Adonomics™ Facebook Analytics and Developer Services

To All Facebook App Developers:

SHORT MESSAGE:
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1. Don’t Sell Your Facebook App for any less than $1.00 Per User
2. Instead, Rent Your Facebook Users’ Attention for $1 to $10 Per User

LONG MESSAGE:
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Whether you have 1K, 10K, 100K, 1M, or 10M users for your Facebook apps, let me say congratulations on being an EARLY ADOPTER on the world’s FIRST SOCIAL OPERATING SYSTEM.

If you play your cards right, you will be in the same position as some of the VERY EARLY employees at Apple, Microsoft, Ebay, Amazon, Google and now Facebook. The key is to not sell your application or user bases too early. In the long run, facebook apps with active users will be valued at between $1.00 and $10.00 per year based on the numerous methods of monetization that are coming on board almost as I type.

So, if anyone is offering you less than $1.00 per user for you Facebook app today, PLEASE DON”T SELL TO THEM. In fact, if you feel you want to sell for that price (for whatever reason) please contact me. Although Altura Ventures would prefer that Facebook entrepreneurs retain their ownership stakes, if you are determined to sell for less than $1.00 per user then please contact Altura Ventures and let us add $1,000 to the lowball offer someone is giving you and you are about to take.

In addition, the Facebook Social Operating System is like God’s gift to software developers because never has the path from excellent software engineering and user interface design to mass consumer adoption and financial freedom been shorter. For almost the first time, one or two smart developers can create an app that flows directly onto the desktops of millions of connected consumers. These apps will end up controlling a piece of Profile Page App Box Real Estate and a Certain Number of Canvas Page Views. The number of these page views will be directly tied to the usefulness of your application. You should therefore think of this facebook screen real estate as your most valuable asset and the number of times it is viewed by users as the equivalent of traffic passing your property. The more traffic the more valuable the property.

Using the Oklahoma Land Grab analogy, it is your job to not just claim a piece of App Land as your own but cultivate your homestead and turn it into a farm or ranch that can generate wealth for generations to come. The way in which you will generate wealth in the near term is by RENTING (NOT SELLING) pieces of your App Land out to those who would like to erect billboards for all of your users that are constantly streaming by. These billboards will be rented out based on the traditional CPM, CPC and CPA models that have already worked in online advertising. However, each of these ad rates will be enhanced based on the DETAILED DEMOGRAPHIC knowledge that advertisers will be able to target due to Facebook’s incredibly rich and granular profiles and your app’s deep levels of engagement.

In addition, to the standard advertising models, there will be new ad models that are optimized for a Social Operating System. Due to the inventions that one of our portfolio companies is patenting, I can’t comment on these in detail, but suffice it to say that they will have as great an impact on traditional online advertising as Overture’s bid-based CPC system had on the then prevailing CPM model.

Another important point is to focus on apps and cultivate users that fit well into a given traditional brand advertiser’s sweet spot. As this group of professional marketers discovers facebook in the next 12 to 18 months, millions of dollars are going to be THROWN AT the apps that appeal to their key demographics. Think about this question: Which types of apps would Coke, Pepsi, Mountain Dew, Tide, Crest, Buick, Toyota, Ford, Chanel, Gap, Target, Mcdonalds, etc. most likely to align themselves with?

Is your app a candidate for a $250,000 to $500,000 per year ad sponsorship deal?

I’m sure that if you:

1. can coax 250,000 to 500,000 users to install your app,
2. can convince these users to come to your app’s canvas page a few times,
3. can create fucntionality that embraces the brand attributes and product messages of Ford, or Crest, or Coke , or whatever,
4. can keep the ad-enhanced, user experience from forcing users to remove your app because it feels too much like an intrusive ad, the hood of a Nascar racer or a DISTRACTING PRODUCT PLACEMENT in what would otherwise be a good movie

Then, I’m sure Microsoft’s Ad Sales force will be happy to find some BIG BRAND SPONSORS to pay you $1.00 per user to be your app’s sponsor for a month or a quarter or a year.

In fact, there is some chance that Microsoft will be a conduit to brand name advertisters/sponsors who have huge budgets and want to hire Facebook app developers to create killer apps for them. Remember that for every TV ad you see, there was at least a $500K budget spent to hire a director, actors, scriptwriters, etc. This $500K in creative plus a few million in ad budget is spent just to capture a 30 second intrusion into a few million consumers’ lives (assuming they don’t own TiVo and can avoid the intrusion). So, why shouldn’t there be $500K going to the best Facebook app developers who can create an app to engage a targetted demographic.

Microsoft has the advertising sales team and necessary experience in how to work with developers to be a matchmaker in this process. Their fee for landing you a $500K ad/app development deal might only be 20% to 30%. This leaves plenty of money for you to deliver the GREAT SPONSORSHIP APP (with a hefty profit margin) and then to make another $250K to $500K when you slide this ad-enhanced experience into your existing application’s profile page app box and canvas pages.

Enough said for now. I hope I’ve convinced you not to sell your app too soon but to simply rent your app’s real estate out to an ad partner like Microsoft or an Altura Ventures company that will be announced shortly.

Thanks,
Lee Lorenzen
CEO, Altura Ventures
831-595-7501

(c) 2007 Altura Ventures LLC