Social Network CPMs: A Penny Arcade

Run-of-network ads on social communities fetch a measly 5 cents per CPM, while those associated with a social application command 70 to 80 cents, says Seth Goldstein, chief executive of SocialMedia.

"We have to march beyond $1 CPM and move to $2 to $3 to $4," he said, speaking today at the Interactive Advertising Bureau's forum on user-generated content and social media.

Keep in mind that Goldstein has a vested interest in the success of social media applications. After all, he's building a business to help advertisers use social media.

When asked how social applications differ from widgets, Goldstein said applications are more engaging than widgets. "This is one man's view. Widgets are from '06 or '07. They tend to be more one-way," he said. "You cannot have an application for one."


Pointing to an example of an engaging application, he pointed to one developed for BMW's 1-Series that let Facebook users design their own car and invite friends for a virtual road trip.

Asked an application's lifespan, Goldstein said: "An application is like a song. You rarely have a song that's popular forever. Bands are popular, singers are popular."