There's a rumor that big social networks like Facebook struggle to monetize their membership base. The problem comes from the fact that the expenses of running site of this scale are much higher than the advertising revenue. But that's only one side of the coin.
What is the reason behind that? After all a big and active community is a big marketing resource. Big networks like Facebook are very general albeit there are interest groups within them. There are attempts to target those groups but the old banner ads aren't doing a good job. In order to monetize those interest groups businesses have to sell directly to them. But the companies running social networks don't sell.
Even worse is the fact that they don't let other marketers sell to their members too. It's easy to understand why - by allowing others to sell, they don't gain much and there are other issues such as privacy.
Having a huge community looks promising but it brings other big issues on the table. Meanwhile a smaller community is much easier to maintain and to sell to it. More often than not, a small community has a much bigger commercial intent and once the technical problems are solved, monetization is easy.
Think of how much would Facebook be worth if it had paid membership. Of course, no-one would pay for something general like Facebook, but imagine a small community of certain interest. The ideas a very targeted group share are worth every penny for subscription. What about paid classifieds and business directory. Not to mention the obvious affiliate promotions and selling your own products.
The key in monetizing social networks is finding a hungry crowd with big commercial intent and providing them what they want - the community. The Internet is big and there are thousands upon thousands hungry crowds in different niches, so targeting them is a profitable business from the start. On the other hand if you try to target the whole Internet in general (like Facebook), you will not find it profitable. Like the old adage goes, try to please everyone and you will not please anyone.
What is the reason behind that? After all a big and active community is a big marketing resource. Big networks like Facebook are very general albeit there are interest groups within them. There are attempts to target those groups but the old banner ads aren't doing a good job. In order to monetize those interest groups businesses have to sell directly to them. But the companies running social networks don't sell.
Even worse is the fact that they don't let other marketers sell to their members too. It's easy to understand why - by allowing others to sell, they don't gain much and there are other issues such as privacy.
Having a huge community looks promising but it brings other big issues on the table. Meanwhile a smaller community is much easier to maintain and to sell to it. More often than not, a small community has a much bigger commercial intent and once the technical problems are solved, monetization is easy.
Think of how much would Facebook be worth if it had paid membership. Of course, no-one would pay for something general like Facebook, but imagine a small community of certain interest. The ideas a very targeted group share are worth every penny for subscription. What about paid classifieds and business directory. Not to mention the obvious affiliate promotions and selling your own products.
The key in monetizing social networks is finding a hungry crowd with big commercial intent and providing them what they want - the community. The Internet is big and there are thousands upon thousands hungry crowds in different niches, so targeting them is a profitable business from the start. On the other hand if you try to target the whole Internet in general (like Facebook), you will not find it profitable. Like the old adage goes, try to please everyone and you will not please anyone.
About the Author:
If you're in using social networks as a marketing tool, see Niche Socializer by Steven Lee Jones and Andrew X.
Post a Comment 0 komentar: