Making Revenue from Applications
Like games, apps provide a plethora of different ways to make money. In fact, they offer more revenue models than any other aspect of Facebook.
Apps can bring in money via the following channels:
• Advertising
• In-app purchases
• Referrals
Advertising is a solid revenue stream as the app makes users a captive audience. You have to know your audience to determine which type of advertising they would be most responsive to.
In-app purchases could be the highlight of your app revenue. Facebook makes it relatively easy to let users buy items within your app. The currency is Facebook Credits, a secure method à la PayPal, that doesn’t require visitors to pull out their credit cards. Instead, they can just click on the desired item and have it deducted from their Facebook Credits. It creates a virtual currency system. We discuss Facebook Credits extensively in Chapter 17.
 | DEFINITION |
Facebook Credits is the virtual currency used for purchases on Facebook. Visitors can use their credit card to buy Facebook Credits, which, psychologically, makes them more apt to spend money because it doesn’t seem like they are spending real money.
The most interesting app revenue model is referrals. If you have a good relationship, they may send you business back in return. However, on the internet, the referral usually means money changes hands:
1. Send someone to a website.
2. He or she makes a purchase.
3. You get a cut of the purchase price.
A common internet example is Amazon. The massive retailer gives referrers anywhere from 1 to around 10 percent of the purchase price.
 | FRIENDLY ADVICE |
Is your product available only through a retailer? If the retailer is doing paid referrals, your app could get you paid twice: once from the actual purchase and again for the cut from the referral. For example, Amazon gives a referral bonus if a customer clicks on a link and purchases a product.