Sexy Widget

One of the great things about living in San Francisco is the opportunity to go out a few times a week (if you want), and talk to folks who have done some pretty impressive things on the web.

Tonight I went to a Stirr event, and listened to Evan Williams (Blogger, Twitter, Odeo, Obvious Corp), Jonathan Abrams (Friendster, Socializr), and Michael Cerda (Ooma, Jangl).  The theme was "founder hacks - pages from the unwritten playbook."

I was struck by how punk rock each of the presenters were - they weren't politically correct, and they didn't mince words.

Evan Williams talked about how the the biggest threat that start ups face is losing time on unimportant tasks.  His message?  Just say no.  Say no to speaking engagements, say no to random, peripheral bizdev meetings, and say no to those big, sexy potential partners who just want to poke around.  Keep your eye on the prize and keep cranking away on what's really important.

Jonathan Abrams went even farther.  He said that smart money is a myth, and that its benefits are overhyped.  He named names - Kleiner, Benchmark, etc. - and made the point that blue chip money attracts mercenaries who aren't as hungry, passionate, and committed as those who sign up with companies that aren't getting all the buzz.  His advice - avoid the big name VCs because it attracts a bad element.

Michael Cerda told the story of how a single bad hire of somebody from a big company background, who didn't share the same DNA as the rest of his company's employees, ended catastrophically when this bad hire threw the company under the bus by bringing his issues directly to the Board in the middle of a financing round.  His advice?  Screw the common wisdom that says that diversity of hires is best, and hire folks that you feel comfortable with and you trust.

Of the three presentations, Jonathan's resonated with me the most.  Silicon Valley can be an intimidating place.  Everybody here has gone to a top school, and done impressive stuff.  The tendency is to be wowed by pedigrees over passsion / hunger, and that's a mistake that happens from the smallest start up to the fanciest VC.  Jonathan said it took him ten years to figure out this is bullshit, and that the real trick is to see through the hype and judge ideas / businesses / people on their merits, and not on their pedigrees.

Fight the power.

• Nick Carr is giving away copies of his upcoming book - "The Big Switch" - to anybody with a blog.  I consider Nick to be one of the two most insightful writers in the tech blogosphere (with Marc Andreessen the other)
• Joyent offering free hosting for one year for FB apps.
• hi4, Ning, and Plaxo have all gone live with their OpenSocial sandboxes.  Says the OpenSocial blog, "...which means that an application can now run on multiple websites. For example, previously, Songs iLike could run on the Orkut platform, but as of last week, it can run on hi5, Ning, Orkut, and Plaxo."
• Jeremiah Owyang has a very thorough post detailing why it matters that the large social networking properties are opening up as platforms.  This post was from a few days ago, but I missed it somehow.  It's a good one.
• Spleak Media has launched a distributed celebrity gossip community  that allows users to publish via IM or widget.  Where's the Facebook App guys?
• Fisking Bebo: Ivan Pope calls out Bebo's Orwellian use of the word "open."  You tell them Ivan!

My employer recently completed a 10K install campaign on Facebook, in support of its new consumer review app, and I thought I’d share our experiences and take-aways.

The primary options for Facebook advertising networks are the following: RockYou, Social Media, Cubics, FBExchange, Lookery, Slide, and Video Egg.

While I made a few calls around to check pricing and processes, I had pretty much decided beforehand that we were going to use RockYou because of their reach, their expertise with apps and viral marketing, their brand, and my belief that they wouldn’t do anything too sleazy in pushing our app because they have a big brand to protect. 

RockYou came in at $0.50 per install for our campaign.  There were a few others that came in $0.10 lower than that, and I’ve heard of installs going for as little as $0.30.  Rates varied depending on how large a campaign you could commit to.

Once I had decided on RockYou, the first step was to sign a basic insertion order.

Once that was done, it was up to us to provide RockYou with the following promotional materials:

-    A 300X250 Graphic (to be displayed to FB users following their install of a RockYou app)
-    A text title (40 characters) and body text (75 characters) that described your app
-    A blue Facebooky button and button text (e.g. Add Reviews!)
-    A 55X55 icon for use in banner ads

We decided to have a professional designer do our big graphic, as the quality of the graphic can have a big effect on click throughs and conversion.   Even though you only pay for installs, a reasonable conversion rate is important as RockYou reserves the right to cancel your campaign if it isn’t converting.  Here’s what we came up with for the graphic (and this ended up converting at 3X the rate of our other promotional materials):

Once RockYou had our promotional materials, they were able to turn on our campaign in hours. 

Once the campaign was on, the impact was dramatic.  We immediately saw massive rating activity, and generated a few thousand installs per day until our campaign was finished.  RockYou has the ability to push far more than a few thousand daily installs, but they prioritize based on how much the advertiser is paying per install. 

Our daily install rate was not flat – one day we did close to 3K, and one day we did about 1K.  I don’t know whether this was due to more aggressive promotion of our campaign by RockYou, or due to other factors.  This fluctuation in the rate of installs makes it hard to predict when your campaign is going to end – this actually bit us in the ass a little bit, as our campaign ended more quickly than we expected.  This was a bummer because we rolled out a new, social aspect to the app (compatibility tests based on rating) while the campaign was live, expecting to have a few days to gauge the results (when it reality we had one day).

RockYou does not provide publishers with live stats, or any automated tool to check stats.  We were dependent on our account manager to email us sporadic install updates.

When we realized that our campaign was being used up faster than expected, we contacted our account manager (late on a Friday afternoon), and requested that they pause the campaign until we could finish our app tweaks.  They complied, and then at our request, turned back on our campaign when our dev work was done on a Saturday afternoon.  We appreciated that like us, RockYou appears to work seven days per week.

One of the most disappointing, and unexpected, aspects of our campaign was the amount of international traffic we received from the campaign.  Our app saw only about 25% US traffic during the campaign.  It’s problematic for a consumer review app (that is supported primarily by US advertisers) when you’re generating hundreds of reviews in Turkish (Turkey was the third largest source of traffic after the US and the UK).

Other than the distribution itself, the most positive aspect of the campaign was the ability to test different aspects of the app, on the fly, with enough scale to measure the impact of small tweaks.  Over the course of a couple of days, we were able to substantially increase PVs per visit and ratings per visit by tweaking some features.  Using Google Analytics, we were able to set up goals that corresponded with important behaviors like sharing the app, or sharing a review.

We also captured a lot of data about how folks interact with the app, which should help us to make it stickier, more social, and generally better.

My advice to those considering a purchased install campaign is as follows:

• Capture as much analytics data as possible during the campaign, and make sure to make tweaks to your app on the fly so that you can make A/B comparisons
• In a similar vein, do your best to figure out exactly what data you want to capture from your campaign – I see data capture as almost as important as marketing distribution for your initial paid campaign
• Make sure the social aspects of your app are fully built out before launching your campaign – you want to make sure you get full bang for your buck from second and third degree referrals
• Check with your ad network about your ability to pause your campaign on the fly, should inspiration strike you about a potentially viral feature that you can add
• Be aggressive about hounding your account rep for install data so that there are no surprises about how quickly your campaign is expiring
• If your app involves UGC, figure out how you’re going to handle content in foreign languages
• Don’t half ass the promotional material – spend a little more for a designer
• Don’t develop a long term dependence on paid installs.  As fun as it is to watch all your numbers going up, eventually your app is going to have to stand on its own.

All in all, I was happy with the results of our campaign, and was impressed with RockYou.  They were responsive and professional, and showed that they can deliver installs in a hurry.

If anyone wants to share their own experiences with any of the FB ad networks, they can click through and do so below:<br>

• Dare Obasanjo makes the case monetization could happen in the news feed / mini feed on Facebook, using Flixster and iLike as examples
• FeedNames introduced a neat widget concept in which you plug your RSS feed in, and it spits out a tag cloud of important themes on your blog.  I tried it out and it's almost, but not quite, ready for prime time.
• Blog commenting system Disqus, which many of us have tried on A VC, is open to everyone now.
• Inside Facebook has a list of upcoming Facebook events
• As reported by Mashable, Bebo is rumored to be launching an easy way to port Facebook apps over to their community.  That would be sweet.
• A couple of PhD students have launched the CO2Stats widget, which translates your site's traffic into an estimate of your site's carbon footprint.  The founders say: "We were inspired to develop CO2Stats after watching John Doerr tear up about his generation's obligation to clean up its impact on the environment. We decided to make it simple for everyone to be part of the solution."
• Widgetbox has announced new features to its Facebook App accelerator product that include the ability to customize news feed stories and invites, and the ability to display a fully functional Flash widget on your profile page (before you had to click through to the canvas page to see it)
• The OpenSocial blog has announced an early container sample, which "should give you some idea of the Service Provider Interface (SPI) we will provide to any website which wants to host OpenSocial gadgets."

At least one Facebook app appears to be looking to drive installs with Google AdWords:

Derek from Widgetslab points us to an interview from Forbes.com with RockYou's Jia Shen.  From the article:

Since RockYou’s founding two years ago, 90 million social networkers have downloaded its applications. For this, RockYou is making more than $100,000 a month in revenues showing ads alongside its mini-applications for brands like AT&T     (nyse:       T -        news     -            people     ) and Sony     (nyse:       SNE -        news     -            people     ), as well as by plugging other developers’ mini-apps (for a fee).

$100K per month?  Gulp.

Could that be right?  Even with big brands advertising plus the cost per install Facebook stuff, that's all the revenue they're seeing?

My best guess is that even though this article was published just five days ago, it's already out of date.  I would imagine that RockYou's CPI revenue alone will exceed $100K in November.

TechCrunch is reporting that Clearspring is publicly launching widget powered advertisements at AdTech.  Just to be clear, these are not ads overlaid on top of the widgets of the publishers who use Clearspring - rather, these widgets ARE the ads.  Here's an example:

These sorts of ads are a nice fit for Clearspring because of their strong relationships with large media companies with plenty of budget for brand oriented ad campaigns.

Those who have been reading Sexy Widget for a long time might remember that this is something that Bitty Browser was experimenting with a while back.

For the widget platforms, it's starting to approach the time to start making some money.  The technology and tools have been brought to market, the data centers have been built out, and these companies have proven that they can give their services away.

Over the coming weeks and months, I expect to see more announcements from companies like Clearspring, Widgetbox, Musestorm, and Gigya regarding how they intend to monetize their footprints.

In addition to the ability to keep the revenue associated with your app's pages, Facebook offers a great opportunity for interactive apps to capture massive amounts of user generated content - ratings, reviews, preferences, tastes, video, graffiti, etc.

My employer, RateItAll, is starting to see some nice traction and high interaction rates with its Facebook consumer review app.  PVs per visit are nearly three times what we see on our destination site.  This interaction is generating plenty of content which is simultaneously being published on the RateItAll.com destination site.

That's the good news.

The bad news is that the quality of the content is noticeably less useful than reviews posted to RateItAll's destination site.  For example, check out the recent reviews of Kellog's Frosted Flakes or Mark Zuckerberg.  The user names beginning with "FB" are from Facebook.

The issue of culture should not be a new one to anyone involved in administering a social media site.  Why is it that the regulars on some forums are nasty and combative, while the regulars on others are helpful and welcoming?  Why are the reviews on Yelp clever and hip, while the reviews on Epinions are thorough and dry?  It's about culture.  And culture is something that is more easily steered on a destination site than on a distributed app.

As we enter the age of distributed apps powered by platforms, APIs, and widgets, I expect that this issue of how to influence the behavior of your app's users - even when you don't control the host environment - to become a hot topic.

The news is coming fast and furious on Open Social.  I think Mike Arrington puts it best with:

Suddenly, within just the last couple of days, the entire social networking world has announced that they are ganging up to take on Facebook, and Google is their Quarterback in the big game.

I can't believe how quickly this all came together.  Apps that have built on a single DB on Facebook must be drooling at the chance to provide a unified, cross property experience.

Are widgets even relevant any more in this app dominated landscape, or are they just a quaint precursor to the virality and functionality enabled by API powered applications?

Webware is reporting that MySpace may join the Open Social project.

It's odd behavior for a sector's largest member to embrace open standards, don't you think?  Why might they do this?  Maybe it's because they need help.  Maybe it's because it's a chance to pile on Facebook.  Maybe because it's an opportunity to grab some quick buzz.  And maybe it's because, numbers be damned, MySpace considers Facebook the leader in the space.