While MySpace has allowed third party companies to embed widgets for quite some time, Facebook took it a step further and allowed full featured applications to reside “within” the Facebook experience, like the Social Shopping experience in Visual Bookshelf. Most importantly, Facebook allowed these applications almost full control over the application experience.

Beyond selling our own display advertising across the social shopping suite and our 20+ other applications, we can provide advertisers the ability to leverage Social Data to target customers directly. Social Data Demographics includes what user’s watch, read, listen to, and use. Beyond the traditional demographics of age, sex, and location, social data takes that a step further.

For example, the Harry Potter Book 7 in Visual Bookshelf has 4x the number of book reviews as the same title on Amazon. Hundreds of thousands of users have added books from the Harry Potter series to their bookshelves. That community is active on Facebook. Why wouldn’t an advertiser want to target Harry Potter readers when the next Harry Potter movie comes out?

This is the next phase of advertising in the social application space.

It’s simple: combine a positive review from your application’s review wall, your 75×75 directory icon, and the facebook install button. The sample we’ve provided is for the neat My Music application by our friends at Qloud.

On the publisher side, you should redirect clicks through a ‘reflector’ so that you can track the clicks you’re generating.

On the advertiser’s side, you should provide a link to the publisher with a spot for the publisher to fill in the current user’s UID. The target of the link should log the clicking user and then redirect the user to the application. Later on, you can reconcile the referred users with your installed userbase to ascertain a conversion rate (and thus an eCPI–effective cost per install).