Monetizing Facebook applications effectively seems to be the holy grail: While it is easy to put CPM or CPC ads onto an application and start earning some money, maximizing the revenues and tapping the full revenue potential of a successful application is definitely not trivial. With typical CPMs of $0.5 to $2 per 1000 impressions and typical per click earnings of $0.05 to $0.10 at CTRs (Click through rates ) of less than 1%, typical earnings end up being around $10 per 1000 Daily Active Users (DAU), which is very low.

We recently did a presentation at BarCamp Delhi, where we presented a few cases where some applications have been able to go far beyond these earning figures. One such application is iLike, which has created a huge community of users on Facebook around their interest in Music. iLike has successfully monetized on Facebook using ticket and music sale referrals.

Another application which has successfully monetized is MobWars, which has created a interesting and engaging virtual economy built around crime. When people run out of money on this economy, they can buy credits using actual money, or by taking actions according to CPA advertisements on MobWars.

Creating strong user engagement seems to be the key to creating effectively monetizable Facebook applications. An application that can tie the mode of engagement with methods of monetization can potentially earn a lot of money on Facebook.

This entry was posted on Monday, November 3rd, 2008 at 4:26 am and is filed under SEO, Social Media. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.