Industry Perspectives: Q&A with Sometrics CEO Ian Swanson

As we continue our look at the Facebook Platform monetization ecosystem, today we turn our attention to Sometrics, a social analytics and monetization platform that helps developers optimize across advertising and offer networks. We recently spoke with Sometrics CEO Ian Swanson about his view of the monetization landscape on the Facebook Platform and Sometrics’ approach to the market.

Inside Facebook: Thanks for your time, Ian. Can you start by giving our readers some background on how Sometrics began?

Ian Swanson: Our business started as an advertising solution for banner advertisements. In June 2008, we started talking to publishers on MySpace and found out that the majority of revenue, 95 percent, was coming from direct payments and offers, and only five percent was coming from banner ads. We asked: Can we target offers and optimize offer networks? And so we started building a solution by the end of July 2008, ran the first test of users in December, and launched a beta version in March.

Who are the main players in your business?

At the bottom of the chain are the 2,200 publishers, or game developers, who we work with. Above them come a dozen offer networks such as Gambit, Super Rewards, Offerpal, PayByCash, etc. Then come the 2,400 different advertisers. Sometrics works directly with publishers to help them optimize across dozens of offer networks. We’ve built a few products, many of which are free. Developers on Facebook, MySpace, and large multiplayer games use our products.

What process does Sometrics go through to optimize across offer networks?

We work directly with publishers. Say the publisher comes to us with four different offer networks – we help them optimize across them. We plug in the codes that these offer networks provide, and our system outputs one optimization code. Using our central dashboard, the publisher can make changes that affect revenue growth. Our dashboard truly affects revenues: our publishers have seen a 10 to 15 percent revenue lift.

What are some demographic trends that you’ve noticed across different online platforms?

It’s well known that the demographic on MySpace is younger, and we tend to see more completions on MySpace. With Facebook, we see more paying completions (e.g., Netflix). There are more offer completions on MySpace, but each completion has a lesser payout; thus, higher conversion rates on Facebook have greater value.

How will Facebook’s entry into virtual currency affect your company?

It’s a smart move by Facebook and good for the economy as it will bring more validation. We look at Facebook as one method of payment. There will still be a need for solutions like Sometrics that manage different payment solutions. For example, developers can use our services to get central statistics on how any payment method is working.

What’s your competition looking like in today’s market, and what’s the business opportunity abroad?

No one is doing offer optimization for third parties. In terms of offer management, a lot of companies are still trying to directly compete with offer networks. The international market is thriving, it’s big. Korea has a multi-billion dollar industry. In China, social networking sites have adapted much sooner to a virtual currency system, and the results have been tremendous.

Thanks again, Ian. Any final thoughts?

Our standpoint is that it’s important to have a diversification of offer networks if publishers are using offers as a way to make money. Our solution proves that it’s advantageous to use multiple offer networks. We have the numbers to back it up.

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