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Social Media Calculator and the Economics of Branded Apps

Posted on 2.26.2009

Social media application company Buddy Media released a "social media calculator" and a report that offers a valuable comparison of the spend and number of engaged users generated from social media apps versus online display ads (banners).

The report, titled, "Social Math: The Economic Case for Branded Applications" aims to help brands decide how to invest their social media budgets effectively. Key findings include:

  • App-vertising campaigns yield 398% more engaged users than social media display advertising campaigns.
  • App-vertising clients pay 78% less for each engaged user than social media display advertisers
  • App-vertising campaigns deliver six times the number of impressions than traditional banner display campaigns.

While the upfront cost of an app-vertisement campaign might be slightly higher than a display campaign, a brand would have to invest nearly $1 million more ad dollars with a banner-only campaign to reach the same number of engaged users, according to the report/calcuator. Brands can use the calculator to customize these findings to their social media budget and compare the cost of engaged users.

"Engagement will be the key metric used to measure the effectiveness of social media advertising. That's something that even Facebook seems to endorse through its introduction of engagement ads last year," said Michael Lazerow, CEO of Buddy Media. "Branded apps are not the only way to advertise in social networks, of course, but we believe they are the most powerful way for leading brands to get high levels of engagement."

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