Google's Foray Into Facebook Advertising

For the past few months Google has been filling ad inventory on Facebook applications and according to individuals on the team behind the ad sales, things have been going well. When Facebook launched their platform last year, a whole slew of new startups emerged around the social advertising space. Companies like SocialMedia, Cubics (later acquired by Adknowledge),, Lookery, and others each fought for a piece of the social advertising pie. Small startups are rapidly finding that it’s not a good place to play though.

Scott Rafer of Lookery says that they sold their ad network “specifically because the social ad space has become a poor place for startups to compete.” It’s not surprising considering larger, more mature companies have been entering the space for months now. Back in June Platform-A announced that they’d begun selling advertising on social networks. This is around the time that I began hearing about Google running test advertisements on Facebook.

I’ve since confirmed that the advertisements have been running across multiple applications including Where I’ve Been and Playfish’s large network of social games. Rather than using the traditional Adsense model, Google has been assigning sales teams to fill large application inventory. It’s not hard for a company like Google to do well in a space know for its penny CPMs. Sebastien de Halleux, COO of Playfish, told AllFacebook that they chose Google because they needed “an advertising partner with a global presence and the ability to scale on the sale side”.

In regards to Google’s entry onto the Facebook platform, Matt McAllister of Offerpal Media (also a sponsor of this blog) says “welcome to the party.” Offerpal Media as well as Super Rewards, have been using incentivized offers to monetize Facebook applications. These companies are behind some of the most profitable applications on Facebook including Mob Wars which is supposedly the million dollar a month Facebook application.

It’s clear that large networks are going to continue entering the social advertising space on a selective basis while the less popular applications will continue to scrape the bottom of the barrel when it comes to CPMs (cost per thousand impressions). The real question that everybody is wondering is when is Facebook going to start helping applications get a piece the Facebook advertising dollars?