The CEO of an ad network of social applications discusses CPMs, adoption numbers, and other metrics. Second in a two-part series
Last time, Chris Cunningham, founder and CEO of appssavvy, the largest ad network of social applications, described how some brands use application advertising. Here he describes adoption rates, CPM rates, and his prognosis for MySpace, Bebo, and Friendster in their rivalry with Facebook.
Harry Gold: Why should online advertisers take advantage of social media applications?
Chris Cunningham: In a word: engagement. Internet consumers are spending more than three times the amount of time utilizing social media applications over their profile pages. They're engaging with their interests via applications, interests like games, music, books, travel, and more. Brands that interact with consumers via social media applications in a contextually relevant fashion are seeing tremendous success, and as more and more consumers interact with social networks and applications the opportunity grows exponentially.
HG: Do you see any danger in crossing the line when making an application too commercial or branded? Where is that line and how do you make sure you don't cross it?
CC: Again, if it's contextually relevant the user won't mind. On the flip side, if a brand wants to build its own application its needs to provide some, actually a lot, level of utility and content. Our work with Alberto-Culver's V05 is an excellent example.
It is also important for brands to understand that the mission should not be about pushing a message but rather bringing something to the party. Building applications only works if done the right way.
HG: Is there any demographic info on application users you can give me?
CC: It is really dependent on the social network. It is really that simple. For example, if Facebook's core audience is 14 to 35, that's the same demo appssavvy sells against on behalf of brands and advertisers.
It is this reason V05 is on Facebook. It is also why Kohl's back to school application promotion was on Facebook and why movie studios, such as Sony Pictures and MGM, are reaching Facebook consumers via relevant social media applications.
HG: How do your applications compare to others in the space?
CC: While we do custom work, our key is working with the developers and publishers of social media applications. There are already tens of thousands of social media applications on Facebook. Our goal is to work with as many of them as possible. In less than a year, we've established relationships with more than 100 providers that have created more than 500 applications. Thus, we have work to do, and that work is to assist these developers and publishers to connect with brands and agencies.
HG: How about adoption numbers? Details, specifics?
CC: It is not black and white and varies from application to application and campaign to campaign. However, the significant growth in applications is a strong indicator of the demand. For our clients we focus on metrics, including click-through rate, number of installs, time spent, quizzes taken, votes, photos shared, and more.
For example, when we created custom Starship Troopers characters and tools within the Armies application on Facebook, more than 260,000 users upgraded to the Starship features. For our Kohl's video contest, there were more than 125,000 votes for the best videos.
HG: How do you charge for your advertising? What is a CPM (define) range?
CC: We charge on both a CPM and CPI (cost per install) basis, but primarily CPM. Our rates vary, but typically CPMs are in the range of $8 to $15. These costs are, obviously, higher than the typical advertising on a social network run of site, for example. The reason why is that our solutions are contextually relevant. It is our belief that context is key to the ongoing marriage between consumers and brands within social media applications.
HG: How do you track and report results and ROI?
CC: Social media applications are no different than other form of digital media...we're tracking and reporting on measurements, including click-through rate, specific engagement metrics assigned before the campaign flight, time spent, actions taken, and more.
HG: In what ways can you integrate with traditional ad servers like DART and MediaPlex?
CC: Technology development and integration with third-party providers are keys to taking the social media application space to higher levels. In July, appssavvy released a tool designed to aggregate social media application and platform data. The tool connects social media application developers and publishers with brands and agencies. It is an open platform integrating data from any social network -- the initial networks plugged in include Facebook, MySpace, Bebo, and hi5. It also has integrated data and analytics capabilities from DoubleClick's DART for Advertisers and Sometrics. We are working on and have plans to integrate with other leading digital marketing technology providers.
HG: Do you think MySpace, Bebo, and Friendster will be able to compete with Facebook in the long run?
CC: MySpace yes. We have a strong relationship with MySpace and believe it is on the right track, that's for sure. Right now, Bebo isn't as app friendly, but we're seeing signs that it is moving in a positive direction when it comes to social media applications.
The key for this segment as a whole is openness. Tear down the walls and enable developers and publishers to create within a thoughtful manner. There needs to be rules, criteria, and more to do this right. That is what social network platforms are all about -- creating. The Internet is about creating and self-expression. While Facebook is leading, there's a ton of opportunities for social networks in this space. I'm especially excited about the possibilities around LinkedIn and Yahoo.
HG: What does the future hold for this space? Where is it going? Please elaborate and put in context to advertising opportunities.
CC: The sky is the limit, especially with the growth of social networking. Over the past year, according to comScore, we've seen social networking grow by 25 percent. That is huge and there's no slowdown in sight.
My prediction is that social media application advertising will outspend online video in the next year or so. While there are tons of video being consumed online and advertisers are trying to capitalize in that area, the amount of time consumers are spending with social networks and subsequently applications is incredibly powerful to brands and agencies.
I couldn't be more excited about the future of this space. I was at the forefront of widgets and I've seen how fast they evolved into the application space. The next evolution is going to be even more exciting.
HG: What do you think about Google's OpenSocial?
CC: It is hard to comment right now because it's not fully operating with all partners. In concept, OpenSocial is great because it will enable the distribution -- the portability and reach -- of branded applications across various platforms. Today, distribution includes rebuilding and coding applications to work properly on different platforms. This is not efficient, obviously.
When it fully launches, OpenSocial could have a tremendous impact. It is a great idea that we can't wait to learn more about and work with.
HG: OK, give me the elevator pitch on why I should come to you as a media planner if I want to brand in this space. Seventy-five words or less, please.
CC: Within social networks, users are spending the most time with applications. This is where the audience is for media planners. They should be approaching appssavvy because of its focus on contextually relevant solutions, which benefit the entire ecosystem.
For the application space to be successful there has to be a bridge between developer and advertisers. We have made significant progress in building that bridge and establishing appssavvy as a partner and leader in social media.
As founder and CEO of Overdrive, Harry Gold is the architect and conductor behind the company's ROI-driven programs. His primary mission is to create innovative marketing programs based on real-world success and to ensure the marketing and technology practices that drive those successes are continually institutionalized into the culture and methods of the agency. What excites him is the knowledge that Overdrive's collaborative environment has created a company of online media, SEM, and online behavioral experts who drive success for the clients and companies they serve. Overdrive serves a diverse base of B2B and B2C clients that demand a high level of accountability and ROI from their online programs and campaigns.
Harry started his career in 1995 when he founded online marketing firm Interactive Promotions, serving such clients as Microsoft, "The Financial Times," the Hard Rock Cafe, and the City of Boston. Since then, he has been at the forefront of online branding and channel creation, developing successful Web and search engine-based marketing programs for various agencies and Fortune 500 companies.
Harry is a frequent lecturer on SEM and online media for The New England Direct Marketing Association; Ad Club; the University of Massachusetts, Boston; Harvard University; and Boston University.
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