Bringing Brands to the Facebook Platform: Buddy Media Offers Full Service Solutions

Buddy MediaContinuing our “Bringing Brands to the Facebook Platform” series, Inside Facebook today takes a look at New York-based Buddy Media. Originally known for its AceBucks loyalty program, Buddy Media has built its business as a full service solutions provider for agencies and media companies, helping them extend their campaigns and offerings into social media. The company also recently closed its Series A round of funding and launched the Buddy Media Ad Network. (Disclosure: Buddy Media is also an advertiser on this blog.)

We sat down with Michael Lazerow, Buddy Media’s CEO, to learn more about the company and how it’s working with brands to bring them into the Facebook Platform world.

Mike, tell us about your vision for Buddy Media.

We believe that the opening of the social networks gives anyone who cares about audience unprecedented access to users.  From 1994 all the way until 2004, in order to get distribution you had to go to AOL and pay millions of dollars to become an anchor tenant – and even then some of it wouldn’t work. Two groups of folks who care most about audience and distribution are media companies and brands, and we’re here to help them.

We’re taking a very full service approach. We don’t really like doing app development, but someone has to do it for these companies. We have a whole group in house who does rapid application development for them, and once the apps are built, we promote them on our own apps and other apps, wherever it makes sense.

So how do you create engagement around the apps you build for your clients?

acebucksThe business was founded on engagement and AceBucks, which is still an important part of what we do on the activation front. Our development platform, our ad network, and AceBucks are free programs that we also use to support our efforts to create distribution and engagement for brands. The loyalty program is an important long term part of that, even though it’s a small part of our revenues right now – brands are still spending more time on CPM/CPI now. We’re spending a lot of our time figuring out what engagement on social networks means. We think social media is different.

A big challenge developers face is communicating the value proposition to buyers. How do you do that?

We think that there’s a major shift going on from media centric buying to advertiser centric buying. In a media centric buy, you hear the inventory and you hear your rates and there are standards for media placement. The big shift in social media is the disintermediation of the media companies – how do brands take their communication plans and their marketing plans and make them live cost effectively in the social environment?

Our question is how can we help a brand succeed in the social media space, whether it’s tight integration of the values of the brand or a very tightly knit program that reinforces the benefits of the brand in a very highly engaging way. You’re not going to be able to create SuperPoke and get 2 million people a day using it, but with a very targeted approach you can create something that is going to engage your audience a lot more than a banner ad can.

It’s hard to know how to make sense of the inventory. We have 15 year olds, 50 year olds, massive churn, billions of impressions. Do you group it per user, group apps together, and how do you do it in a world where you can’t store the information from Facebook or MySpace for more than 24 hours? Tacoda was great because it paid publishers to build up a massive user database. It’s not easy in this space where there’s a lot of platform restrictions.

So how are you building out Buddy Media’s technology and sales efforts?

We’ve taken a very client centric approach and said it’s about what you should be doing to take advantage of the distribution. Frankly, it’s a very sales intensive business – right now we’re growing our team from 4 to 16 people worldwide.  I don’t think technology is the answer – you have to have a sales team and an account service team. There’ s a reason media companies have huge sales teams and get a lion’s share of the dollars – because it’s not easy.

At the same time, we’ve created a lot of great technology. We basically had to create a banking system for AceBucks. And we’ve created an ad network that lets you do things differently – you can buy installs, use different creative formats, and so A/S/L targeting.

You recently launched an ad network, but it’s not where you started. How does your ad network fit strategically?

Strategically, our ad network is a tool to use to fulfill campaigns that we sell.  Other folks take CPM deals and CPC deals and self serve deals where there’s a 10 cent CPM and the only people who make money is the ad network. We’re only bringing in more supply as demand warrants it.

I’d rather monetize 100 apps incredibly well than 2000 apps poorly. Being a remnant player in a world with infinite remnant inventory seems dangerous to me. If you can make a $.10 spread on 3 billion impressions, that’s $300k. But I know from my Golf.com days that there’s unlimited demand for premium inventory. And who knows what Facebook and MySpace are going to do. We want to be as open as possible to work together with folks.

In addition to working directly with agencies, you’ve also been working with media companies. Can you explain what you’ve been doing there?

The main way that we work with companies is through a solutions provider relationship. They have ad sales, they have content assets, andthey need someone to take those assets and socialize them.

One app we created (that’s no longer around) was the People.com Red Carpet Challenge, a fun game to get people to compete around the Oscars. People.com bundled it together and resold it to the Oscars, and we guaranteed a certain reach. We built it using a templated solution, so we’re now going to do the VMAs and Grammy’s as well.

hollywood hair makeoverWe also made a Hollywood Hair Makeover app for InStyle that was part of an overall marketing campaign for InStyle.com. It achieved 250k installs and users did millions of “hairstyle makeovers.” Women would do it and ask their friends if they should get the makeover.

Media companies see 2,000 people a day engaging, that’s 60k a month, they see that as a “social campaign” that they can sell in addition to the inside back cover. They can get wholesale distribution from us and resell it at much higher prices. Our average deal is a little over $100k, which is not a lot of money when you’re spending $4 million on a worldwide marketing campaign. Why wouldn’t you add social?

Our vision is that social media will be bolted onto every marketing campaign. If that happens, we’ll be in good shape. If not, we’ll need to figure out how to evolve.

Thanks a lot Michael. Any parting thoughts?

It’s early, and as an industry we all need to work together. We’re not at a stage yet where we’re selling against others. If you look at the amount of time being spent in social networks, if we can get an appropriate amount of money flowing into this space, there will be some big companies created.