Brij Singh's Blog

July 21, 2008

Facebook app for iPhone (243,482 daily active users, 45%). Big implications for ad networks?

Filed under: Tech — Brij @ 3:57 pm

In another example of how mobile-app-can-wreak-havoc-with-your-business-model, check the usage statistics of Facebook For iPhone.

There are 243,482 daily active users representing 45% of total. These are high numbers. It's fair to say that 243,482 iPhone owners are now using Facebook for their social networking experience.

Now compare the use % for applications which are higher on the leader board -

High active user number for iPhone application has serious implications for several Facebook developers. Especially Social Media, Lookery . These distributed ad platforms need to come up with a model similar to PinchMedia.

Now iPhone users are affluent (or maybe crazy!), spend more time online, and fall into compelling demographics. Ideal for ad targeting. Challenge lies in developing a new ad serving model which can exist within the constraints of App Store. Eventually acceptable format will show up but in the meantime iPhone will further damage monetizability of social networks.

Also every  user access Facebook from iPhone means one less ad impression on In Facebook case ad is served by Microsoft. We can generalize this reduction in ad impression across all mobile social network apps.  That cool and  'clean interface' constraint of iPhone app is a natural ad blocker.

Keep an eye on 'active user' count for mobile social networking apps.  It's a leading indicator of how disruptive mobile apps will be.

Update: Just to add important data point here. Erik Schonfeld, over at TechCrunch, reports that Lookery is lowering guaranteed CPM to 7.5 cents. As I pointed out yesterday that meta social network ad plays will have to adjust their business model. This sums up best:

Lookery is hoping all of those pennies will add up, but it isn’t counting on it. CEO Scott Rafer says the ad network is running at break even in terms of gross profits. But his plan is to use it to “bootstrap a data services business.”

In other words its back to basics now.

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