Top 6 Ways to Make Money with Facebook: There’s an App for That!
Using Facebook solely as a way to reconnect with friends has become a thing of the past. Today Facebook is fast emerging as new money making avenue. With the rising popularity of Facebook applications , there are many ways for Facebook users to capitalize. The key to profiting from any app is creating a “sticky” app, or in other words creating a popular app that has heavy traffic and that keeps users coming back. Once you have a good idea for an app that will great high traffic (frequent visitation and usage by users), you can begin to find ways to make a profit. Here are the top 6 ways to make money with Facebook apps.
1. Selling Ads:
If the app you have created is considered to be “sticky”, it will more than likely draw the attention of folks (ad networks, companies, etc) in need of advertising solutions. In order to make money from your sticky app, you can sell ad space to ad networks and/or other companies so that they may advertise their product, service, or whatever else, on your app/app page and you’ll get paid for it. In 2009, it was estimated that a third of Zynga’s estimated 240 million dollar revenue came from selling ad space. Now there are 4 major forms of selling ads space:
- CPM (Cost Per thousand Impressions)
This kind of advertising would involve you selling ad space and getting paid per 1,000 views of that ad, or essentially per 1,000 times your app/app page is viewed. Profitability of your app is dependent on the popularity of your app; unfortunately, this works as a double edged sword of sorts. If you have a popular app, the more you will profit and if you have a not so popular app, you won’t profit as much but at the same time you don’t have to worry about any other user behavior beyond playing/viewing your app in order to get paid. This form of advertising is best for an app/app page with high traffic. CPM rates are heavily dependent on traffic levels but can start as low as $.01 per cpm.
- CPC (Cost Per Click): This kind of advertising would involve you selling ad space and getting paid based on how many times users click the actual advertisement on your app/app page. CPC advertising comes with a double edged sword of its own. While CPC advertising usually yields higher rates than CPM; CPC is dependent on user behavior. A user may visit your app/app page but there is the possibility of them not clicking the ads present. Despite that possibility, this is the easiest and most profitable form of advertising for new comers with low to medium traffic on their app/app pages. CPC rates can range from $.20-$6 per click.
- CPA (Cost Per Action): This form of advertising is kind of CPC to the next level. It involves you selling ad space but getting paid only if users not only click on the ads present but if they take the next step and actually commit to some action, be it registering, downloading something or actually purchasing whatever product or service was actually being advertised. This kind of advertising provides insurance for the ad network or company doing the advertising. While this form of advertising protects the company or ad network, it makes your profit further depend on user actions. As a developer you have to not only hope that users frequent your app/app page but also hope that they will click the ads present and commit to an action. This form of advertising is generally best for advertisers but it doesn’t mean that it’s not profitable for the publisher (you). CPA rates are directly dependent on conversion rate (how often users actually commit to an action from an ad) but rates can start at $1-$2 per CPA.
- CPI (Cost Per Installation): This kind of advertising maybe useful with creation of an app that includes a kind of credit system. For example, Zynga’s “Texas HoldEm Poker” application allows users to play poker online against other users using virtual currency. Players can earn poker chips from daily play but if they don’t want to wait another day for more chips (especially if they lose all their chips in one day), they may be prompted by a pop-ad from a company that paid for ad space, to install a toolbar or some other software to earn more poker chips. If the user agrees to the installation, Zynga gets paid by the company that the user installed the software from.
2. Monetizing Virtual Currency:
Turning virtual currency from apps into real money is also a nifty way to profit from a Facebook application idea. The way that monetizing virtual apps works is closely related to CPA advertising in some ways. Within an app that uses tokens, points, credits or whatever the virtual currency for your app is called, you can make offers to users and upon completing certain offers, users can gain extra currency to be used in the application. An offer can be something like signing up with a third party website or even “liking” the Facebook page of a third party. In turn for the user’s completion of the offer, you will receive a payout from the third party.
Tapjoy.com and TokenAds.com are great websites to checkout that can help with the third-party method of monetization. A more straight method of virtual currency monetization is allowing users to purchase virtual money with real money where one real dollar may equal $5 in virtual currency. This way you would be cutting out the third party middle mad. Utilizing both methods is a good way to reach users that would rather not deal with completing offers as well as users that would rather not pay real cash.
Getting your app sponsored is pretty much the same as if you were a star basketball player sponsored by Nike. Nike pays you to promote their products and wear Nike products when you’re playing in games. For an app, the sponsor would pay you to incorporate their brand into your app. For example the app “Food Fight” from MeetHi developers is sponsored by Tyson. In the app, users are allowed to throw food at their friends and because the app is sponsored by Tyson, it allows users to “throw” a Tyson’s chicken wing at their friends instead of an unbranded chicken wing. The app “Living Social” scored big with a Coca Cola sponsorship and the app “Where I’ve Been” is sponsored by Obritz just to name a few.
4. Sell products:
This is a “no-brainer” way to make money through Facebook. Utilize apps such as “Storefront”, turning your profile into a mini e-commerce site, to sell products or “Radical Buy” app, which turns your profile into a mini online auction also allowing friends to sell items for you and receive commission.
Jacquelyn Myers says her Facebook page where she utilizes the “Storefront” app accounts for 50% of the internet sales for her small business “Baby and Me Gifts”.
Another way to sell products on Facebook is creating an app where you act as a middle man. For example the “iLike” app allows users to sample music and if they wish to purchase the sampled music, they can do so through iTunes or Amazon.com. In turn the “iLike” developer gets a percentage of the sales made through the use of the application. Selling virtual products on Facebook is also profitable. For example, like the apps that allow you to buy $1 gifts for friends on their birthdays and post it to their walls. Another money maker is through selling merchandise from your hit application, like the hit Zynga app “Petville” where users create a virtual world where they care for their adopted virtual pets. It may profitable to allow users to purchase clothing with their favorite pet’s image on them.
5. Sell Services:
Creating an app where people can purchase services is also profitable but only if the service is something that users find useful. A possible avenue for selling a service is providing a service that edits pictures like the app “Picnik”. You can start by offering free samples or letting certain features be available for free while having users pay for extend features. For example, the app “Birthday Card” by RockYou developers allows users to create custom cards to send to friends (virtually) or allows them to pick from a preset of already designed cards. The user may create their own card for free and select some of the preset cards for free but some of the other fancier cards must be purchased.
6. Selling Apps:
Selling the app you create or had the idea for is as straight forward as it sounds. If you create or are the brains behind a hit app, it may gain the attention of companies who want to purchase the app or a version of the app from you. Avenues for selling apps include Facebook’s development forum, websites InsideFacebook.com and Appbid.com or you could even go about selling apps from your personal Facebook profile. Selling may be a tricky decision because your app may be able to make you more money than a onetime sale. If you sell the app you would be only profiting from that one sale but keeping it could mean continuous profits if you know what you’re doing.
For example, the social gaming app development company Zygna founded in 2007, is second on the developer leader board behind Facebook itself and currently responsible for 3 out of the top 10 apps listed on the application leader board. They may not be as powerful of a company had they sold some their early apps like “Farmville”; currently the 5th top app contributing to the company’s 9.5 million daily active users and millions of dollars a year social gaming empire.
Last year, Zynga pulled in an estimated 800 million dollars in revenue with competitors Playfish and Crowdstar raking in 250 million and 1.6 million respectively, illustrating the money making force behind app creation. Also, on the website AppBid.com, you can see apps being sold from anywhere from hundreds to thousands of dollars. It’s all about taking advantage of the power and popularity of Facebook. If you want to be able to make a quick buck, no doubt there’s an application out there to help you and if there isn’t, get thinking about an idea for one and it may earn you millions.