Zynga is now running Facebook ads and Sponsored Stories, a revenue split partnership the two companies outlined in Facebook and Zynga’s S-1s over the last year. The ads appear in the Zynga right sidebar, and use the same personalized targeting exhibited by ads on Facebook . This agreement allows Zynga to better monetize its standalone site without the need for expanding its sales force, and meanwhile Facebook essentially gets free money. The exact percentages of the revenue split have not been disclosed.
The set up gives the world a look into what a Facebook ad network could look like across the web — a move that could allow Facebook to leverage its vast store of biographical data and the social graph to boost revenues. Facebook and Zynga shares responded positively this morning, with Facebook up 4.5 percent to $33.28 and Zynga up 4.6 percent to $5.99.
For years, we’ve expected that Facebook will eventually launch a full-fledged offsite ad network, but the company has moved extremely cautiously. It has preferred to optimize and test the inventory on Facebook before moving offsite, although it has an enviable network of like buttons and widgets strewn across the web. Facebook has refused to comment on the situation, but it did make a change in its governing documents recently that gives it the freedom to show standard Facebook ads offsite. Before, only Sponsored Stories were permitted.
Here are the important parts of what S-1 Developer Agreement says about the ad partnership, written from Facebook’s perspective (bolded emphasis added). Notice that the percentages of the revenue split were redacted, and appear as [*]:
b. Conditions and Restrictions Relating to Facebook Ad Units. The following conditions and restrictions apply to Facebook Ad Units on Properties:
(i) Each Facebook Ad Unit you implement shall:
(1) appear on the right hand side of the web page of all Properties [of Zynga.com] so the user is not required to scroll horizontally to see the Facebook Ad Unit, and
(2) be subject to and comply with the same dimension and substantially the same position and placement requirements that we use for and apply to third party advertisements placed on Canvas Pages as of the Effective Date, as such dimension, positioning and placement requirements are depicted and described in Exhibit F. You acknowledge and agree that we will be the “executive producer” of all Facebook Ad Units. Accordingly, and subject to Section 2.b (vii) below, you agree that we will have sole control over the appearance, design, layout, look-and-feel, Content (including adding, changing or removing Content), advertisers whose Content appear within, features, and functionality of all Facebook Ad Units and the methods and means used to monetize Facebook Ad Units.
a. Within 15 days of the end of each month of the Term you shall send us a report that (1) identifies the specific Properties on which you implemented the Facebook Ad Unit during the previous month and (2) the number of Page Views generated during the previous month of all Zynga Game Pages on which a Facebook Ad Unit was not implemented (“Monthly Page View Count”).
b. Each month during the Term, for all Properties on which you implemented, during the previous month, the Facebook Ad Unit, we will pay you a percentage of Net Revenue (“Ad Share”) arising from such Properties for the previous month. Such Ad Share will be [*].
The ads look exactly the same as the ones on Facebook except they show a small Facebook logo and the word “Sponsored”. When these are clicked the direct to Facebook’s Help Center that explains the integration as such:
When you connect with Facebook on Zynga, you’ll see personalized ads and sponsored stories. The Facebook ads you see on Zynga are the same ads you see on Facebook.
- You’ll only see sponsored stories about activity that has been shared with you
- You can remove ads that don’t interest you by clicking the X
- Facebook doesn’t sell information that tells advertisers who you are