How Much Money Are Facebook Apps Making? Not Much Apparently
VideoEgg has announced that its ad network for Facebook applications - eggnetwork - has pulled in around $1.5 million in ad revenue over the past five months. — While the company is touting the news as a “million-dollar pay day” …
Context & Ripple Effects
Facebook opened its developer platform at f8 and reported [[a:none|68 million active users]] within weeks, and by late January had pushed out a JavaScript client library letting apps run on developers' own websites rather than strictly inside Facebook — a land-grab moment where thousands of apps were racing onto the canvas.
Against that backdrop, VideoEgg's eggnetwork, an ad network built specifically for Facebook applications, reports roughly $1.5 million in ad revenue over five months — and syndicated commentary such as Futuristic Play's piece on declining app stats reads the 'million-dollar pay day' framing skeptically, as evidence that the app gold rush isn't producing real money for most developers.
First-order effects
- Spread across every application on its network, VideoEgg's $1.5M over five months implies per-app payouts far below what the 68-million-user audience would suggest, confirming for developers that in-canvas ad monetization badly lags install counts.
- Developers betting their business models on Facebook application advertising now have hard network-level data that the market's revenue pool is thin.
Second-order effects
- Facebook's own decision days earlier to let applications run off-platform via the JavaScript client library gives developers somewhere else to route traffic, pressuring in-canvas economics precisely when ad revenue disappoints.
- Independent ad networks serving Facebook apps compete for the same fragmented, cheap inventory; whoever can't aggregate enough scale gets squeezed toward the margins of the ecosystem.
Third-order effects
- If thin third-party network returns persist, the structural incentive runs toward the platform owner itself operating the ad layer, since it controls the targeting data and can consolidate the fragmented app inventory that independents cannot.
- The application economy stratifies into a small set of high-traffic apps able to sell advertising directly while the long tail depends on whatever network fill is available.
The trend: Social platform ecosystems are discovering that huge user bases do not monetize automatically through third-party ad layers, pulling application ad economics back toward the platform owner.