With New Funding and Formats, Social App Firms Vie for Ad Dollars

Social app developer and ad network RockYou has embraced video ads in an effort to make the company “a major player in the video space,” in the words of CEO Lance Tokuda.

Advertisers will be able to “socialize their brands” on the RockYou Ads Network through video distribution on most widely-used social networking sites, particularly MySpace and Facebook.

RockYou’s move is one of several experiments being tried in the constantly evolving app-based ad marketplace. Also this week, RockYou competitor Slide is launching an original Web series with Ashton Kutcher’s Katalyst Media. And social app developers and ad firms continue to receive investment; iWidgets and SocialMedia Networks both recently announced funding rounds.

While the recession’s impact on social marketing budgets is still an open question, there evidently is an impact. Tokuda acknowledged “the current economy is very challenging,” but he believes video ad spending will continue to rise.

“We’re basically turning our entire network into video inventory,” he said. “Almost every RFP [request for proposal] we get has a video request.”

Tokuda said advertisers have been looking for a centralized place where they can distribute ads through multiple social networking sites without having to customize the ads to suit the sites’ variations. Pointing out that MySpace and Facebook have different approaches to ads, with Facebook not offering IAB standard ad units, Tokuda said his company is “filling the gap” between the two sites. “Literally, it’s like a one-stop shop,” he said. RockYou says it has more than 130 million users worldwide.

Taking a different approach to social network advertising is RockYou competitor Slide, which will use its “FunSpace” Facebook widget to distribute an original Web series called KatalystHQ.

The series, created by Katalyst Media, a production company co-founded by Ashton Kutcher and Jason Goldberg, is described as a “reality parody about working in Kutcher’s production office.” It allows viewers to follow the company’s staffers “as they humorously navigate the excitement and perils of corporate life set against a backdrop of the television and film industry.”

The show, the first sponsored Web series on Facebook, is sponsored by Cheetos.

In a statement, Kutcher said the series was created for Facebook by Katalyst employees “who are active and engaged users” of FunSpace. “We are excited to bring the very funny stories that originate from our office to the FunSpace audience who is interested in peeking inside a production company in Hollywood,” said the actor.

Meanwhile venture capital firms continue to sink money into app and widget developers. Last week SocialMedia Networks secured a $6 million funding round, which will support growth of its sales team and corporate partnerships. And iWidgets won $4.1 million to support development of its social syndication technology.

Zach Rodgers contributed.

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