote videos in the Facebook feed and sidebar by creating Page Post Ads and certain types of Sponsored Stories, but users have to click to play them. Facebook hasn’t done much to emphasize this video ad capability to the masses, and it really wasn’t until the second half of this year that advertisers began to take advantage of the unit. With the recent ability to place ads in the feed, videos are more prominent than before, which has encouraged some advertisers to try the format. See an example from McDonald’s Canada to the right.

Autoplay and other enhancements could make future video ad types even more effective, but maintaining a positive user experience is a delicate balance. AdAge reports that the company is still debating whether or not sound will be enabled automatically. The new video ads may also have a 15-second cap, which existing videos do not have. Relevance and frequency will also be key factors that affect how users feel about having the ads in their stream.

It’s unclear whether these ads will be limited to an audience that has already connected to a brand by Liking a page or knowing someone who has, but Facebook seems to be moving away from these requirements and allowing non-social ads to appear in the feed. The McDonald’s example, for instance, does not include any social context and was shown to a user who had not Liked the page. However, as we’ve pointed recently, Facebook’s mobile versions lack options for users to provide negative feedback about ads and opt-out of future messages from an advertiser. When the social network launches a new ad type, it should be sure to give users a way to report and hide videos they don’t like.

McDonald’s ad screenshot via Attention Industry.

Facebook today announced that nearly 200,000 iPhone and Android apps connect with Facebook and 45 percent of the top grossing iOS apps integrate the social network’s SDK, shining light on how the company’s mobile strength goes beyond its own apps.

At our Inside Social Apps conference in New York this week, there was a lot of discussion about which platforms to build on. For many developers, it’s still a common question about whether to build for Facebook or for mobile. Although Facebook does offer a vertical platform where apps can be used within the Facebook.com canvas, what’s often not discussed is how Facebook can be integrated horizontally across any other platform.

“We hear a lot, ‘Should I build a Facebook app or an iOS app, an Android app?’” Facebook’s Director of Platform Partnerships David Fisch said Monday during a fireside chat with Inside Network Managing Editor AJ Glasser. “Facebook is complementary to all of these. Since we’ve started, we’ve talked about how it’s a social layer. It started with web and now moved to mobile. Because there are so many different devices and you want to connect people across them, by definition, Facebook has to be part of all of them.”

An iOS app can be a Facebook app. A mobile website can be a Facebook app. A console game can be a Facebook app. Your car, your shoes, your credit card or your toothbrush can be Facebook apps.

The misperception that Facebook apps are limited to those on Facebook.com contributes to skepticism about the company’s longterm potential, especially on mobile. The market hears that users and developers are turning to “mobile games” over “Facebook games” and starts to count Facebook out. The reality is that nine of the 10 top grossing iOS apps connect with Facebook. The majority of the top Open Graph applications — those using Facebook’s latest sharing features — are open web and mobile integrations. In fact, six of the top 10 apps with the most monthly active users connecting with Facebook aren’t canvas apps. They range from websites to mobile apps to desktop software.

Facebook has been talking about being a “social layer” since 2008, and yet it’s still largely regarded as a single channel for developers. What does Facebook have to do to prove its horizontal platform is worth talking about for every mobile app, website or web-connected device?
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Facebook announced today that 14 percent of its total advertising revenue in Q3 came from mobile ads — less than 8 months since the company began its monetization efforts in the space.

According to earnings reports, Facebook generated $1.086 billion in advertising revenue in Q3, suggesting that about $152 million came from mobile. It’s worth noting that Q3 was the first full quarter that advertisers had the option to specifically purchase mobile inventory. Sponsored Stories began appearing in mobile feed in March, but advertisers couldn’t control their placements until June. CFO David Ebersman said on today’s earnings call that ads in News Feed are now generating about $4 million per day, with three-fourths of that from the mobile feed.

Mobile growth and opportunity was clearly the theme of the investor call today. CEO Mark Zuckerberg said that mobile is the “most misunderstood” aspect of Facebook’s business, iterating a point he made last month about mobile being “fundamentally good” for the social network. Zuckerberg noted that mobile users are more engaged on a daily basis than non-mobile users, and that its mobile ad products are and will continue to be more deeply integrated into the experience rather than off to the side as they are on desktop. He said that although it might have seemed that Facebook couldn’t monetize mobile earlier this year, that was because the company simply hadn’t tried yet.

In the past eight months, though, Facebook has introduced several opportunities for mobile revenue. On the ad side, there’s Sponsored Stories, page post ads, Promoted Posts and app install ads. These are all directly within the feed, and advertisers across the board are seeing higher clickthroughs and engagement with these units. COO Sheryl Sandberg noted that page post ads in News Feed (including desktop and mobile) are eight times more engaging than the same ads in the right hand column, and they have a 10 times greater ad recall per impression. This is in line with what we have heard from a number of Preferred Marketing Developers testing these ads.

App install ads benefit from being a “uniquely mobile” product, Sandberg says, though those ads are in very early stages. The product came out of beta last week. Another mobile-first advertising venture is the mobile ad network still being tested with select partners. These aren’t having an effect on Facebook’s earnings yet, but lay the groundwork in areas with a lot of potential for growth. Sandberg says that within eight months, Facebook has become one of the largest mobile ad platforms in the world.

Offers are another product with an opportunity to drive revenue on mobile. Since launch, about 100,000 pages have created an Offer and about 30 percent of Offer claims are coming from mobile devices, Sandberg says.

Separate from Facebook’s ad business, the company also announced Facebook Gifts just before the end of Q3. The product, which allows users to buy actual goods for their friends, was spun out of the social network’s acquisition of Karma and has a significant mobile component. It is still being rolled out in the U.S.

And although Facebook hasn’t made any moves to monetize Instagram, Zuckerberg said that the mobile photo-sharing app has gone from 27 million registered users since before the acquisition to more than 100 million today. There is more mobile time being spent on Instagram than on Twitter, he pointed out.

Facebook today announced that it will expand its test that allows users to pay to promote their personal posts at the top of friends’ feeds.

The test was first conducted in New Zealand in May and began to roll out to some users in 20 other countries last month. Today it will begin to appear for U.S. users with fewer than 5,000 friends and subscribers. Originally called “highlight,” Facebook is now calling this option “promote,” which is what it also calls an advertising feature for business and fan pages.

Users who are part of the test will see a promote button next to Like and comment on a user’s Facebook posts. After clicking “promote,” users will be taken through a payment flow. Over the past few months we’ve heard of prices ranging between free and $16. Facebook is likely testing a range of price points to understand demand.

Users who promote their posts will see some basic analytics on what percentage of people viewing their post saw it organically versus because of the paid promotion. Facebook says that promoting posts doesn’t change the audience that will see a post but it will appear higher in News Feed with a note that it is sponsored.

Promoted posts could be useful for letting friends know about garage sales, fundraising efforts or roommate searches, but Facebook also suggests using the feature for engagement announcements, wedding photos or other big news. This seems odd and reflects poorly on the social network’s algorithms that are meant to surface this type of content to the people it is most likely to matter to. For example, Facebook engineer Jocelyn Goldfein recently told Business Insider about the work she did to make sure that important news was shown to users even if they haven’t logged into Facebook in a while.

“We finally ended up dong some natural language processing and looking at the words,” Goldfein said. “Things like ‘thank you’ and ‘congratulations.’”

If that’s the case, it’s unclear why a user should pay to promote these types of posts. However, the feature is only a test and Facebook can monitor usage and sentiment to determine if it’s something worth pursuing. For example in 2009 the company tested a way for users to give give each other Credits for content they shared in the feed but it was never rolled out widely. The expansion of promoted posts to the U.S. suggests that tests in other countries went well.

Facebook Chief Operating Officer Sheryl Sandberg told CNBC today that the company is looking at opportunities to sell premium services for businesses.

“As we increase our investment in monetization, we’re thinking about premium services for business,” Sandberg said. “We’ve heard from businesses all over the world that they want more from us. There are things they’d pay for they really want us to provide. So it’s an area that we’re currently starting to explore.”

Sandberg didn’t offer any specific examples, though CNBC suggested “analytics or customer service” in its reports. Based on job listings posted to Facebook’s careers site over the past few months, we’ve suspected that the company could be making a play into providing CRM or data management solutions.

For example, in August, we saw Facebook put out a call for Product Marketing Manager, Monetization: “an expert in data management platforms” who will ”develop our plans and vision for how we can enable businesses to better reach their customers and prospects on Facebook.”

Data management platforms help advertisers organize their first party data (web analytics, CRM), second party data (from strategic partners that can match CRM records or cookies) and third party data (such as from Acxiom or Datalogix) to improve their advertising efforts. Facebook is uniquely positioned to enter this space considering the wealth of data it has in each of these areas. It has already gotten into the ad exchange market with FBX and has started matching CRM data with Custom Audiences. The company has also begun working with Datalogix to understand how Facebook ads impact offline sales.

Facebook might also be interested in offering its own CRM system. In March Facebook added a listing for a Software Engineer, Sales/Marketing Tools with the job description:

“The Sales/Marketing Tools team is inventing the future of Social CRM (Customer Relationship Management). We work closely with Product, Engineering, Sales, and Marketing teams to design and develop a suite of applications for large advertisers, media agencies, and Facebook’s global sales force.”

Another listing for a Front End Software Engineer, Sales Tools, added at the same time, includes a similar description and the question, “Are you intrigued with applying the concepts of newsfeed, social, and leader boards to business applications?” The listing also mentions “building enterprise applications using social and gamification techniques.”

Since July, Facebook has been looking for an Executive Briefing Center Manager to develop strategy and lead execution for the company’s new program to build relationships and win over new partners and advertisers. Executive briefing centers are areas for large companies to show off their technology and understand the business needs of potential customers or partners.

Sandberg wasn’t specific about the size of the opportunity for the premium services it is considering, but she said the company believes its potential in any area is “really big because of our sheer size and scale.”

Facebook continues to gauge interest in an option for users to pay to promote personal posts at the top of friends’ News Feeds, expanding on a test first discovered in May.

New reports of the feature appeared on Hacker News today, and The Next Web confirmed with Facebook that the social network is testing the feature among more users. Originally called “highlight,” Facebook now seems to be calling this option “promote,” which is what it also calls an advertising feature for business and fan pages.

Users who are part of the test will see a promote button next to Like and comment on a user’s Facebook posts. After clicking “promote,” users will be taken through a payment flow. Initially, prices ranged from free to US$2, though a user today says he was prompted to pay $6.30. Users can pay with PayPal, a credit card or money they have saved from paying for virtual goods. The promoted post will appear at the top of friends’ News Feeds with an indication that the user paid to place it there.

People who have chosen to enable subscribers might be interested in the feature since they have a wider audience than most users. There may be other cases when a user would be willing to pay a few dollars to make sure that friends see a post, for example, a birth announcement, a post about looking for a roommate or a link for fundraising.

Still, we’re surprised to see the company expand this test because it seems to go against the idea that Facebook is free for users. The social network has previously struggled with rumors that it would charge for its service, despite a note on its homepage that says, “It’s free and always will be.” Asking users to pay for friends to see their posts seems likely to fuel further speculation and hostility from some people. It also might lead users to question what happens to their posts they don’t pay to promote. It does not reflect well on Facebook’ algorithms if users have to pay to get their most important posts seen by friends. It’s understandable to have businesses pay to reach consumers, but seems distasteful to do to users who want to share things with people they know.