With the popularity of applications and widgets made by companies, such as RockYou and Slide, we're seeing the emergence of startups solely focused on creating advertising solutions for app makers. Is there a big business in creating advertising and marketing solutions for widget and app providers? Or are widgets and apps advertisements in and of themselves?
We explored that question by evaluating Appssavvy, a social media agency business. Joining me and Ezra Roizen (Vator Box regular) was our guest host, again, is Marissa Mayer, Vice President of search products at Google.
A couple of the points we raise:
- While consumers spend tons of time on applications in social networks, the CPMs are extremely low because the engagement with ads are low. The mindset of a person interacting with people or an activity in a social network lowers the probability they'll have the attention span to engage with an advertisement
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- Appssavvy is going to have to create advertisements that engage so consumers interact with them, almost like a game
- As an agency or consulting business, Appssavvy has limited itself to a linear model. It needs to move from a linear model to one that has exponential effects if it wants to provide venture-backed returns.
- The challenge for Appssavvy is finding a recurring business model, and one that doesn't rely on big one-time or short-term campaigns
- Google has 40,000 and growing widgets on iGoogle. Google wouldn't use a company like Appssavvy because Google looks at the widgets as advertisements in and of themselves