Spending $100,000 For a Facebook App is Just Plain Stupid

Our story yesterday on how the Malaysian Tourism Department spent $590,000 for six Facebook apps caused quite a bit of reaction on Twitter. One user commented that the app development firm seriously knows how to sell its apps. It’s a good return for the developer but a seriously stupid move by the Malaysian government. It’s an utter waste of tax-payers’ money.

Okay, fine. Maybe we shouldn’t be judging since we’re not in the Facebook app development business. But it does seem like something fishy is going on here. Anyway, in order to get a second opinion on what I saw as a nutcase move, I spoke to Preetham Venkky, the Business Head at KRDS India, one of the Facebook authorized app development firms in Asia. You may remember Preetham as the sharp eye that caught and explained Pizza Hut India’s mysterious disappearance on Facebook.

KRDS India was the firm that helped Facebook India market its own Facebook page on Facebook. Considering those credentials, I forwarded him the news to seek his opinion on the matter. Here’s Preetham’s reply:

Preetham Venkky

While anything is possible, spending US $590,000 on six Facebook apps doesn’t make much campaign sense. So for an app like Citrawana (one of the six) to costs close to US $100,000, this is impossible since the app is pretty straight to the point. The money paid is seriously unjustified. It should cost anywhere between $ 12,000 – $ 15,000 inclusive of two iPads being given away as prizes. These costs would include (to quote directly) – “creative works, concepts and ideas, design, flash programming and coding, testing and debugging, uploading and launching of application, system server development and maintenance, and development of database from the contest”.

Based on the minister’s statement, what’s important to note is that the cost does NOT include campaign management, monitoring, Facebook ads, or fan recruitment through Facebook and Google. In most cases, the costs can escalate quite rapidly if a key deliverable is fan count. If there’s a target to acquire one million US fans for the page (this could be a realistic expectation since the client is a Tourism client) where the CPC is US $1.10 (on average) then it might be a good deal. If I were to make a guess, I think it would make sense if $90,000 includes the development of six apps with the remaining money spent on media (buying ads) to propagate and rapidly increase engagement.

What’s shocked me is something different altogether. The agency hasn’t used the basic mechanics involved in Facebook fans acquisition. For instance, a user can play the game without ‘liking’ the page. There’s a micro-leaderboard but no global leaderboard. How would the user be motivated if he doesn’t know where he stands globally? And honestly, it’s extremely difficult to get 50,000 points which will only encourage the users to give up soon.

Also, the developer hasn’t used any ‘virality’ at all in the app. For instance it doesn’t prompt the user to share their score as an update, it doesn’t have an option to ‘challenge’ and invite your friends to join the game etc. There’s a lot that could’ve been done with the app, but it looks like the development agency has missed out on the core features to make the app go viral and hence increase fans and awareness.

So there you go, explanations and advices from the expert. One final point to rebut Minister Mamit’s “we-have-20,000-fans” reasoning: If the $600,000 budget were to be spent on just acquiring fans (at $1.10 per U.S fan) the Facebook page could have gotten at least half a million US-based fans, far more than the current 28,000.

Update: The original source story on Free Malaysia Today appeared to have been deleted. But you can still find it cached here if you’d like to read it.

Image credit: Army Humor