Fighting the common wisdom that it's tough to make money off a social-network application, AOL announced Monday that it will guarantee CPM revenues to developers on Facebook and Bebo's platforms if they opt to use its Platform-A ad technology. If a developer pulls in three unique ad impressions, AOL will pay an undisclosed flat fee.
"Advertiser interest in social networks is rising at a steady rate, and Platform-A is making an unprecedented flat-fee commitment to help application developers generate revenue and guarantee monetization of their applications," Dave Jacobs, Platform-A's senior vice president of publisher services, said in a release. "Platform-A views social-networking applications as an area where we can add significant value by letting developers focus on expanding their install base, without worrying about monetization of applications."
For AOL, it's a way to get a leg up on the dozens of small- and medium-size ad networks, not to mention Google's AdSense, that are catering to social-network platform developers, specifically those building on Facebook. The new guarantee is part of Widgnet, a developer-focused niche of AOL's Advertising.com, where the company says that "widgets are transformed from clever little applications into hard-working revenue generators."
There are so many options for application ads, and so few genuine success stories, that offering guaranteed CPMs to developers may be an effective incentive, at least at first. But the developer community is notoriously tight-knit, and if Platform-A offer doesn't reliably lead to more money from applications, word would spread quickly and developers could jump ship.
Currently, the deal extends only to U.S. visitors to U.S.-based applications on Facebook and Bebo, which AOL purchased this spring and which has an application portability deal with Facebook. The program will ideally be expanded to Europe later this summer, and potentially to other developer platforms in the future.