Inside Facebook

The Facebook Platform payments and monetization ecosystem continues to grow rapidly this year, and recently, Facebook has been getting more involved. A few weeks ago, Facebook started testing integration of its own virtual currency with Platform applications, and last week Facebook enabled payment support in 14 new currencies.

Now, we’ve learned that Facebook recently hired Prashant Fuloria, formerly a Director of Product Management at Google where he worked on Google Checkout amongst various other projects during his six year stint, as the new Director of Product Management responsible for Facebook payments. Highly regarded by colleagues, Fuloria left Google and started at Facebook last month.

With Fuloria’s hiring, the march of former Googlers two exits up the 101 to Facebook continues. At one point, nearly 10% of Facebook employees came from Google. Just a couple of weeks ago, Greg Badros, who headed up the AdSense engineering team for several years at Google, joined Facebook as a Director of Engineering.

Fuloria has his work cut out for him as he oversees the development, testing, and wider launch of Facebook payments services over the next several months. While Facebook only accepts credit card payments today, it is likely to expand its payments tests in the future, as the company seeks to monetize users across geographies and demographic profiles. Managing the integration of payments methods and systems into the Facebook experience is an increasingly important challenge for the company as it seeks to create a new, substantial direct-to-consumer revenue stream in a market that is known for its high operational costs, major fraud challenges, and international complexity.

Several companies have already launched major efforts to help developers accept payments from Facebook users - including mobile payment providers Zong and Boku, integrated credit card payment enabler Social Gold, and a variety of others - not to mention Paypal, Amazon, and Google Checkout. Even large developers like Slide are now building their own payment platforms. The Facebook Platform payments ecosystem has gotten crowded in the two years since the Platform launched - a good sign of its overall health.

Facebook opted for Platform growth over monetization in 2008, but it appears to be increasingly focused on building out its payment platform in 2009. We’ll let you know as Facebook’s monetization efforts continue to develop - though we somehow doubt they’ll include Google Checkout any time soon.

Purchase this report The Facebook Marketing Bible - Current Edition Buy PDF: $49 USD OR Buy PDF + 1 Year of Free Monthly Updates: $149 USD

The newly revised, expanded, and hot-off-the-press Facebook Marketing Bible: 40+ Ways to Market Your Brand, Company, Product, or Service Inside Facebook - July 2009 Edition is now available!

The Facebook Marketing Bible has been purchased by thousands of agencies, marketers, social application developers, entrepreneurs, and educators, and is the leading resource on Facebook marketing today. It is also available in French, Spanish, and Italian. (A special edition for agencies and big brands is also available.)

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

In addition, Inside Facebook is happy to announce that through July 31st all customers who purchase the Facebook Marketing Bible will also receive a free $25 Facebook Ads advertising credit, courtesy of Facebook (see terms).

The July 2009 edition includes updates on the following topics:

• The latest updates on Facebook Pages (public profiles), including the vanity URL landrush and rule changes for generic Facebook Pages. We’ve broken down all the new elements piece by piece and offered detailed and specific advice for marketers hoping to reach more users inside Facebook than ever before - including details on why marketers should choose Facebook Pages over Facebook Groups, new updates to Facebook’s new Insights dashboard, and new rules for administrators of generic Facebook Pages. See the table of contents below for more details.
• The latest details on Facebook’s new “Pay with Facebook” virtual currency payment program for application developers. Find out the latest on what Facebook’s new payment program means for the future of virtual currency payments on Facebook (and Facebook revenues) - including Facebook’s latest international currency efforts.
• The latest details on Facebook’s new “Open Stream” API and what it means for marketers, publishers, and developers. With the new Open Stream API, Facebook has released the power of the Facebook stream to live anywhere developers can put it - including publisher websites, desktop applications, and mobile phones. Find out exactly what you can do with the new Open Stream, and what it means for the future of the Facebook Platform.
• The latest tools for webmasters to drive more traffic to their site and build more social context through Facebook Connect and Facebook Share. With Facebook Connect and Facebook Share, publishers have new opportunities for both enriching their sites with deeply social features and leveraging Facebook’s powerful feed system for driving traffic to their site. Get new details on metrics early Facebook Connect partners are seeing, and learn how to optimize your Facebook Share integration.
• New tools for advertisers to target their Facebook Ads better than ever before. With enhanced Facebook  targeting tools, advertisers now have the ability to reach their target audiences in much more powerful ways. Learn how to use these new tools to get the most out of your performance marketing dollars. Plus, check out ways Facebook is experimenting with virtual currency gifting and branded virtual gifts.
• Plus, more updates on Facebook’s “Live Stream” widget for live events on your website or Facebook Page, recent rule changes for Facebook Platform ad networks, and more.

Purchase this report The Facebook Marketing Bible - Current Edition Buy PDF: $49 USD OR Buy PDF + 1 Year of Free Monthly Updates: $149 USD

For those interested in learning more, click the purchase link above. The price is $49, or $149 with 12 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. Pages / Public Profiles

• “Facebook Pages 2.0″
  • The New Wall Tab - Making Pages More Dynamic and Viral
  • Status Updates - Now for Pages, Too
  • Application Boxes - Changing Places
  • Tab Management - Choosing a Landing Page
  • Conclusion - Facebook Learning from Twitter, Pages Getting Better
• The Future of Sharing on Facebook: A Hybrid Public/Private Model
• Branded Virtual Gifts on Facebook Pages Opening New Doors for Viral Advertising
  
• Adding Custom Modules to Your Page
• Strategy: 4 Reasons Why Marketers Should Choose Facebook Pages Over Facebook Groups
• 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
• Vanity URLs for Facebook Pages
• Which Celebrities are the Most Engaging on Facebook?
  
• Ways Page Owners Can Restrict Content for Underage Users
• How to Import Your Blog into Your Public Profile
• Page Invitations
• SMS Subscription Service for Pages
• Updating Facebook Page Status Via Text
• Getting Page Status Updates Via Text
  
• More Features Coming Soon
• Interesting Conversion Rate Metrics from Adobe Students Facebook Campaign
• Marketers Actively Bidding for Generic Facebook Pages
• Facebook Upgrades “Insights” Metrics Dashboard for Page Managers
• Facebook Disabling Stream Publishing for Generic Pages

3. Groups

• Strategy: What about spamming existing groups?
• SEO
  

4. Events

• Events API
• Events SEO
  

5. Notes and Photos

• Events API
• Events SEO
  

6. Messages

7. Status Updates

• Public Timeline Search

8. Share / Posted Items

9. Mini Feed and News Feed

10. Feed Importing

> Data: Latest US Facebook Age and Gender Demographics

> Recommended Strategies for Guerilla Marketers

II. Tools for Advertisers

11. Social Ads

• How Specialty Brands are Driving Sales on Facebook
  

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
     • Polling 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
• Scheduled & Holiday Virtual Gifts
• Facebook Testing Virtual Currency Gifting Program with Branded Virtual Gifts
  

14. Performance Ads

• Radius and Language Targeting
• Multiple Currency Support

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
• Facebook Bans Platform Ad Networks for Deceptive Ads

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. Specialized Facebook Platform Advertising Service Providers

> 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
• Policy Update: All Feed Story Calls to Action Must Now be 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. Chat Invitations

28. Facebook Notifications

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

29. Email Notifications

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

30. Application Bookmarks

31. Application Directory & About Pages

• The Publisher Comes to Application About Pages
  

32. Status Updates & Donations

33. Demographic Restrictions

34. Verification and Certification

• Great Apps Program
• Application Verification

35. Translations

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

Purchase this report The Facebook Marketing Bible - Current Edition Buy PDF: $49 USD OR Buy PDF + 1 Year of Free Monthly Updates: $149 USD

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

40. Custom Tags

41. Open Stream

• What Does Facebook’s “Open Stream” Mean for Marketers?
  

42. Pay with Facebook

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

> Recommended Strategies for Application Developers

IV. Tools for Webmasters

43. 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
• Citysearch: Each Item Shared Through Facebook Connect Generates 30 Clicks
  

44. Comments Box Widget

45. Live Feed Widget

46. Facebook Share

Conclusion

Recommended Partners

Check out the top headlines and insights this week from Inside Social Games - tracking all the latest developments at the intersection of games and social platforms.

Monday, June 22

• Zynga Sues Playdom Over Mobsters Ads
• Bringing Wholesome Social Games to Facebook and MySpace: Q&A With WonderHill CEO James Currier
• iPhone OS 3.0 Brings New Legal Terms on Microtransactions, Age Rating for Apps

Tuesday, June 23

• Expert Metrics for Social Games by Siqi Chen and David King - Slides from #SGS09
• Live Notes from #SGS09 - Building Social Games at Scale
• Slides from Presentation at Social Gaming Summit

Wednesday, June 24

• iPhone App Ad Manager AdWhirl Closes $1 Million Seed Round
• Pincus: iPhone Not Easy to Monetize, Needs Better Facebook Connect Support
• Virtual Currency Monetization Comes to Twitter with 140 Mafia and Super Rewards

Thursday, June 25

• Hive7 Partners with Susan G. Komen in New Facebook Game Zen Garden
• Are You Making Your Social Games Wide or Deep?

Friday, June 26

• Ex-Facebooker Net Jacobsson Joins OpenFeint Advisory Board

Founded by PayPal co-founder Max Levchin in 2005, Slide has become synonymous with the explosion of social network applications in recent years. Its properties and widgets, including popular applications SuperPoke, Top Friends, FunSpace, and SuperPoke Pets, reach over 155 million people per month on popular social networks like Facebook, MySpace, Bebo, Hi5, Orkut, Friendster, and Tagged. And with around 24 million monthly active users on Facebook, Slide is (and always has been) one of the largest application developers on the Facebook Platform.

However, unlike other top app developers, Slide hasn’t been rolling out many new applications over the last year. Instead, it’s been honing and optimizing its core network of properties, and spending a lot of time and energy tuning its monetization efforts.

On the advertising side, Slide has built a sales team with several staff in New York and San Francisco that has been driving the company’s premium integrations like branded SuperPokes or viral FunSpace videos. However, the company has also quietly been building its direct to consumer business, selling virtual currency and subscriptions that give users access to premium features. For example, each bar of Slide Gold costs USD $0.10 (the same exchange rate as Facebook Credits), and unlimited premium SuperPokes can be purchased for a USD $4.99 monthly subscription fee.

Just how important has Slide’s virtual goods business become? As of today, a Slide spokesperson tells us its direct-to-consumer virtual currency sales and subscriptions account for 50% of the company’s overall revenues.

Furthermore, given the increasing importance of virtual goods sales to the company - and that Levchin, CFO Kevin Freedman, and VP Strategy and Business Development Keith Rabois all share a history at PayPal - we’ve been hearing increasing rumors lately that Slide has plans to bring more parts of the payments layer in house in order to be able to exert greater control over the payment user experience. Today, Slide confirms that that is indeed the case.

“We believe it’s important to improve the system for paying for virtual goods. We are working on innovating that technology to make the experience easier for our consumers,” Lily Lin, Slide’s Director of Communications, tells Inside Facebook.

Whether or not Slide will make its payment infrastructure available to other developers remains to be seen. Slide’s Lin, however, says that that is “not the plan.”

“The focus is just for our own users,” she says.

For a company like Slide, which has 150 million users around the world yet connects with many of them through social network platform partners, taking greater control over the payments infrastructure, which is of increasing strategic importance to the company as it grows its direct to consumer sales, makes a lot of sense. Unlike smaller developers, it has the resources and experience to potentially establish direct relationships with payment processing companies instead of working with social application payment service providers like Social Gold, Spare Change, Zong, or Boku - or the social networks themselves. (Facebook recently started testing a payments program for developers, and MySpace has said it plans to do the same later this year.)

Overall, we think these are all smart moves by the company. Virtual goods sales are booming on the Facebook Platform, and Slide is in a unique position to capitalize on both the advertising and e-commerce opportunities inside Facebook. We’ll continue to track the company as things progress on both fronts throughout the year.

Although Facebook has tens of thousands of advertisers using its self-serve Facebook Ads system and millions of users buying Facebook Credits to spend on Facebook Gifts and (recently) Platform applications, it has always required all advertisers and Credits buyers around the world to pay in US dollars. As a result, customers abroad have had to deal with exchange rates, and advertisers have had to manage budgeting campaigns in a different currency.

Today, however, Facebook has rolled out the ability to pay for Facebook Ads and Facebook Credits in 14 new currencies. Now, when you want to create an ad using Facebook’s online advertising system, buy a Facebook gift, or purchase a premium item in a Platform application participating in the payments alpha test like Group Card, you have the added option of paying in the following currencies:

1. Australian Dollars (AUD)
2. British Pound (GBP)
3. Canadian Dollars (CAD)
4. Chilean Peso (CLP)
5. Colombian Peso (COP)
6. Euro (EUR)
7. Danish Krone (DKK)
8. Hong Kong Dollar (HKD)
9. Japanese Yen (JPY)
10. Norwegian Krone (NOK)
11. Swedish Krona (SEK)
12. Swiss Fanc (CHF)
13. Turkish Lira (TRY)
14. Venezuelan Bolivar (VEF)

For example, here’s what buying Facebook Credits in Chilean Pesos looks like. (The exchange rate is 54 Chilean Pesos to the Credit for those keeping track at home.)

What This Means for Advertisers

Growing and scaling its advertising solutions internationally is a key focus for Facebook, and the addition of 14 newly accepted currencies is a step in that direction, making the ad creation process as simple as possible for advertisers in many more locations around the world. Facebook will not be charging additional fees for the currency transactions involved, so advertisers in many new countries should be able to plan their Facebook campaigns more seamlessly.

What This Means for Developers

Facebook is currently testing a Facebook credits payments program for Facebook Platform developers in a few applications in an effort to create an additional low-friction payment option. So far, many developers monetizing their applications through payments have expressed interest in testing the system out, though only a few are actually live now. Given that over 70% of Facebook users live outside the US, the addition of new currency support should make Credits an increasingly viable option for users in those countries.

However, whether or not Facebook will be able to drive significant currency purchases in those countries remains to be seen - currently, the only way to actually purchase Facebook Credits is still with a credit card. Mobile payment companies like Zong and Boku have been aggressively working with Facebook application developers to help them access users in many international markets which are otherwise more challenging to monetize, so it will be interesting to see if Facebook’s new currency support has a significant impact.

Conclusion

Facebook has not yet broken out advertising volume or Credit sales by country. However, we expect Facebook to continue to expand its international payments infrastructure in order to be able to support an increasingly global base of advertisers and direct customers. With over 70% of users currently outside the US and growing, Facebook is giving advertisers and developers access to markets that would otherwise be much more challenging to reach.

Jessica Lee contributed to this story.

This morning I gave the opening presentation at the Social Gaming Summit, discussing an overview of the major platforms, players, and monetization stats in the social gaming industry. For those interested in checking out the slides, they are embedded below.

Topics covered: Facebook, Facebook Connect, iPhone, MySpace, Hi5, Twitter, Monetization, ARPUs on Facebook and MySpace, IP, copycats.

Thanks to everyone who attended this morning’s Facebook Marketing Breakfast in San Francisco! It was great getting to meet many of you and to see several familiar faces.

The Facebook Marketing Breakfast is Inside Facebook’s half-day event series geared toward bringing together leading brands, Facebook’s own brand market solutions team, and experts from the space for an intimate conversation on best practices and realities of the Facebook marketing landscape.

Today’s event, hosted by Razorfish, included presentations by Trista Handisides, Manager of Brand Market Solutions at Facebook, Jeremiah Owyang, Senior Analyst: Social Computing, Forrester, Michael Brito, Social Media Strategist, Intel, Kevin Barenblat, CEO, Context Optional, and Garrick Schmitt, Group Vice President of Experience Planning at Razorfish.

After the presentations, we concluded with a panel discussion including Betsy Burkett, Senior Manager of Digital Media at Mattel, Karl Long, Social Media Strategist at Nokia, Alyson Hyder, VP Digital Media, Razorfish, Keith Rabois, VP Strategy & Business Development, Slide, Katherine Bateman, VP Marketing, Buddy Media, and Justin Smith, Editor, Inside Facebook, followed by drinks on the Razorfish patio.

Below, check out some photos from this morning’s talks and great San Francisco weather (or view photos on Facebook). Video and presentations from this morning are also coming soon. You can also find tweets from the event at #fmbsf (thanks to @coryobrien for live tweeting many highlights from this morning). We look forward to seeing you at our next event!

Facebook Marketing Breakfast San Francisco - June 18, 2009

Garrick Schmitt, Group Vice President, Razorfish

Trista Handisides, Manager of Brand Market Solutions, Facebook

Kevin Barenblat, CEO, Context Optional

Jeremiah Owyang, Senior Analyst: Social Computing, Forrester

Justin Smith, Editor, Inside Facebook
Keith Rabois, VP Business Development & Strategy, Slide
Jeremiah Owyang, Senior Analyst: Social Computing, Forrester
Karl Long, Social Media Strategist, Nokia
Betsy Burkett, Senior Manager, Digital Media, Mattel
Alyson Hyder, VP Digital Media, Razorfish
Katherine Bateman, VP Marketing, Buddy Media

As we continue our in depth look at leaders the Facebook Platform monetization ecosystem, today we turn our attention to Offerpal Media, one of the largest players in the space. After raising $15 million earlier this year from D. E. Shaw Ventures, InterWest Partners, and North Bridge Venture Partners, the company has been expanding its efforts to help developers monetize their social apps and games through the company’s offer network and virtual currency platform.

Offerpal works with many Facebook app developers, and is led by Anu Shukla, Founder and CEO, Mitch Liu, Co-founder and Vice President, Naghi Prasad, VP Engineering and Operations, and Bill Lonergan, CFO. We recently spoke with Shukla about recent developments in the Facebook payments space and the company’s approach to monetization.

Inside Facebook: Anu, what is Offerpal’s role in the virtual economy?

Anu Shukla: Offerpal is a monetization platform for applications and websites with virtual currencies, digital goods, or subscription-based services. We launched in October of 2007 and entered the space because we initially built an app for Facebook and MySpace and integrated virtual currency, but then focused on building out a monetization platform.

How would you compare user behavior between social networks and standalone sites?

We focus half of our efforts on social networking based apps and half on standalone games and websites. On social networks, we’ve seen a big influx of new users - whereas on standalone sites, it’s the same user base again and again. On social networks, new apps are being launched all the time, and the old ones die. Apps grow virally, but users also lose interest faster.

What trends are you seeing around users and their payment method choices?

It depends on what type of app you’re dealing with, whether users are younger or older, female or male, and how much time they have on their hands. Users who don’t have much time tend to use cash payment methods. In Europe, mobile payments are more popular. Incentivized offers are used less, proportionally speaking. For example, 30 percent of revenue may come from cash payments, and 70 percent from other payment methods, such as offers – but this breakdown changes depending on the population at hand.

As an optimization platform, how does Offerpal optimize the experience for the different players you work with?

We have 3,000 offers in our system and add 100 new ones every day. We optimize our offers based on individual preferences and target the exact type of user, which optimizes revenue for our publishers. The publisher wants to maximize earnings and provide a good customer experience; the consumer wants to do something that s/he is interested in. We have a scalable rule-based optimization engine that’s based on the inclusion/exclusion of particular audiences, proprietary algorithms, and collaborative filtering at the individual consumer level.

From our perspective, all relationships are really important and make our business model work. The advertiser pays; consumers buy; and publishers attract consumers. The right match between the three ensures that the advertiser is seeing quality results, the publisher is maximizing revenue, and the consumer is finding offers relevant. We work extensively with advertisers, as well as publishers who can then turn their attention to the games themselves while we focus on monetization efforts and customer service.

And, what about your transaction model?

When a user completes a transaction, the advertiser pays us, and we share that amount with the publisher. Revenue share is negotiated on a case-by-case basis.

How is your partnership with IMVU going?

IMVU is a premier avatar-based site, and its tight integration with Offerpal has been quite successful. IMVU is one of our premier clients, and we hope to continue the partnership for many years to come. IMVU has done a great integration, as well as Real World and Mobsters. We have a team in house that helps publishers find the right integration.

The virtual economy in international markets in Asia, for example, is exploding. Are we seeing signs in the U.S. in that direction?

Yes, we’re seeing all the signs of that. Social networks are rushing to add virtual currency; and games and virtual worlds are being developed/created to generate income/revenue from virtual currencies. Virtual currency is here to stay.

Now that Facebook has launched its alpha “Pay with Facebook” test, what’s your reaction?

I think it’s going to open up the number of people who will participate in transactions. The net effect will be that more people are willing to buy virtual goods, subscription services, and digital goods on Facebook because they are familiar with the brand. This will add more people to the mix. The user base will expand, which is great for publishers and for us.

How is Offerpal doing financially?

Financially, we’re bucking the trends, which is not surprising. In a recession, the industry that expands the most is entertainment, and we’re seeing the effects of that. Combined with the fact that engagement on and growth of social networks are both increasing, we’re riding on these positive trends, and are on an upswing.

Can you share any statistics with us on the percentage breakdown of your revenues across certain regions?

Sure - here is what we’re seeing:

70% North America
17% Europe
7% Asia
2% Middle East
2% South America
1% Africa1% Central America

Thanks Anu! Do you have any last comments you’d like to share with our readers?

There’s no reason why micro-transactions won’t be as pervasive as evidenced in Korea and China. China’s Tencent QQ almost got regulated by the Bank of China because its virtual currency was so liquid!  And also, we’ve seen the positive benefits of businesses that are initiating loyalty points programs such as frequent flier miles. Virtual currency is the equivalent of that for gaming and social networking worlds.

As we continue our in depth look at leaders the Facebook Platform payments ecosystem, today we turn our attention to Super Rewards, a virtual currency monetization platform for social apps and games. We did one of the first public profiles of the company last summer, when word was first getting out about Mob Wars revenues.

Most recently, the company announced the hiring of Julie Craft as VP of Marketing, who joins CEO Jason Bailey and President Adam Caplan on the Super Rewards exectuive team. Craft has recently worked as Vice President of Advertising and Publisher Sales at Simply Hired, followed by a business development role at rival monetization firm Offerpal Media.

We recently spoke with Bailey about the current state of the market and trends the company is seeing heading into the second half of 2009:

Inside Facebook: Jason, thanks for your time. Can you briefly describe the Super Rewards solution?

Jason Bailey: Super Rewards has been around since December 2007 and is a virtual currency monetization platform. We’re a simple cut-and-paste solution that allows game services to monetize their virtual currencies through a series of payment options via PayPal, credit card, cash, direct deposit, prepaid gamer cards, etc. At our core is an ad-based solution. We work with 3,000 different advertisers that give us money, for example, when users sign up for a service. This money then gets passed on to game publishers.

What’s the most important interaction in your value chain?

The interaction between end users and advertisers: If users want to sign up for Netflix, it’s important for them to find value in offers, so we work with advertisers to push high quality ads out. This increases the likelihood that users will return in the future. Advertisers want more users. A user who signs up for Netflix and unsubscribes doesn’t generate a lot of value to advertisers. In the middle are Super Rewards and game publishers. We facilitate the interaction between advertisers and developers. We make life easier for developers.

What are trends are you seeing so far this year, and what do you see ahead for the space over the next year or two?

Mobile payments are becoming more popular and commonly accepted. As carriers are providing services and costs are coming down, there will be more competition in the space. PayPal and credit card payments make up the largest portion of direct payments. In international markets, most people don’t have credit cards, so there are direct deposit options that take funds directly out of bank accounts. This hasn’t caught on in North America yet.

Overall, the space will continue to grow, and we’ll see a couple of major things happen: First, the bar will rise. The quality of games and applications has been getting higher and will continue to do so. The days of small developers who create apps in dorm rooms are kind of gone, but not completely. Second, we’ll see an aggregation in the space as far as who the key players are.

As we’ve all seen, Facebook’s payment service is now live in a few applications. What are your thoughts on Facebook’s payment system?

I really think it’s just another payment solution. I’m not too concerned about it and don’t think it’s Facebook’s gift to the world in terms of microtransactions. Facebook is late to game and not necessarily providing anything of additional value that can’t be gotten anywhere else. Social Gold and Spare Change have been offering the same solution for a long time. That said, there’s definitely the trust factor with Facebook.

It remains to see what margins Facebook will take. I’d say Facebook will capture a relatively small amount of third-party app revenue for 2009 unless it runs margins so slim that there’s no value for other companies or makes it so that everyone has to use Facebook’s payment method like Apple’s platform. With the former, the company would be at fraud risk; with the latter, there would literally be a riot.

Moving on to stats - how are your revenues currently breaking down across platform and geographies?

80% of our revenue comes from the four major English speaking countries. US, UK, Canada, and Australia.

Facebook and MySpace are fairly even in terms of total revenue. But MySpace does it on fewer users. This is because it is more heavily skewed to US users, whereas Facebook is more more international, but has more people playing more apps.

How do your ARPUs break down across countries?

ARPUs vary greatly. The top four being the best. However, often heavily overlooked are Norway, Spain, Greece, Denmark, Switzerland, Saudi Arabia, and Italy.

Turkey, Indonesia, Mexico, Malaysia, and Brazil should be avoided as their revenue is low on a per user basis. There are plenty of users, but the ARPU is low.

What are common mistakes developers make when it comes to setting conversion rates?

They are either giving away too many points or too little. In the first case, say the conversion rate is $10 dollars for 10 million coins: users have so many points that there’s no need to buy again. In the second case, say the conversion rate is too low - $10 dollars for five points: users would much rather go to other places in the game where they can click and earn.

How’s the acquisition of Frozen Bear going for Super Rewards?

Back in December we acquired Frozen Bear, a small company with only a few people mainly for its talent. The team at Frozen Bear has done a tremendous amount of work to bring Super Rewards to the next level with a robust, scalable product.

Thanks Jason. Finally, what unique value does Super Rewards bring to the monetization space?

The smaller players in the payment industry try to have you believe that offer inventory is the same, but I assure you there are offers in our platform that you absolutely will not find elsewhere. We work with a whole lot more networks than most of our competitors because of preexisting relationships with performance marketing companies. And it’s not just about the offers or volume, but which offers you present to users and which times. We serve 100 million unique eyeballs a month, and this breadth of demographic data allows us to see a new user, make an assumption, and present the right offer at the right time. As a result, we are the largest revenue generator for many advertisers and get slightly higher rates on most offers.

Boku, a mobile payments startup that has been operating in stealth mode for the past four months, is making two major announcements this morning: It has raised $13 million from venture capital firms Benchmark Capital, Index Ventures, and Khosla Ventures, and has acquired Mobillcash and Paymo, two of the leading global mobile payments companies.

This is big news in the mobile payments space. Through its acquisitions of Mobillcash and Paymo - two companies active in monetizing Facebook applications and social games - Boku instantly becomes one of the largest players in the space, with 170 carriers on board at launch across 53 countries reaching a potential 1.6 billion customers.

With Boku’s new global mobile payments service, consumers can purchase virtual goods and virtual currency via their mobile phones. Here’s a demo of how the service looks and works:

Based in San Francisco and with offices in Europe, Asia, and Latin America, the company is being led by CEO Mark Britto, who brings 20 years of experience at Amazon, Ingenio, and FirstUSA, and a management team that includes VP of General Counsel Javier Martell, VP of Engineering Erich Ringewald, VP of Business Development Kurt Davis, Senior Director of Risk Management Martine Niejadlik, VP of Product & Marketing Ron Hirson, and General Manger James Patmore, who together come from companies like AT&T Interactive, PayPal, Apple, FICO, Google, O2, Bank of America, and eBay.

Paying via Boku will be available on partner gaming site Puzzle Pirates, as well as other merchants:

We spent some time talking with VP of Product & Marketing Ron Hirson about the future of the mobile payments space, and he walked us through some notable statistics. Hirson says the future of online payments via mobile is being driven by 1) worldwide growth of social networks, virtual goods and games, 2) the popularity of mobile apps, and 3) the large number of unbanked consumers who have mobile phones but not credit cards or bank accounts. The holy grail for mobile payments, according to Hirson? Global coverage.

Other leading companies in the space, including Zong, Daopay, and Netsize, are also racing to establish presence in the largest markets around the world. Zong, who we spoke with in depth recently, says it is focused on building direct relationships with all major carriers in developed markets first and foremost, before moving into developing markets where mobile payment companies often work with many aggregators.

Related Stories:

• Payment Industry Perspectives: Q&A with Paymo CEO Paul McGuire
• Payment Industry Perspectives: Q&A with Zong CEO David Marcus