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Slide 1: Bling Bling: Marketing and Monetizing Through Social August 2008 Applications
Slide 2: Common Perceptions of Social Media “You can’t make material money through social media” “You can’t effectively promote yourself on social media” 2
Slide 3: What is RockYou? Our mission is to engage the world with social applications RockYou has massive reach and scale, 6x larger than its next largest competitor, and the opportunity for growth is only beginning. Social Applications • Largest social application provider on the web (FB, MySpace, Hi5, Bebo, Orkut) 1.5B+ PVs per month 60M+ monthly unique visitors global • Social Media Ad Network Leading ad network for social media (FB, MySpace) 9B+ impressions per month 90M monthly unique visitors global • Social Gaming Provider Leading social games (pets, autos, poke) 700M PVs per month • • • • • 3
Slide 4: A Dominant Facebook Presence and Growing RockYou has over a dozen applications with over 1 million users – below are some of the largest: Application Total Facebook Users 38M 22M 20M 13M 7M 7M 5M 5M 4M 4 Monthly Active Users 18.6M 4.0M 5.2M 4.3M 3.3M 0.3M 1.0M 1.2M 0.3M Super Wall Hug Me Likeness Pieces of Flair Birthday Cards Horoscopes Likeness Unrated Speed Racing PetrolHead
Slide 5: Social Media Introduction
Slide 6: Examples of Social Media  Multimedia – Photo-sharing: Flickr – Video-sharing: YouTube – Audio-sharing: imeem  Entertainment – Virtual Worlds: Second Life – Online Gaming: World of Warcraft  News/Opinion – Social news: Digg, Reddit – Reviews: Yelp, epinions  Communication – Microblogs: Twitter, Pownce – Events: Evite – Social Networking Services: Facebook, LinkedIn, MySpace 6
Slide 7: Who Are The Major Players? More To Come…  Social Networking Websites: – MySpace – Facebook – Hi5 – Orkut – Bebo – Friendster – LinkedIn 7
Slide 8: Le Distribution Géographique 8
Slide 9: How Much Has The Market Been Tapped? Explosive growth… …But still a long way to go 9
Slide 10: What Are Social Networks Used For? 10
Slide 11: Monetization Opportunities with Social Applications
Slide 12: Online Advertising Growing Social Advertising Growing 3x Faster Global Online Media Advertising ($Bn) $61 % 22 R: G $45 CA Global Social Networking Advertising ($MM) $3,559 $52 % 65 : R G $2,145 A $2,883 $36 $27 C $1,225 $480 2006 Source: eMarketer 2007 2008 2009 2010 2006 2007 2008 2009 2010 12
Slide 13: Context is the key to social media monetization High context High virality Apps add context to social networks. Social Applications Social apps are viral Lower context High virality High context Low virality Search is not viral Low context from photo browsing Contextual targeting Virality / Hyper-targeting 13
Slide 14: Monetizing Social Media  Application Cross-promotion – CPI (Cost per Installation), CPC = $0.30-$0.50 – Select Customers:  Agency-sourced Branded Advertising – CPM (Cost per Impression) = $2.00 - $10.00 – Type of Ads Using CPM: Branded Ads, Takeovers, App Integration – Select Customers:  Direct Response and Lead Generation – CPA (Cost per Action) – Type of Ads Using CPA: Mobile Offering, Education, Finance – Select Customers:  Virtual Goods, Micro-transactions & Subscription 14
Slide 15: Application Cross-Promotion Publishers place ad units to standard formats. Advertisers pay on a CPI, CPC or CPM (cost per install) basis. New FB profile helps on IAB standards. 646x60 => 728x90 300x250 15
Slide 16: Application Cross-Promotion  3rd party ad networks on Facebook, MySpace serve as the foundation of both promotion and revenue generation for most social applications – RockYou – Socialmedia – Lookery  Revenue from ad networks ranges from $0.10 - $1.50 eCPM  RockYou’s app pages range from $0.40 to $1.50 eCPM  Largest individual publishers on RockYou network generate $20K to $100K a month  Actively optimizing ad network ad inventory can multiply revenue – RockYou.com eCPM increased from $0.20 to $0.85 in 3 months  Services like Rubicon Project and Pubmatic can automate ad network inventory optimization – Pubmatic generating $0.50 eCPMs for one RockYou app 16
Slide 17: Agency-Sourced Branded Advertising 17
Slide 18: Agency-Sourced Branded Advertising  Direct selling is required - limiting scope of potential advertising partners – Facebook, MySpace, Linkedin – RockYou, Slide, Zynga, SGN  Many other developers work with ad rep companies to help source agency relationships – Alloy Media & Marketing – Clearspring – Appsavvy  Agencies are looking for new, materially impactful experiences for their clients (same as the regular web) – Application takeovers – Niche demographic reach or custom content – Performance  Productize the offerings of your application/site  Agency-sourced campaigns range from $30K to $150K spend  International brand marketing can be significant  Internal resources are needed to support agency work – Ad operations & reporting 18
Slide 19: Lead Generation, Direct Response  Lead generation, DR and performance marketing currently makes up a significant volume of advertising on social media  Leverage affiliate network providers at first (best offers w/ best payouts) – Affinity Labs – MyOfferPal – Neverblue Ads  Vet opportunities based on demographic mix of the application/site – increased context  Successful lead gen/direct response campaigns on social media include: – Mobile offers (SendMe, Thumbplay) – Dating (True, eHarmony, Match, SinglesNet) – Education (UPheonix)  Given unlimited funding for lead gen, effective way to fill remnant inventory at higher CPMs  Be prepared to process multiple lead gen offers to maximize performance – 10s to 100s  Lead generation campaigns may burn through quickly; active management and tracking is required 19
Slide 20: Virtual Currency  Fastest growing segment of social media monetization  New services allow transactions for youth demographic (13-21)  Virtual currency monetization providers are key – – – – OfferPal Media (alternative payments) SuperRewards (alternative payments) SpareChange (microtransactions) Echovox, Mobillcash (mobile) Top MySpace Game Apps (after 2-3 months live) Mobsters 10M users 8M users Own Your Friends! Mafia Wars 8M users SuperPets 3M users  For a high volume app (1M uniques+ a month), revenue generated ranges from $100K - $1M per month Texas Holdem 3M users Heroes 2M users 20
Slide 21: Successful Marketing on Social Media: Social Applications
Slide 22: Why? Potential for Social Apps is Exploding 2005 1 2 3 4 5 6 7 8 9 10 (U.K.) 1 2 3 4 5 6 7 8 9 10 Wikipedia.org 2008 Alexa Global Traffic Rankings 22
Slide 23: Viral Marketing and Engagement is key to success 50 Registered Users (MM) 40 30 20 10 0 1 3 5 7 9 11 13 (1) (2) 15 17 19 21 23 Months Source: eBay Investor Presentation, RockYou (1) eBay starts Q2 98, PayPal starts Q1’00, Yahoo! starts Q1’95, AOL starts Q1’92, Facebook starts Q4’04, and RockYou Starts Q4’05 (2) Facebook data represents active users, which was disclosed on 12/05 and 12/06. Undisclosed active user data is extrapolated by applying an average active user penetration to global Unique Visitors (per comScore Media Metrix) 23
Slide 24: Key Takeaways for Initial Viral Growth  New User focus  Simplicity  Novelty  Universal Applicability 24
Slide 25: Building Viral Engagement 1. New users => build clean flows • New users absolutely key to viral engagement (vs returning user) • Focus on linear, one-action flows to maximize activation for new users • Forget registration 2. Direct friends => deliver clear value prop • Provide clear value proposition to new user for inviting User Direct Friends Indirect Friends friend network (Likeness) • Ensure invitation is inherent to the new user flow to maximize viral value of user (Superlatives vs Superlatives) 3. Indirect friends => focus on messaging • Focus on messaging to invite/notification receivers to drive CTRs and more efficient/effective invitations/notifications • Deliver increasing AND simply understood value to app w/ every friend invited (Zombies) Interested Parties 4. Interested parties => allow universal use • Enable simple tools (comments, ratings, answers) that allow interaction w/o requiring full engagement w/ application (My Questions) 25
Slide 26: Marketing Opportunities with Social Applications Successful marketing for social media should include social applications: 1. Application content integration – Integrating brand or product as part of user experience – Example: Likeness quiz, virtual gifts, greeting cards, virtual actions, etc 2. Sponsorships or branding of applications – App takeover or skinning w/ possible promotion – Example: Skin application w/ sweepstakes or contest 3. Custom social application building & distribution – Build a social app for advertiser and/or distribute it through social network specific ad networks – Example: Build, viral tune, launch, and seed an app recruiting users from RockYou’s leading ad network jumpstarting viral spread of app 4. Rich Media 26
Slide 27: Application Integration: Custom Advertiser Quiz 646x90 banner clicks through to advertiser’s website Text link clicks through to advertiser’s website Custom size pop-up w/ additional info appears upon mouse rollover on relevant quiz choice 27
Slide 28: Application Integration: Custom Advertiser Quiz Advertiser’s quiz featured and cycled through Brand New Quiz placement throughout duration of campaign Advertiser’s quiz promoted on Available Quizzes section throughout duration of campaign (100% SOV) 28
Slide 29: Application Integration: Viral Impact & Spread Profile box An advertiser’s custom Likeness quiz virally spreads through the a social network platform’s communication channels. News Feed Mini-News Feed on Profile pages Email Message Notifications 29
Slide 30: Application Integration: Sweeney Todd 65x better 0.01% CTR for banner alone 0.65% CTR with integration 30
Slide 31: Application Integration – SuperWall Card Featured two custom-designed greeting cards on SuperWall for StepBrothers Greeting cards in top placement, pre-selected, and expansion upon roll-over Card appears in user’s profile Results: • 8M impressions on application pages • 6M cards sent • Immeasurable viral impressions through association of content to friend and his/her network 31
Slide 32: Application Sponsorship Applications can be skinned or branded with prominent placement for an advertiser with additional opportunities for sweepstakes, contests, streaming video units, and other custom programs. 32
Slide 33: Application Sponsorship Resident Evil: Extinction sponsored the popular Zombies app for 3 weeks leading up to the theatrical release and users could enter the sweepstakes to win a weekend trip to Vegas by ‘biting’ their friends. 100x goal 1M achieved 10K expected Contest Registrations 33
Slide 34: Application Integration & Application Takeovers Click-Through Rate 30% 0.13% 0.004% Social Networks (1) 0.20% 0.28% Web (1) Average RockYou Ads Best RockYou Ad Campaigns (1) Business Week (2/7/2008) 34
Slide 35: Application Development and Promotion Some rules of thumb from Context Optional.  Frictionless: simple, less is more  Audience: on Facebook for their friends  Communication: integrate into the viral channels  Engagement: hook users to return regularly  Business model: design with monetization in mind  Objective: establish goals and success metrics  Obvious: make each page’s purpose clear  Keep working: develop, test, repeat 35
Slide 36: Application Development and Promotion Over two months since launch, over 250K users have sent over 2M branded pokes generating tens of millions of branded impressions. 36
Slide 37: Application Development and Promotion  3rd party ad networks on Facebook can radically accelerate Facebook application adoption – RockYou – SocialMedia – Lookery  From RockYou’s experience, advertisers can generate between 1000 – 20,000 installs/users a day  Cost ranges from $0.10 - $0.30 CPC and $0.15 - $0.60 CPI  Viral tuning is key to taking advantage of paid campaigns – 2x to 10x impact  Behavioral and interest based ad targeting forthcoming 37
Slide 38: Application Development and Promotion Acuvue adjusted viral flow of Wink application and promoted the application on RockYou network— 200 installs grew to 150K users within a month. 646x60 Ad 38
Slide 39: Application Development and Promotion Stylefeeder.com is successfully driving website traffic through marketing of a social application mirroring site functionality  Stylefeeder is the largest fashion/shopping Application on Facebook with over 1MM installs  StyleFeeder able to convert double digit percentage of Facebook users into StyleFeeder.com users  Based on high conversion, Stylefeeder drives app installs from RockYou to StyleFeeder app 39
Slide 40: Application Development and Promotion  Consider potential throughput of the ad network  Quality of ads => Requires constant tuning to maintain high CTR  Ad copy => Make it actionable and personally identifiable  Viral tuning => Work with a team that knows viral engagement/growth  Successful applications require ongoing investment 40
Slide 41: Rich Media on Social Applications 2x interaction rate, 2x activity rate 41
Slide 42: Who is RockYou?
Slide 43: Who is RockYou? Our mission is to engage the world with social applications Most popular applications/widgets across Facebook, hi5, Bebo, Orkut and MySpace Over 700K RockYou apps installed daily and over 100 million apps live across social networks Over 16 million registered users Over 90 million monthly unique visitors across RockYou network Over 1B pageviews a month on RockYou apps and 6 billion pageviews per month across our ad network 43 100M 16M 700k 90M 6B
Slide 44: Most Million User Applications across Social Networks 44
Slide 45: Opportunities with RockYou  Leverage RockYou’s massive outreach in social media (90M uniques, 6B PVs) for Coke product placements and media  Build integrated campaigns on RockYou’s top applications on Facebook and MySpace – – – – – – – Superwall (30M users, 20M monthly uniques) Likeness (20M, 5M) HugMe (15M, 4M) Pieces of Flair (8M, 4M) Speed Racing (6M, 2M) Birthdays (8M, 1M) SuperPets (2M, 1M)  Work with RockYou and partners on Coke applications for design/development and distribution – Context Optional – FaceIt! 45
Slide 46: Questions Questions? Email ro@rockyou.com 46
Slide 47: You rock! Engage the world.