BradPace.com

We are not in a bubble but the social networking space is getting more competitive.  Just on a side note I have noticed that many people who had very successful apps in the beginning are no longer building apps and have moved on to doing other things.

There are many ways to monetize an app: cpn, cpc, cpi, incetives, cpa, survey (like peanut labs), and cpe, transactions, gifts and subscriptions.  The banner model is broken and does not work.  So we need new and innovative ways to monetize the apps.

Videoegg just launched a new product called ad frames.  Basically there is a small preview on the page and when the mouse is placed over the ad a larger video frame comes up with the real video ad.  Advertisers only pay for actual views of the video. Lookery now has a guarenteed CPM of $1.25 for app developers.
Direct response is driving most of the money on social networks.  Branding dollars are starting to come as social networks grow.  The big brands don’t have a choice but to pay to get involved.  Most large brands need to do many things like sponsoring apps, buying ads and participating in anyway they can. Most brands spend 6x more on TV than on online spending.  This will shift to more online spending over the next few years.  We are monetizing new kinds of user experiences.  It doesnt matter knowing what a user buys if you know who the user actually is.  This is what most large companies are having trouble understanding.

How effective is the current monetization methods?  Many apps are making money with virtual currency.  Ads are not working as well.  VideoEgg obviously says that ads that are engaging user better and are making app developers more money.

From an advertiser perspective all the ad companies are very much about branding and selling CPMs and no one is talking about actual trackable performance.  The good think about AdWords is that it is based on results and tracking ROI.  It is conserning that the ad networks on social networks don’t speak to this.  I am sure this means that CPM is the only way to monetize social media. There is still a lot to figure out in this area.

How do you gage application engagement? The facebook numbers are fairly useless and can be misleading. It is a good idea to break and track users into different groups. Like fluff friends does this with creators, sharers, and consumers. Also compare viralness and stickyness. Both need to be tracked. Time spent on site, page views per site, number of monthly visits, number of content items added are some examples of good numbers to track.

What makes an app fizzle out? Is the app dynamic and is there something new each time the user comes to visit. The type of app also matters. Is it something that you only need to do once? The best apps always have more tasks for the user to do.

Packrat is a very engaging app and looks good. Engagement is different for each app. The more the user is involved the more the engagement. Ways to improve engagement include unlock able levels or features and always adding new things. Also user generated content is a great way to bring users back. User forums have also been very engaging for users to create a community around your app. Some apps elect a user to be the moderator of the forum and to filter feedback.

What makes an app viral?  Viral marketing is all about your customers selling to other customers. Really it comes down to getting friends to invite friends. Viral marketing is not new, it just happens more easily and much faster.  Now viral growth is getting built into APIs and the actual platform.  That is what Facebook has done well.

With recent changes to Facebook most app developers are focusing on tuning their apps and optimizing the user interface.  Just like content is king on the web, functionality and user experience is king in apps.  If you have a great app it will grow.  As the platforms change their policies and systems, the good thing is that everyone has to play by the same rules.

Let people know that you have interacted with them.  When this happens people will participate more because they know that something happens at the end.  Like Scrabulous, you know that you have to take a turn because your partner is waiting for a turn.  These useful personal interactions are key to viral growth. Watch your uninstalls because vitality doesn’t do any good if you have a bunch of uninstalls. The average uninstall rate used to be 20% and now it is up to as high as 50%. Redo the user interface and get new graphics to re-engage users and you can also email them and let users know about new features and enhancements.

Games continue to have the largest viral growth and have not been hampered by recent changes by Facebook.  The game experience is much different than other web experiences.  Games offer an experience that progresses.  Things change based on what the user does over time.  That has helped them grow viral.

User feedback is vital to viral growth.  If you listen to your users you will know what you need to do to improve the user experience.  This will help virality.  Think how you can reward your users for their actions like leaderboards and scoring.

As I said in a previous post, most experts agree that you need to launch a new app with a very conservative stance on growth.  So if facebook allows you to send 5 invites per person per day then only send 3 so you can make sure you can optimize the experience and the messaging.  Once you actually start seeing viral growth you get more aggressive and turn up the invites.  This way when your app is viral you have the ability to grow your app.

A short session based on an O’Reilly report.  Over 600 new apps are still added to the system everyday. App usage has leveled off.  And Usage of superwall and funwall are declining. Most categories have a defined app what is the big winner.  A few don’t like food and games.  The top used apps are games, music, dating, travel and just for fun. Some of the categories with the most opportunity are travel and fashion.

What is a social game and how does it differ from a multi-player game? Bringing people together who know each other or who have shared interests. The psychology of social games will continue to grow. Experiencing the web with your friends is more enjoyable than by yourself. Users are looking for lightweight games that are easy to play and understand. Social games can reach a much broader audience and the social experience is more important than the actual game. People enjoy competing with each other and having a winner and a looser.

How do you monetize games? Many companies see the application as the ad unit. So the game itself is a branded ad. That is what BuddyMedia is doing now with several major brands. It is a good way to get big brands into the social media. BuddyMedia averages a partner deal of $100k to build their app. Sponsorship of games has also been productive. Videoegg ads have also been successful. Some games actually charge the user for upgrades. Like ghost racer allows users to upgrade their car for $20 and they make about $1k per day from upgrades. There are 19 year olds that are making 50k per month on their social games.

Some drawbacks to gaming is that games are hit driven. Meaning that they go viral and take off. Then they level off and die. Continued growth is difficult. People tend to tire easily from playing a game.

A panel from Google. Social objects are anything that promotes a social activity. For example kids bringing home a stuffed animal for the weekend and you do activities with it, take photos and tell the story the next week in school. The question is how do we socialize objects online without having to create yet another social network? There are 18 platforms sighed up for OpenSocial and has access to over 200 million users. OpenSocial is just to the point that it is useful and is live. Most sites are launching with very limited functionality and will continue to add more as time goes on.

OpenSocial is one API and 2 parts.

1. client side javascript
2. server side rest

3 core sets of service. People (who am i and who are my friends), activities (post what is happening), persistence (storing the data on the platform).

Caja – when gadgets go bad. Caja is spanish for box and is meant to put apps in a box so they are controled. Gadgets can be a new way for spam and viruses if we are not careful. That is where caja come into play. It is a javascript sanitizer. It is optional but recommended for opensocial containers. Eventually will be secure enough to run gadgets inline instead of in iframes. That is the end goal of caja. Some platforms will require the use of caja. Users could also get a security warning if caja is not used.

Shindig – Open source project that is the reference implementation of opensocial plus gadgets stack. The goal is to launch a new simple containter in under an hour’s work. Contains a javascript container, gadget server, opensocial container javascript, and the opensocial gateway server. Java and javascript version are running now. PHP gadget server contributed by Ning and was recently rewritten to match java. They are looking for other platforms.

Stop waiting for OpenSocial to settle down. Now is the time to start coding. Everything is ready for production!

Jai Shen from Rock You:

Launch an application with a marketing and validation test. Test the audience, messaging, and channels (different viral channels on each platform). News feed, notifications, email, profile, invites, profile action, non user pages and profile are different channels to think about. Understand your application vertical like channel, content, quiz, games, gifts, and self expression. Messaging is all about the call to actions. Do users like it and does it work. Once you have the app built and messaging working well focus on groath. Viral groath is when one user causes at least one user to install the app. The largest part of app development is tuning. Track everything, Graph it and trend it. Manage your notification and invite allocations and notification spam blocking. Rock you suggests to be consurvative at the beginning until you understand your response. Then get more aggressive when you have confidence in your invites. This will ensure that your app does not get penalized in the beggining while you are building your app. Once you have grown your app focus on user engagement. Saturated social circles and tune for a better user experience. Rock You has apps that have had invites that have gone to every user in facebook. That is saturated!

Virality. grow outside the core group of users. Get users to spread to others. Dont hurt your user experience. Many people forget that a good user experience will be the biggest factor in making an app viral. Non user pages have worked well for rock you to engage users before they install. Many users want to see the app before they install.

OpenSocial has some challenges. The audience is different. It has a huge audience and has a promiscuity factor. Open social has a different user model. Scrapbook is big in Orkut. OpenSocial channels – news feeds (most people on open social are not really using yet), Profile, main page, bulletins, messaging and invites and non user pages. There is still a lot in the air with Open social. From a business perspective, Rock you sees not difference in opensocial as facebook. Focus on apps that are not dependent on viral channels.

Tyler Ballance from Slide. Facebook platform

Before you start understand the platform. What data is available? Understand the audience of the platform. What can the API do? Beebo still has just a subset of the functionality that facebook has to their developers.

Going cross platform. One approach is sharing the exact same code base. This has worked for top friends. Another option is to copy the code and change up the UI. This is what fun wall did. Use consistant branding when you go cross platform. Users start to recognize top development companies and this gets them more trust with the users. Use FBML so that you get the look and feel that matches the site.

The google computing cloud model is about getting the computer out of the way so that we can be fore productive. The social cloud is about getting the computer out of the way so that we can interact more easily and be more productive. People are the killer app on the web. Get the barriers out of the way so that people can just connect.

How do you know if it is social? Add …with your friends to the end of the sentence. You need a new insurace agent … with your friend. You need to shop for a new car … with your friend. You will find new music today … with your friends. You will plan a trip … with your friends. That means they can be social.

Some hard problems left to solve

• Who are your? Authentication is important and how do you get access to your data and your friends. How many of us used the same username and password on sites that dont need security and ones that should be secure? All of us.
• Will you be my friend? Invitations are out of control and people are getting more and more hesitent to share their friends info.
• will you build an app for me? Building an app again and again and again. This should not be necessary.

The goal is to make the social web better. Googles answer to these problems is OpenSocial. It seems like this ideology is really focused on making the user experience better on the web.

Step 1. OpenSocial. If you can build a web app, you can make it social, and reach more than 200 million users. 1. invent it, 2. build it, 3. run it.

What has Google learned about social computing? There are classic social networks like beebo, myspace, hi5, nicng, orkut, plaxo. There are business networking sites like linkedin and viadeo. Then there are enterprise software like oracle and salesforce. Lastly there are communities like hopy sites, interest groups, marketing networks etc. There is a large breadth of interest.

Next, open source is a good idea. Shindig is an apache incubator project. For this to work you have to get some things right. Clear mission, open license, engaged community and real world use.

Will other google apps offer suppor for opensocial and get social feature? David Glazer from google kind of dodged this question but said that they have had conversations about adding such features to MANY of their apps. This type of functionality will be really exciting.

EcoSystem history – MySpace has allowed application for years. Myspace is about self expression and is about high levels of customization. The new developer system is more robust and allows for more functionality.

Myspace developer platform supports 3 sets of APIs:

1. Open social apis – full support
2. REST apis – server to server communication and includes oath authentication.
3. ActionScript apis – flash support

Opensocial – Why Opensocial? Myspace says they have a commitment to open standards. They opened up profiles over 3 1/2 years ago and they still believe in being open. They also believe that portability is important and allows developers to spend more time building apps and less time on rebuilding the same app for each platform. Portability also allows data to be shared between platforms. Also will have full support for the OpenSocial public spec. They will also provide additional MySpace specific extensions like bulletins and additional attributes for bands.

Platform surfaces – The development surfaces are different on myspace than on other platforms and provide some new functionality for app developers that has not been available on facebook. These surfaces include the profile surface, canvas surface, user homepage surface, application gallery, and application profile. The user homepage is private to each user and no one else can see. This will allow apps to display information that is important to the user but not to everyone else. Like an ebay bid widget or a twitter app that shows all your friends twitters.

Security, privacy, and safety – Applications will go through a safety review processbefore going live to our members. Applications will be governed by the same privacy controls that are in place for members. They will be employing new technology designed to ensure that applications are safe for end users. This includes proprietary MySpace technology and also includes Caja which is a Javascript sanitizer created by MySpace and Google.

Balancing vitality and the user experience – They are taking a long term approach to growth and distribution and ensure a clean application experience. Artificial or spammy growth is not necessary. Initially applications will be able to initiate the workflow for sending a message on a 1 on 1 basis. Basically this means that the user will send any invites just using their standard messaging system. It also means that viral growth will be very difficult. He said that this may change in the future.

Presented by Chris Messina from Citizen Agency. He went to civicspace to spreadfirefox to flock to citizen agency.

Moving from a system centric type system to a citizen centric model. The web citizen has an ID, provenance, friends, agency (choice is good for everyone).

Aspects of a distributed social network:

• Something that can identify you
• Manage your profile form one place. Push everything out to the web. The web should update from me not the other way around. This makes it easier for the user
• Flexabile permissioning system
• Based on open formats and protocals

Benefits of the distributed network

• Cross pollination of data
• Spend more time updating profile and keeping it up to date.
• Can compete outside of the individual platforms. This increases competition.

Problems with the distributed social network

• How do you find your friends. Facebook does this pretty well but it is hard on the web in general.
• Maintaining a common interface. The further you get out from the trunk the more inconsistant the experience is.
• Interoperability. How do you upgrade?
• Addoption
• Who do you fix and troubleshoot problems
• Identity theft is a problem

Components of a DiSo site

• People, friends and identities. Publish your friends list so you can move it around.
• Messaging and notifications. Too many and people are not reading them. There is no way to prioritize them.
• Limiting and giving various levels of permission. Plaxo does a good job at this.
• Groupings and events. Viddler – join a group. Upcoming. Need openid for events and groups.

What can be done today? Allow users to say where else they are on the web using micrformats (microformats.org) . Use openID. Use oauth.net. Use jabber.

Current status. diso-project.org. or diso.googlecode.com. Creating design patterns and how things should be done (look at flickr photos).