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Big Boys Arrive For Facebook Application Developers

Great press release today from announcing their Facebook Application Ad Network.

Federated Media made an announcement the other day, AdBrite has made an announcement, also.

Sounds like tough times ahead for Cubics, Lookery, and Social Media. It is hard to imagine they have the scale to support strong RPMs on a significant amount of inventory. Large network’s strong marketplace of advertisers should position them extremely well to take share in this market. Once they start offering higher RPMs on more impressions, that will make it difficult for small networks to compete.

Popular applications that generate a lot of page views will not be able to get the same eCPM by doing a boutique deal on a small amount of inventory that they can getting significant fill rates from a large network. As the big guys commoditize the inventory, the ability to sell this in an interesting way for small networks should get tough.

Fledgling networks that started with a strong advertiser message by pricing on CPA (installs) like Social Media and Slide will find that the pricing they offer publishers rapidly becomes uncompetitive. The big guys have some of the best CPA deal structures in the world, they will simply have more competitive ways to fill inventory on an eCPM basis.

Crunch, crunch, crunch.

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