Facebook invites developers to monetize Messenger at F8 conference

Mark Zuckerberg introduced a new mantra at the company's F8 developer conference, and the company appears to be living up to it.

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Facebook's mantra has evolved over the past few years. It started out as "move fast and break things."

But with a growing population of over 400,000 independent Facebook developers perplexed with Facebook's fast innovation cycle, breaking stuff is bad for both parties. At Facebook's F8 developer conference last year, Mark Zuckerberg changed it to "move fast with stable infra[structure]."

This year, Zuckerberg kicked off F8 with yet a new mantra: "Build, Grow, and Monetize."

Zuckerberg wants developers now to build and monetize apps on a Facebook platform family: Facebook, Messenger, and Parse. Known for making big product bets, acquiring users, and waiting for the right moment to make money with them, Zuckerberg advanced two new revenue streams, Messenger and new ads for publishers. WhatsApp, Instagram, Groups, and Occulus remain in incubation for the future.

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Facebook opens Messenger to developers

Opening Messenger as a platform for developers keeps Facebook users within its borders. The Messenger composer, which started as a text message editor, now includes apps for creating different types of audio and video media sent within the app. The company announced 40 apps built on the new Messenger platform. Some of the apps enhance audio, image, or video media. Others have commercial purposes.

The way Messenger apps are installed may be an entirely new method of propagating apps. If an app-enhanced message is sent to a user who hasn't installed the app, a link is included for the user to download the messenger app from the app store. That the sending user trusts the app and the platform influences the receiving user to trust and download the app, creating a new way to propagate apps.

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The potential to add feeling and emphasis to a conversation through silly GIFs, morphed images, or sports clips curated by ESPN demonstrates the potential for Messenger apps without a firm conviction that the apps can be monetized. Before one could ask how developers could profit off of these apps, David Marcus, Facebook's VP of Messaging, previewed Businesses on Messenger, a cross-platform extension of Messenger for ecommerce.

Marcus demonstrated online clothing merchant Everlane's ecommerce site, which lets the buyer opt in to use Messenger to track his or her purchases and communicate with customer service. The new platform API builds on the presumption that most people are logged into Facebook when they shop in another browser tab, allowing the shopper's Messenger identity to be discovered using Facebook Login. Marcus walked through a single messenger thread tracking a purchase, a merchandise return, and most significantly concluding with the buyer making another one-click purchase within Messenger. The thread showed automated and personally delivered customer service with Messenger, culminating with the holy grail of ecommerce – a returning customer purchase.

Better ad network monetization

Ads in the traditional Facebook mobile app news stream have produced breathtaking quarter-over-quarter financial performance. The Facebook Audience Network (FAN), which was announced at last year's F8 to broker in-app advertising, hasn't reached the level that Facebook releases financial results about its performance yet. Last year, Facebook acquired Liverail, which improves publishers' management and monetization of video to increase advertising revenues by monetizing ads outside of the Facebook app.

Liverail will now also include display ads that can be reconstituted as native ads by publishers to fit their formats. Facebook product manager Deb Liu claimed that native ads produced seven times the revenue of static ads. Publishers can block and optimize certain types of ad content. Ads are optimized for certain types of buyers, presumably using anonymized Facebook data.

Facebook Analytics introduced

Facebook also introduced Facebook Analytics. It's similar to Google Analytics, but different in that Google Analytics is designed for the open range of the web and mobile internet, while Facebook's measures user behavior on the Facebook reservation. Facebook wants to extend its advertising reach to publishers and app developers to grow its FAN revenues while holding second place in mobile ad revenues to Google (the two combined for 50% of mobile ad revenues last year). If it wasn't for Facebook's unique ability to target ads based on its self-generated data, another analytics platform would be just one too many. If the company can create yet another category of mobile ads, advertisers will adopt yet another analytics platform.

Parse gets IoT SDK

It's hard to imagine Facebook and the Internet of Things (IoT.) Parse added the logic for developers to add IoT to their apps. Given the bold moves by Intel, Cisco, and Qualcomm, it makes sense that Parse, a back end as a service, should add IoT support. And who knows, one day people may want to share data from devices like Nest thermostats to Facebook.

Security, control, and stability

It seems that Facebook has resolved its most contentious problems of recent times, to the point that they are now lower-level maintenance issues. Breaches, personal privacy, and platform stability still require the company's attention, but no longer challenge its viability.

Facebook has built the Threat Exchange, a growing group of companies that collaborate and exchange information to thwart the community of bad actors. Facebook trades on user trust in the face of an increasingly sophisticated community of bad actors. An addition to Facebook's arsenal, Threat Exchange keeps pace in the security arms race.

Facebook continues to emphasize users' control of what types and with whom they share content. The company added a new feature that previews the content's appearance before users share it as an added level of control.

Platform stability, a central theme during last year's keynote, was again brought into the spotlight. Facebook added a dashboard to track bug submissions so that the company's developer community could track Facebook's delivery on its commitment to fix major bugs within 48 hours, and 90% of all bugs within 90 days.

Ecommerce and publishing: The right monetization

For the last two years, a Facebook buy button has been expected. The company did recently introduce Payments to Messenger, foreshadowing Facebook's evolving ecommerce capabilities. At F8, ecommerce became a development platform. The large community of Facebook developers, given open access to the Messenger platform, are more likely to produce a killer Facebook ecommerce app than the company is to do so on its own. And the skills learned can be transferred to WhatsApp, doubling the number of users to over a billion.

Publishing is still in transition, with Buzzfeed and Huffington Post on the ascent while reputable print and digital news outlets struggle. The biggest problem is that the value of ads has dropped from dollars for print impressions to dimes for web to pennies for mobile. If better targeting and native ads prove more effective, Facebook could potentially be the cure for what ails mobile publishing.

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Copyright © 2015 IDG Communications, Inc.

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