AOL's Ad Guarantee
Posted by: Catherine Holahan on June 30, 2008
Social network ads have become notorious for low prices and low click through rates. On June 30, Time Warner’s AOL announced plans to bolster the value of social network ads by guaranteeing a set price for those placed on applications within Bebo and Facebook.
Application developers that use AOL’s Platform-A WIDGNET advertising network are guaranteed to receive 40 cents for the first three impressions per US resident. “This announcement reinforces Platform-A’s commitment to helping developers generate revenue and monetize their Bebo and Facebook applications,” said Dave Jacobs, senior vice president of Publisher Services for Platform-A.
The guarantee shows that AOL is aggressively courting developers’ business. It’s not the only one. VideoEgg, a video advertising network, has also gone after the market to place ads on widgets in social networks. The social networks themselves are looking at the space as well.
But what this announcement really showed me is just how low CPM prices must be for applications. If AOL’s 40-cent guarantee is rich, what were widgets commanding in the past?