Making money from Facebook
(by a guest writer, March 31st, 2008)
Facebook has quickly become one of the leaders in the Social Networking
space and, some predict, will soon
overtake MySpace. It gets 150,000 new users a day. Facebook's success provides plenty of opportunities for canny
entrepreneurs to profit, this page is going to point you to these. It's a long
page but, think, you've just saved $39.99 on an ebook :-)
Face book Applications
It is possible to make millions with
(or "apps"). No, this is not the usual hype
you see on the 'net. No, it's not a pitch for an ebook. Or a "marketing
secrets" newsletter. We'll shortly describe a real-life example, complete with names and
details, of a canny entrepreneur with a simple idea that's been tried
and tested to $1,000,000 per week and could work for anyone who has
a bit of imagination and a go-get-'em spirit. Prepare for a WOW! moment in a moment.
First, what's a Facebook application and how do you get one? If you aren't
already familiar with this, the
Developers' section provides all of the information and tools needed
to get going. Quite simply, an app is a program that interacts with the
Facebook site and enhances users' experience of Facebook, or provides
other functionality. Users add apps to their profile voluntarily and
can always "unsubscribe" at any time.
There's even a
fund to pay you to get started building apps! And there are several ways to make
money from an app, for example:
Money for selling an app:
One needs either the skills to develop an application or the money to hire someone to do
it. That's the downside. That's the only downside. Once an
application acquires a large number of regular users, developers find there is an
established market for buying and selling "apps". Try AppMrkt,
Sitepoint even eBay
several smaller players.
Rates range anywhere from $1 to $10 per "active" user (it's not just about
signing them up but designing the app to be addictive), but that's a very
general rule and many fall outside those prices.
Direct ad sales:
There is the option, of course, of direct ad sales. Direct selling on popular applications
is definitely an avenue to explore before the exit route "lump sum".
It doesn't take a great deal of mental effort or original thinking to come
up with the idea of selling ad space. But then it doesn't pay that much
either. Rates are pitifully low and ad blindness is high in Facebook;
people generally ignore ads.
Money for generating installs:
Selling an application and selling ads on it are far from only way of profiting, others are even more profitable.
Some of the larger applications charge for installs - pay per click Web
2.0 style! - and a new application can pay established app owners to
assist them "acquire customers".
This potentially delivers a few hundred thousand user installs of the new
app in a matter of days. Rinsed and repeated Pay Per Install
can generate a substantial revenue stream.
With all Facebook App monetising methods what's very much the core is the
strategy of getting
big first before expecting the big bucks... or any bucks at all. And
getting big is not the preserve of multi million dollar companies, as we'll
Some say that
not all apps are a quick route to millions. There'll be many who claim
that apps are
impossibly difficult to monetise, particularly as Facebook doesn't allow
those advertising networks and affiliate programs approved by Facebook. We like to think
that the real truth is slightly different: Not all app owners
have worked out a quick way to reap huge profits from their app. Yet.
So what is the best way of monetising an app?
So what's the killer idea? It involves using a little ingenuity and here's
an example of an implementation; an example of a company that made a
million a week with a really simple strategy.
Impossible? Not at all.
The idea is best demonstrated by the first three minutes of this youtube
video. Watch it. Seriously, watch it!
(The speaker has
this to say about it on his own site)
Here's a summary for those who can't access that video. Note: Spoiler ahead
- look away now if you don't want to know what's in the video.
The video explains how a facebook app associated
itself with a popular charity and offered to pay the charity $150 for
every 1,000 Facebook users who signed up. Sounds very altruistic till you
realise there's a toolbar involved and a CPA - cost per action - program,
and the company makes $0.80 -$1.00 per download. 1.5 million people
downloaded that toolbar in a week. In a week. That's what?
$1000-$150 or $850 per thousand users and 1.275 million dollars in a week.
Here are Jason Bailey's
Not impressed? Want something even simpler? Here's a completely different
angle (again involving CPA):
Video 2 showing how driving users to fill in a survey can result in a 5%
takeup at $1.00-$1.50 per survey form filled. In this example, a campaign
on 100,000 users resulted in 5,500 "responding". At conservative values, that's
$5,500 in .... a day! Spot the flaw? Yes, that's gross profit.
Driving the 100,000 visitors costs money that the video doesn't mention.
However, users can be had for $0.03 each, or less. That takes a big chunk
out of the profit but - at $2,500 a day still left - that hands free, self-running,
auto-pilot campaign is generating profits at an annualised rate of One
How can YOU profit from Facebook applications?
What makes for a good Facebook Application? (Image courtesy: O'Reilly RADAR; only part of their report
is available free). When the FB platform debuted, the emphasis was on
getting a large user base. Since then, the focus has moved to having
"active" users, people who engage with the application regularly. Four
tips to making your app less of a dice roll and more of a Top App in Facebook:
1. Forget selling. Don't try to sell anything. Think like a social
networker. Live in the world, play the game, install other Facebook Apps,
get a feel for what FAs get traction and what FAs fall by the wayside.
Think about how you can help users enjoy their Facebook experience more.
2. Get inspired. At the end of the day, it's about the explosive idea,
about something that will go
viral, something that's exciting, infectious,
interesting, novel, social, cool, engaging, addictive ... or buy
somebody else's idea. Tip: Post some ads/threads in webmaster and
developer forums to attract ideas; great developers aren't always great
entrepreneurs and they'd be wise to partner with you.
3. Once you've got/bought an idea or bought an application you can do
deals with people who have large installed user bases to attract them to
try your app, if not
RockYou and Slide,
there are smaller firms always looking to do deals.
4. Users were finding a large number of invites to apps spammy (and
rightly so). Facebook therefore moved to restrict the number of invites
people could send and restrict - in a way - the viral spread of an
application. So you need to think outside the box. Network with the
Facebook developer community. Explore banner exchanges like
At the time of writing, the number of Facebook Applications listed in
is in the tens of thousands. When will yours be there? More
importantly, when will yours be making money there?
Lack the killer idea?
No, you don't. You're just waiting for the right one to come along. Get
familiar with the system and keep mulling it over when you're online, when
you're offline, when you're in the shower. In the meanwhile you can polish
your skills developing applications for others and, more importantly,
using a range of apps to get a feel for what makes them tick.
If you're a developer yourself,
businesses are looking for good app devs. Various job boards - and Facebook itself
- also have adverts for developers.
Selling unwanted items, or even affiliate products in the
Facebook's marketplace feature is much like
items are listed and viewed locally. While Craigslist suggests a physical
proximity, Facebook's marketplace is a more virtual locality - attracting
people of a common interest/group/background rather than a common
residence. Visibility of items can also be restricted to a user
Listing items in the
marketplace is free of charge and as a benefit, other users can also see
what you have for sale right from your profile, so you are kind of running
two advertisements for the same product. If looking to sell
affiliate products on a "wall" , "group", "page" or and elsewhere in FB,
Commission Junction and other
affiliate middlemen offer a choice of products, as do various independent
merchants running their own affiliate programs.
If you wish to leverage
the marketplace and have others sell products for you on commission, there
are applications around geared to that.
Some argue that
Facebook won't replace eBay or Craigslist as a trading platform. I
disagree but, thought: What if you had
something that would be of interest mainly to Facebook users rather than
the general public in eBay? What if you had something you could target
better in Facebook than elsewhere? Capitalise on Facebook's unique
advantages over the others. Get in now, at the beginning. If it does
become huge you could become the Facebook equivalent of the eBay pioneer
traders who hoovered up millions of dollars just by getting in early and
before the competition.
100 tools and tips to tap the Facebook userbase - an excellent
collection of many great (and some not so great) articles on Facebook.
How to sell yourself on the Facebook Marketplace
Operating a delivery service
...Or advertising an existing business. Facebook was originally
built as a meeting place for college students, and because of this their
service is still widely used around college campuses. College
students love nothing more than delivery, if you post a service that you
can offer in your local area, add your phone number and offer delivery,
you may just have a very lucrative business. Keep in mind this
doesn't have to be a traditional food delivery business, you could deliver
beer and cigarettes, or party supplies, or even offer to run around town
and pick up whatever they need and deliver it to them.
You don't have to restrict the service to students, of course. The
demographic targeting that Facebook allows is a very powerful tool,
particularly as you can fine-tune not just on location but on sex, age,
education level, employment and various other criteria.
Using the third party
applications designed to make money:
If you are an expert in a particular subject you can sell phone
consultancy services where people pay you for your time on the phone
talking to them. Install an application like
EtherT (homepage) in your profile and you can even set your own rates! Sell your
expertise, whatever it happens to be in. Nintendo games? Installing
Microsoft Exchange Server? Rustling up a delicious Thai Green Curry?
an expert in something, why not help someone on the phone, share your
knowledge and get paid for it?
There are applications out there to facilitate the acceptance of donations. Get rewarded
for all that good karma you've been handing out.
Providing a proxy service:
Many schools and offices block users
from accessing social networking sites like Facebook. Providing a proxy
service allowing users to bypass these blocks can generate a lot of
traffic and (expensive) bandwidth but can be offset with advertisements
and the sale of premium proxy services.
Wordtracker, a popular keyword research tool, shows that "proxy" was
the most searched for word in conjunction with Facebook. There are a lot
of people looking for "Facebook proxies".
We've got a whole section on proxies coming to this site soon. It
covers everything from the creation of proxy sites, to getting cheap
bandwidth, to the difficult task of successfully monetising proxies.
Finding a new job on Facebook:
OK, not a money making idea per se, but maybe the new job will make you
more than the old one did. Many companies are now accepting resumes from
interested employees on the Facebook platform. The best place to get
started looking for work is in the
Marketplace under the jobs category. There are usually many companies
actively recruiting and some even conduct
interviews right there on Facebook.
Some of the positions are for
work from home jobs.
Advertising on Facebook:
It's amazing how many professional
marketers are unaware of Facebook's potential for marketing. Very few
other places have so many people you can target so efficiently. Want just men
aged 30-35? Or women who studied at UCLA in 2001? Or under 30s who work
for IBM? No problem. Whatever you're selling the chances are that you can
use Facebook advertising to enormous gain.
Why not explore advertising
within applications? Or Facebook
social ads? And
Groups to engage with your customers and get your advertising message
Facebook and other social networks, with their huge user base, are
decimating ad revenue for local papers and magazines (example). Why bother with aggregators of local classifieds when you
can demographically target directly within Facebook? It's a no-brainer.
There are big bets riding on Facebook advertising being a major player.
Microsoft invested a quarter of a billion dollars and the redoubtable
some very convincing arguments why FB is going to take a big chuck out of
Adwords et al.
Free ads: Halfway down
this page is a list of ways you can get
free advertising on Facebook
here's another nice one).
Many involve spending time and building yourself some reputation within
Facebook. However, companies are finding they can outsource this work or
hire someone to do it in-house.
Other notable places talking about profiting from Facebook:
3 | 4
24 ways to market inside Facebook
Even if you don't have an established product and fulfillment network
it may be worth starting one now, one that is targeted to this new
medium and capitalising on its strengths. And do it while ads are still
relatively cheap (Facebook's
secret rate card) and while the competitors are still tweaking their Adwords campaigns!
A perfect product would be the rootgear example here -
beacon, a program where other sites like eBay allow Facebook users to
"share" their purchases and other interactions with their FB friends,
promises even more possibilities for the smart advertiser.
You could use Facebook to drive traffic in many different ways, it
could even serve as a means of Search Engine Optimisation. Here are
5 ways small businesses and small websites can benefit from Facebook.
Making money in Facebook takes a different mindset and we hope we've
set you on the right track. It's not as easy as falling off a chair but it
isn't rocket science, either. It's about the idea, about
tapping into the community spirit, and making it not look like an
One somewhat frivolous way of ascertaining how profitable a business
idea is likely to be is by counting the
ebooks out there promoting it. :-)
All the best of luck with Facebook. This isn't a blog but we'll publish
comments below. Tell us what you think by clicking the link in the grey
|Comments - Tell us
what YOU think!
What do you think of this article? Is it
possible to make money from Facebook? Is it over-hyped? Is it
ahead of its time? What's YOUR take?
holler2: March 31, 2008 cheers
mate that was great reading. facebook is a difficult place to make money and
you have provided some very interesting reading. surely something to explore
Stuart: March 31, 2008 I recommend
using Facebook to research your target audience. You can conduct
polls to get an idea of
what makes them tick, what they think of your product relative to your
competitors, what features they're looking for in their software....
The brilliant bit is that you can get answers to your market research in a
few minutes rather than the days it takes to employ an agency + get a focus
group together + compile the data.