Cubics serves tons of ads across social networks, no word on actual return
Written on July 23, 2008 – 3:50 pm
Robin Wauters, Next web enthusiast & Plugg organizer
Cubics was the one of the first advertising networks designed specifically for social networks, and currently boasts support for most major social networks including Facebook, MySpace, Friendster, Bebo and others. The company prides itself on displaying highly targeted ads, based upon detailed demographic, interest, and behavioral data, a strategy that led to its acquisition by online targeted advertising house Adknowledge in December of last year.
Cubics sent out a press release today about the fact that they now apparently serve more than 10 billion ad impressions per month on social networks (hat tip to MarketingVox). The company claims this number far exceeds those of Social Media, citing a volume five times as large. The release also correctly states that more and more time is spent on social networks, and that the engagement of people with social applications is very high.
While this may be true, social networking sites are notoriously hard to monetize, and the company remains dead silent on the actual return the ads they serve yield for their customers. For reference, TechCrunch yesterday wrote about Lookery lowering its guarantee on Facebook ads to a mere 7.5-cent CPM.
It’s unfortunate that Cubics didn’t talk about their current numbers, challenges and opportunities. We could have a learned a lot more than the fact that they serve billions of ad impressions on social networks that everyone else says rarely get noticed or clicked on.
Update: Cubics’s general manager and PR manager responded in the comments with some context, so scroll down for their perspective.
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By Dwayne Lafleur on Jul 24, 2008
Robin,
I’m the general manager of Adknowledge’s Social Advertising division, Cubics.com.
I’d love to share more information about our current numbers, challenges and opportunities. While other social ad networks have experienced decreasing returns and poor performance, we have experienced the opposing movement. Our current average CPM rate is nearly 2.5x where it was just four months ago and is magnitudes higher than the above referenced 7.5 cent Lookery guarantee. The reality of social networking inventory is that there are extremely large variances in traffic quality amoung the different applications and demographic segments. We have applications earning as low as $.05 CPM and many others over $2.
Both the major challenge and opportunity that we are facing is bringing brands into the social space in a meaningful way. We are having some early success in space, particularily in the United Kingdom and Australia where we have 15 person and 7 person sales teams respectively. We have already worked with major brands like Nissan, Vodafone, Virgin, Weight Watchers, Pizza Hut, Ebay and more. We are currently building out our US brand sales presence to replicate our success overseas and expect to grow brand revenue from 20% of our business today up to 50% by this time next year.
[Reply]
By Gates (Cubics Publisher Relations Manager) on Jul 25, 2008
Hey Robin: It’s unfortunate that Cubics didn’t talk about their current numbers, challenges and opportunities. We could have a learned a lot more than the fact that they serve billions of ad impressions on social networks that everyone else says rarely get noticed or clicked on.
There are two good reasons that we limit talk about current numbers. The first reason is obvious, we’re a private company. However, the second reason is less obvious, the numbers are not always easy to put into context.
Revenues are coming in and Social app developers are definitely making real money. Here’s an Adotas link that quotes not only us but several other people in the space.
Lookery’s lowered guaranteed CPM is simply a poor metric for evaluating the health of the space. Total revenue in the space can still grow while CPMs drop. You use the term … a mere 7.5-cent CPM, but again we have an issue in context. Is that number good or bad? Compared to what?
How many magazines or blogs, with 3 employees or less made a million dollars of revenue in the last year? What are their CPMs? You can see my point?
Challenges and opportunities
The space is still growing very rapidly. So keeping up with that growth is a primary challenge.
Another challenge is bringing brand advertising dollars into the space. We strongly believe that the social sphere is a great place for brand marketers, but we are still navigating the hurdles, particularly in the US. Our UK offices have run campaigns for such names as Vodaphone, Orange, Sky Satellite. In the US, we’re still making our initial localized forays into the space.
The last big challenge is creating advertiser value in a space that’s not always conducive to this. We’re working with advertisers and publishers in several different ways to provide a balance of value for everyone involved. We’re already supporting advertising on a per-click (CPC) and per-1000-impression (CPM) basis, but we’re already working with things like “capped” CPM pricing and we have other new innovations in the works.
There’s a lot of innovation being done here at Cubics. We have answers to all of these challenges and bigger plans on the horizon. So don’t listen too much to the fear, the Social Apps space is definitely growing and there is definitely revenue to be had (and you don’t have to believe me, just listen to the top developers).
[Reply]
By Sheila on Aug 26, 2008
Just came across this blog and wanted to share my own experience using Cubics.
I was, initially, thrilled with this service. I got a lot of impressions for the money I spent. I was so impressed that I contacted Cubics and told them I would be including this feature for all of my clients who advertise through my company. How could I not? The ROI was amazing!
Then, a mistake occurred. Cubics accidentally applied money from one campaign to the other. It was their mistake so I wasn’t too worried about it. I was sure they would correct it.
That was months ago. And numerous emails ago. The customer service I received was appalling. The issue was never resolved nor did they get back to me about why it wasn’t resolved. They just ignored it. They stopped emailing.
What a disappointment.
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