Industry Perspectives: Q&A with Peanut Labs COO Ali Moiz

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As we continue our in depth look at leaders the Facebook Platform monetization ecosystem, today we turn our attention to Peanut Labs Media, a monetization service for social networks, apps, and games that’s focused on market research and virtual currency. In addition to CPA offers, Peanut Labs has devoted significant effort to building its market research business, which provides high volumes of anonymized data to large brands.

We recently spoke with Peanut Labs COO Ali Moiz about the opportunities he sees inside Facebook apps and games, and the approach his company is taking to the market.

Inside Facebook: Ali, how did Peanut Labs get started?

ali-moiz-headshotAli Moiz: I used to run a gaming company before Peanut Labs called Xuqa.com. We had a couple million users playing flash games. As we were figuring out how to monetize games and introduce virtual currency, we came across surveys by accident.

Four years ago, we learned that monetizing via virtual currency was an underserved market; no one else was really in the space.  We raised money, and the business did really well. It took off organically: we sold off our gaming business and became Peanut Labs through trial and error and a lot of experimentation.

We think of ourselves as an agency rather than a network. We are an advertising and research agency focused on getting and distributing online market research, working with Fortune 500 brands and 25 of the 50 largest research agencies in the world, including Nielson, comScore, and Ipsos.

What’s the business opportunity in online market research?

Advertising alone doesn’t cut it for a lot of companies. Our problem statement is how to enable gaming companies, blogs, social networks, etc. to make more money through advertising and research. The value proposition is simple: we have clients that want research done; by placing incentive-based advertisements on applications, social networks, blogs, and online games, we convert time into money. Users can generate value by giving up some time. Typically, on most free to play games, 90 percent of users play for free in that they don’t pay or convert. We focus on this 90 percent of free users.

We source research deals directly. Most of our inventory is exclusive to us. We bridge a gap: we work with publishing partners on one end (Acclaim, Real World, Zynga) and bridge their users with exclusive inventory that we’ve sourced from our clients (Fortune 500 companies and research agencies).

We close multimillion dollar, multiyear deals around research and advertising that are exclusive to us. Our relationship with French research agency Ipsos is an example of a multimillion dollar partnership, where Ipsos can find and access young people through Peanut Labs.

Who are the key players you deal with in your business operations, and what’s your transaction model?

Say a user is playing an MMO game from Acclaim (Peanut Labs and Acclaim just entered into an exclusive partnership). The user runs out of virtual currency, but wants to upgrade his character to kill more monsters. 10 percent of users will purchase virtual currency using a credit card, while the other 90 percent will take an anonymous survey with questions from our research clients, earning their virtual currency in five to 10 minutes. Our client pays us, and we pay our publishing partner based on volume and audience. For example, the North American audience is more valuable than the audiences in Russia and Africa because there’s more disposable income in North America. Our revenue share is usually 10 to 30 percent, and the rest goes to publishing partners.

So, there are so many methods of online advertising these days. How does online market research fit into the picture?