According to the Wall Street Journal, social networks are hard to monetize. That's pretty widely known in the industry. Facebook is a hot destination, but their ad solutions are not hot yet and might never be. Being impossible to monetize was a big criticism of AOL's surprise acquisition of the Bebo social networking service at a time when MySpace CPMs were still under a buck. And I'm sure they still are.
Maybe Facebook will crack the code and make money off of people's social activity online.
Maybe the only social networks that will thrive financially are ones that combine social features and some kind of specific consumer/vertical activity -- like gaming or philanthropy or birdwatching.
Maybe there's only room for one purely social network to make money.
Maybe that will be Facebook with its lock on the U.S. audience or maybe it will be an upgraded Bebo that gets mashed into tons of popular AOL services.
Maybe there won't be a single global social networking winner.
Maybe we'll get leaders in each country and only a few services will get strong adoption in multiple countries.
Maybe I'm just fascinated about vertical social networks because it's part of the path Crowd Fusion is on.
Maybe it's just because I read Barb's really long interview with the founder of Raptr, the social network for gamers.
Maybe.
Comments (4)
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Brian Alvey 1635 days ago
It definitely has to be subtle, but at some point any secret held by more than on person is always revealed. If I made a nickel telling my Facebook friend to buy Tide, they will find out and my influence will be dampened. If they know if advance that I'm repping Tide, then they'll take that bias into account when I chime in with "Well, I always find that Tide does the trick."
So there definitely has to be a transparency aspect. When I did the Blogstakes contest engine, everyone knew that the people referring you to enter a contest were also entered. With AdSense it's very clear that the publisher gets a cut when you click. With Amazon referrals it's a little less clear since those links can be mixed in with content, but it's not really a secret.
Something will come along that picks up where the Facebook Beacon left off.
Now you've got me thinking of what that will be.
Judith Meskill 1652 days ago
maybe it will be audience driven verticals that respond to and morph according to the organic growth of their members. maybe.
Brian Marchant-Calsyn 1635 days ago
Brian,
While pundits slam social networking for not yet scoring an "AdWords" like revenue model, the point may be missed. What if it's not about advertising, what if it's about sales? There are tactful, strategic B2B sales people (and organizations) using social networking to engage the target in locations where they feel safe and where the sales talent are perceived as credible simply by posting. We all know the idiot in a string who chimes in without knowing anything, I'm not talking about anything that obvious. For any high-dollar sales manager SN is a benefit for their team because it educates them greatly to their prospects tendencies.
Brian Marchant-Calsyn 1605 days ago
Brian, your post was on social networking sites themselves making money and I took my comment in a “making money off of social networking sites” direction. Sorry about the diversion. Indulge me a minute and I’ll circle back. A new marketing/sales role is developing devoted entirely to blogging and social networking, for the purpose of SEO and engaging prospects where they are at. As you know, prospects don't open the yellow pages or call from TV ads any more, at least not the ones with money. They type keywords at google, read reviews, discussions and that affects their buying decision. Companies want their products represented there. Some will/have done it in the blatant offender manner, more are doing it in sophisticated and subtle ways. It seems as though blogs and social networking sites that can deliver higher results on certain keywords based on posts should eventually be able to monetize that weight beyond banner ads. Your guess is as good as mine on how. Perhaps by making “corporate bloggers” experts or authors. Perhaps by soliciting corporate bloggers and charging them on a performance basis for where they eventually rank on select keywords. Brian Marchant-Calsyn