Facebook Starts Alpha Testing In-House Platform Ad Network

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Facebook focused on Platform growth over Platform monetization in 2008: the company largely focused on launching the profile redesign and Facebook Connect instead of other monetization initiatives.

However, it looks like 2009 may be the year Facebook starts ramping up its monetization efforts: today, Facebook announced that it has started testing an in-house ad network with developers.

According to the company,

Starting today you may notice a few applications occasionally serving Facebook Ads directly in their canvas pages as a part of a small alpha test. We will use the results of this test and other tests that we do to determine the best ways we can help you monetize. For this initial test we picked a few developers that had a variety of different user bases and application types to give us the kind of data we need. We will examine the results to decide whether to open up the program to more developers in the future.

The move has been expected for some time by companies that have built large advertising networks within the Facebook Platform ecosystem. Companies like SocialMedia, RockYou, AdParlor, AOL’s Advertising.com, SocialCash, Sometrics, Adknowledge, Rubicon Project, VideoEgg, Google’s AdSense, and other ad networks have been serving app developers since the Platform launched. Others, like Super Rewards and Offerpal, manage networks of offers for developers which generally pay on a CPA basis.

How has performance fared? While some direct and integrated deals can go for anywhere from $5 to $20 CPMs, most developers have been reporting between $0.10 to $0.50 CPMs on most Facebook Platform remnant inventory (with European prices being generally slightly higher). And several developers have reported very high eCPMs by integrating offers into their apps and games.

While it’s too early to tell exactly how Facebook’s ad network efforts will fare – and affect other players in the space – rest assured everyone will be watching the alpha test closely. As the Platform on which all apps and monetization efforts run, Facebook faces the challenge of helping developers monetize directly while still cultivating a robust monetization ecosystem for third parties. We’ll have more as the alpha test progresses in the coming weeks.