How are facebook applications making money?
Published by Rodney Rumford October 14th, 2007 in Facebook, Facebook Applications.
There are several ways that applications can make money on facebook. It is important to note that applications can have business value without creating revenue. Apps can create value/revenue by: driving traffic to an outside web property, extending a brand, raising brand awareness, creating a brand this might live off of facebook later, etc.
Ways that facebook applications can generate revenue:
* There are CPM revenue models for pageviews of facebook application canvas pages. These vary depending on who is serving the ads.
* Monetization of digital goods that users of an app will pay real money for.
* Cost per click models from the many ad networks currently on facebook: RockYou, SocialMedia, Lookery, VideoEgg, etc.
* Cost per app install models (this specific model is short lived: possibly 18-24 months while the app marketplace matures)
* It is my belief that uniform payment collection systems will emerge on facebook: either from facebook or a 3rd party. This will lubricate the wheels of digital commerce.
* Subscription models from application use: Tiered services and payment for higher level of functionality.
There are facebook applications that are making anywhere from 10K-100k per month. Yes it is true; but most application owners do not want to discuss this for obvious reasons. 
I also think that facebook will find a way to help applications monetize the visitors: possibly by a targeted behavioral & contextual ad network serving technology. Remember that contextual ads are the goose that lays the golden eggs for Google. Imagine contextual ads combined with behavioral targeting; the fit between desire, intent and action could be quite valuable. There is also the possibility to further monetize across the entire facebook eco-system beyond applications.
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C’mon Rodney, don’t let the cat out of the bag! I liked it better when the press is going around saying that no one is making money off of FB apps. “It’s all a big Ponzi scheme!!”
Haha-
thanks rodney- i think you cleared it up for me. right now we will concentrate on building a great app, and monetization will hopefully follow.
“There are facebook applications that are making anywhere from 10K-100k per month.”
Can you give us a hint on what apps you’re talking about? Please?
-Andrew
I list a bunch of apps that are making huge coin, including one that made WELL OVER 100k in a month.
Check them out. I even have a step by step on how to build apps that will make 10k a month plus in short order.
http://www.bestcpanetwork.com/index.php/2007/11/points-based-facebook-applications/
http://www.bestcpanetwork.com/index.php/2007/10/monetizing-your-facebook-application-video-of-my-talk/