The Funnel begins – Google taking on Facebook, bigger than you think

The big news today is that Google will soon be announcing OpenSocial [ongoing].

OpenSocial is a BigDeal(tm) for a lot of reasons. If you have been in a face-to-face conversation about Facebook with me recently, you’ll have heard my own ideas about an open platform being what will drag Facebook down. It will be slow, but this is the beginning. I have also written about why starting a company as the Facebook Platform is risky.

There is even more interesting news than the announcement of OpenSocial however. As Microsoft and Facebook strengthen their advertising relationship, Google has hit the ground running and they are currently courting the more successful Facebook application developers to start using Google tools to built their user numbers. Full text of the email is below.

Why does this matter? There are a few reasons. The biggest is that this demonstrates that Google has a serious, long-term strategy in place. Simply releasing the OpenSocial spec did not do anything to confirm how serious Google is about this game, but they are creating a funnel of Facebook Application developers to leverage in the future. Google is going to be more than willing to create very cheap offers for developers in order to keep them addicted to Google’s ecosystem. As OpenSocial expands and matures, Google will light the fire under their Facebook developers and create easy, and profitable, options to migrate Applications and Users away from Facebook.

Google see Facebook as a primary threat, and Microsoft sees them as a battalion of shock-troops to keep Google in line. If Google did not create a long-term strategy now, it’s possible the would have paid dearly down the road.

This is a problem for Microsoft’s investment in Facebook. Because Google has a long-term strategy, this is going to be a protracted and expensive fight. The theories doing battle are open platform vs. closed platform. Considering the success of the Internet itself as a largely open platform for developers, Google is in a great position to win this fight.

Dear Facebook Application Developer,

Would you like to drive more users to your app? We’ve expanded our pay-per-action (PPA) beta test and would like to invite you to participate by creating ads for your Facebook application.

To start setting up your first pay-per-action campaign, click on the link within the pay-per-action alert in your AdWords account and follow the simple steps at http://adwords.google.com/support/bin/answer.py?answer=68150 to get your PPA ads up & running across the Google content network and on other Facebook applications.

Key Benefits of PPA

* Save money by paying only for actions that you define, such as users adding your app. Rather than paying for clicks or impressions, you only pay when a visitor performs a specified action, such as installing your Facebook application or visiting your main application page.
* Save time by setting up AdWords conversion tracking: you can set your desired cost per action and pay for completed actions to hit your cost-per-action targets.
* Increase conversion rates by using publishers’ knowledge about visitors to their websites to your advantage. Individual publishers in the Google content network, including other Facebook applications, choose to display PPA ads that they feel will appeal to their visitors. This works to your advantage, as publishers are motivated to choose ads they believe will have a high conversion rate.

With PPA, you decide how much you want to pay for each type of action, whether it’s $1 for a user installing your application or $.15 for visiting your application page. You can also control your spending by setting a daily budget. In addition, you can view clicks, impressions, conversion rate, cost per conversion, total conversions, and total cost for each pay-per-action campaign by running a Placement Performance Report or a pay-per-action report in the Report Center of your AdWords account.

For more information about pay-per-action ads and a list of our most frequently asked questions, please visit the pay-per-action section in the Google AdWords help center: http://adwords.google.com/support/bin/topic.py?topic=11635

We are excited to offer you a new way to attract new users to your Facebook application and meet your advertising goals.a If you have any questions, please email adsense-developer-research@google.com.

Sincerely,

The Google AdSense Team


Update: Techcrunch and VentureBeat are now covering this.

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