There’s been a lot of debate lately over whether branded applications for social networks, created by companies like Buddy Media, are effective.

I interviewed Buddy Media CEO Michael Lazerow at the AlwaysOn conference this month to hear his side of the story. He also presented his case in an article for VentureBeat last week titled: “Why all the bashing of branded apps? Lack of insight.”

Buddy Media saw 138 percent revenue growth last quarter, Lazerow told me, and has a smart performance-based revenue model positioned to do well in the downturn. An average of 150,000 users sign up for each branded application Buddy Media creates, and the company charges $1 for each user. Since it launched 14 months ago, Buddy Media has created 80 branded programs for 50 clients, including heavyweights like Paramount and Anheuser-Busch.

Lazerow believes branded apps will be an important revenue stream in the brand space for social networks.

“There’s no one monster revenue stream in the social nets. Brand advertising has yet to take off, CPA offers have yet to take off, direct marketing, research, you’re starting to see virtual currency monetization,” he says. “So I think ultimately there might be 10 revenue streams that a Facebook or a MySpace has…In the brand space there’s no doubt that branded applications will be one very important part of that, and we think a large part of it.”

–Kelsey Blodget, Associate Producer

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