monetizing social media

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Bling Bling: Marketing and Monetizing Through Social Applications August 2008

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Page 1: Monetizing Social Media

Bling Bling: Marketing and Monetizing Through Social Applications August 2008

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Common Perceptions of Social Media

“You can’t make material money through social media”

“You can’t effectively promote yourself on social media”

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Social Media Social Media Ad NetworkAd Network

Social Gaming Social Gaming ProviderProvider

• Leading ad network for social media (FB, MySpace)

• 9B+ impressions per month

• 90M monthly unique visitors global

• Largest social application provider on the web (FB, MySpace, Hi5, Bebo, Orkut)

• 1.5B+ PVs per month

• 60M+ monthly unique visitors global

• Leading social games (pets, autos, poke)

• 700M PVs per month

What is RockYou?

Our mission is to engage the world with social applications

RockYou has massive reach and scale, 6x larger than its next largest competitor, and the opportunity for growth is only beginning.

Social Social ApplicationsApplications

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A Dominant Facebook Presence and Growing

Super Wall 38M 18.6M

Hug Me 22M 4.0M

Likeness 20M 5.2M

Pieces of Flair 13M 4.3M

Birthday Cards 7M 3.3M

Horoscopes 7M 0.3M

Likeness Unrated 5M 1.0M

Speed Racing 5M 1.2M

PetrolHead 4M 0.3M

Total Facebook Users

Application Monthly Active Users

RockYou has over a dozen applications with over 1 million users – below are some of the largest:

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Social Media Introduction

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Examples of Social Media

Multimedia– Photo-sharing: Flickr– Video-sharing: YouTube– Audio-sharing: imeem

Entertainment– Virtual Worlds: Second Life– Online Gaming: World of Warcraft

News/Opinion– Social news: Digg, Reddit– Reviews: Yelp, epinions

Communication– Microblogs: Twitter, Pownce– Events: Evite– Social Networking Services: Facebook,

LinkedIn, MySpace

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Who Are The Major Players? More To Come…

Social Networking Websites:– MySpace– Facebook– Hi5– Orkut– Bebo– Friendster– LinkedIn

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Le Distribution Géographique

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How Much Has The Market Been Tapped?

Explosive growth…

…But still a long way to go

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What Are Social Networks Used For?

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Monetization Opportunities with Social Applications

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Online Advertising Growing

$27

$36

$45

$52

$61

2006 2007 2008 2009 2010

Source: eMarketer

CAGR: 22%

Global Online Media Advertising($Bn)

$480

$1,225

$2,145

$2,883

$3,559

2006 2007 2008 2009 2010

Global Social Networking Advertising($MM)

CAGR: 65%

Social Advertising Growing 3x Faster

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Context is the key to social media monetization

Virality /Hyper-targeting

Contextual targeting

High contextLow virality

Search is not viral

Lower context High virality

Low context from photo browsing

High contextHigh virality

Apps add context to social networks.

Social apps are viralSocial Applications

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Monetizing Social Media

Application Cross-promotion– CPI (Cost per Installation), CPC = $0.30-$0.50 – Select Customers:

Agency-sourced Branded Advertising– CPM (Cost per Impression) = $2.00 - $10.00– Type of Ads Using CPM: Branded Ads, Takeovers, App Integration– Select Customers:

Direct Response and Lead Generation– CPA (Cost per Action)– Type of Ads Using CPA: Mobile Offering, Education, Finance– Select Customers:

Virtual Goods, Micro-transactions & Subscription

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Application Cross-Promotion

Publishers place ad units to standard formats. Advertisers pay on a CPI, CPC or CPM (cost per install) basis. New FB profile helps on IAB standards.

646x60 => 728x90 300x250

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Application Cross-Promotion

3rd party ad networks on Facebook, MySpace serve as the foundation of both promotion and revenue generation for most social applications

– RockYou– Socialmedia– Lookery

Revenue from ad networks ranges from $0.10 - $1.50 eCPM

RockYou’s app pages range from $0.40 to $1.50 eCPM

Largest individual publishers on RockYou network generate $20K to $100K a month

Actively optimizing ad network ad inventory can multiply revenue – RockYou.com eCPM increased from $0.20 to $0.85 in 3 months

Services like Rubicon Project and Pubmatic can automate ad network inventory optimization

– Pubmatic generating $0.50 eCPMs for one RockYou app

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Agency-Sourced Branded Advertising

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Agency-Sourced Branded Advertising

Direct selling is required - limiting scope of potential advertising partners – Facebook, MySpace, Linkedin– RockYou, Slide, Zynga, SGN

Many other developers work with ad rep companies to help source agency relationships

– Alloy Media & Marketing– Clearspring– Appsavvy

Agencies are looking for new, materially impactful experiences for their clients (same as the regular web)

– Application takeovers– Niche demographic reach or custom content– Performance

Productize the offerings of your application/site

Agency-sourced campaigns range from $30K to $150K spend

International brand marketing can be significant

Internal resources are needed to support agency work– Ad operations & reporting

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Lead Generation, Direct Response

Lead generation, DR and performance marketing currently makes up a significant volume of advertising on social media

Leverage affiliate network providers at first (best offers w/ best payouts)– Affinity Labs– MyOfferPal– Neverblue Ads

Vet opportunities based on demographic mix of the application/site – increased context

Successful lead gen/direct response campaigns on social media include:– Mobile offers (SendMe, Thumbplay)– Dating (True, eHarmony, Match, SinglesNet)– Education (UPheonix)

Given unlimited funding for lead gen, effective way to fill remnant inventory at higher CPMs

Be prepared to process multiple lead gen offers to maximize performance – 10s to 100s

Lead generation campaigns may burn through quickly; active management and tracking is required

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Virtual Currency

Fastest growing segment of social media monetization

New services allow transactions for youth demographic (13-21)

Virtual currency monetization providers are key

– OfferPal Media (alternative payments)– SuperRewards (alternative payments)– SpareChange (microtransactions)– Echovox, Mobillcash (mobile)

For a high volume app (1M uniques+ a month), revenue generated ranges from $100K - $1M per month

10M usersMobsters

8M usersOwn Your Friends!

8M usersMafia Wars

3M usersSuperPets

3M usersTexas Holdem

2M usersHeroes

Top MySpace Game Apps (after 2-3 months live)

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Successful Marketing on Social Media: Social Applications

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Wikipedia.org

Alexa Global Traffic Rankings

Why? Potential for Social Apps is Exploding

2008

1

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4

5

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9

10

1

2

3

4

5

6

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9

10

2005

(U.K.)

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0

10

20

30

40

50

1 3 5 7 9 11 13 15 17 19 21 23

Months (1)

Source: eBay Investor Presentation, RockYou(1) eBay starts Q2 98, PayPal starts Q1’00, Yahoo! starts Q1’95, AOL starts Q1’92, Facebook starts Q4’04, and RockYou Starts Q4’05(2) Facebook data represents active users, which was disclosed on 12/05 and 12/06. Undisclosed active user data is extrapolated by applying an average active user penetration to

global Unique Visitors (per comScore Media Metrix)

(2)

Reg

iste

red

Use

rs (

MM

)R

egis

tere

d U

sers

(M

M)

Viral Marketing and Engagement is key to success

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Key Takeaways for Initial Viral Growth

New User focus

Simplicity

Novelty

Universal Applicability

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Building Viral Engagement

User

3. Indirect friends => focus on messaging• Focus on messaging to invite/notification receivers to drive CTRs and more efficient/effective invitations/notifications• Deliver increasing AND simply understood value to app w/ every friend invited (Zombies)

1. New users => build clean flows • New users absolutely key to viral engagement (vs returning user)• Focus on linear, one-action flows to maximize activation for new users• Forget registration

2. Direct friends => deliver clear value prop

• Provide clear value proposition to new user for inviting friend network (Likeness)• Ensure invitation is inherent to the new user flow to maximize viral value of user (Superlatives vs Superlatives)

4. Interested parties => allow universal use• Enable simple tools (comments, ratings, answers) that allow interaction w/o requiring full engagement w/ application (My Questions)

Direct Friends

Indirect Friends

Interested Parties

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Marketing Opportunities with Social Applications

Successful marketing for social media should include social applications:

1. Application content integration– Integrating brand or product as part of user experience– Example: Likeness quiz, virtual gifts, greeting cards, virtual actions, etc

2. Sponsorships or branding of applications– App takeover or skinning w/ possible promotion– Example: Skin application w/ sweepstakes or contest

3. Custom social application building & distribution– Build a social app for advertiser and/or distribute it through social network

specific ad networks– Example: Build, viral tune, launch, and seed an app recruiting users from

RockYou’s leading ad network jumpstarting viral spread of app

4. Rich Media

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Application Integration: Custom Advertiser Quiz

Custom size pop-up w/ additional info appears upon mouse rollover on relevant quiz choice

646x90 banner clicks through to advertiser’s website

Text link clicks through to advertiser’s website

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Application Integration: Custom Advertiser Quiz

Advertiser’s quiz promoted on Available Quizzes section throughout duration of campaign (100% SOV)

Advertiser’s quiz featured and cycled through Brand New Quiz placement throughout duration of campaign

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Application Integration: Viral Impact & Spread

News Feed

Mini-News Feed on Profile pages

Profile box

Notifications

Email Message

An advertiser’s custom Likeness quiz virally spreads through the a social network platform’s communication channels.

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Application Integration: Sweeney Todd

0.01% CTR for banner alone

65x better

0.65% CTR with integration

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Application Integration – SuperWall Card

Featured two custom-designed greeting cards on SuperWall for StepBrothers

Results:

• 8M impressions on application pages

• 6M cards sent

• Immeasurable viral impressions through association of content to friend and his/her network

Card appears in user’s profile

Greeting cards in top placement, pre-selected, and expansion upon roll-over

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Application Sponsorship

Applications can be skinned or branded with prominent placement for an advertiser with additional opportunities for sweepstakes, contests, streaming video units, and other custom programs.

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Resident Evil: Extinction sponsored the popular Zombies app for 3 weeks leading up to the theatrical release and users could enter the sweepstakes to win a weekend trip to Vegas by ‘biting’ their friends.

100x goal

Contest Registrations

Application Sponsorship

10K expected

1M achieved

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Application Integration & Application Takeovers

0.004%

0.13%0.20%

0.28%

30%

Social Networks (1) Web (1) Average RockYou

Ads

Click-Through Rate

BestRockYou

Ad Campaigns

(1) Business Week (2/7/2008)

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Application Development and Promotion

Frictionless: simple, less is more

Audience: on Facebook for their friends

Communication: integrate into the viral channels

Engagement: hook users to return regularly

Business model: design with monetization in mind

Objective: establish goals and success metrics

Obvious: make each page’s purpose clear

Keep working: develop, test, repeat

Some rules of thumb from Context Optional.

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Application Development and Promotion

Over two months since launch, over 250K users have sent over 2M branded pokes generating tens of millions of branded impressions.

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Application Development and Promotion

3rd party ad networks on Facebook can radically accelerate Facebook application adoption

– RockYou– SocialMedia– Lookery

From RockYou’s experience, advertisers can generate between 1000 – 20,000 installs/users a day

Cost ranges from $0.10 - $0.30 CPC and $0.15 - $0.60 CPI

Viral tuning is key to taking advantage of paid campaigns– 2x to 10x impact

Behavioral and interest based ad targeting forthcoming

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Acuvue adjusted viral flow of Wink application and promoted the application on RockYou network— 200 installs grew to 150K users within a month.

646x60Ad

Application Development and Promotion

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Stylefeeder is the largest fashion/shopping Application on Facebook with over 1MM installs

StyleFeeder able to convert double digit percentage of Facebook users into StyleFeeder.com users

Based on high conversion, Stylefeeder drives app installs from RockYou to StyleFeeder app

Stylefeeder.com is successfully driving website traffic through marketing of a social application mirroring site functionality

Application Development and Promotion

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Consider potential throughput of the ad network

Quality of ads => Requires constant tuning to maintain high CTR

Ad copy => Make it actionable and personally identifiable

Viral tuning => Work with a team that knows viral engagement/growth

Successful applications require ongoing investment

Application Development and Promotion

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Rich Media on Social Applications

2x interaction rate, 2x activity rate

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Who is RockYou?

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Who is RockYou?

Most popular applications/widgets across Facebook, hi5, Bebo, Orkut and MySpace

Over 700K RockYou apps installed daily and over 100 million apps live across social networks

Over 16 million registered users

Over 90 million monthly unique visitors across RockYou network

Over 1B pageviews a month on RockYou apps and 6 billion pageviews per month across our ad network

Our mission is to engage the world with social applications

6B

16M

100M

90M

700k

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Most Million User Applications across Social Networks

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Leverage RockYou’s massive outreach in social media (90M uniques, 6B PVs) for Coke product placements and media

Build integrated campaigns on RockYou’s top applications on Facebook and MySpace

– Superwall (30M users, 20M monthly uniques)– Likeness (20M, 5M)– HugMe (15M, 4M)– Pieces of Flair (8M, 4M)– Speed Racing (6M, 2M)– Birthdays (8M, 1M)– SuperPets (2M, 1M)

Work with RockYou and partners on Coke applications for design/development and distribution

– Context Optional – FaceIt!

Opportunities with RockYou

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Questions

Questions?

Email [email protected]

Page 47: Monetizing Social Media

You rock!

Engage the world.