Right now the value of a social network is tied to ad dollars. Facebook allows you to place ads. LinkedIn charges for job postings. Blogs have ad text and banners. Ad dollars is what is making social media go round. The notion that social media is about the party is no longer the case. It may not be as obvious or it may be very obvious, but Twitter, Facebook pages, LinkedIn contacts, and blogs all have agendas and it is about making money in some shape or form. On the internet, free to the user has generally been the norm. I’m not convinced it has to be.
One of the first social media venues was online games. In 2007, online gaming reached $8.6B. People pay monthly fees to access, entertain themselves, and interact with others. They derive value from the experience and equate that with what is in their wallet. It is one of the biggest growth areas on the internet. Another interactive experience that in some ways is also social is e-learning. Here, the market hit $17.5B during 2007 in the US alone. By the way, B2B companies are already tapping into this with their training offerings. Contrast these markets with social networks like Facebook that is free and a membership the size of the US, and you realize the revenue potential and loss. Granted, global internet advertising had reached $45B in 2007 according to the Kelsey Group. So it is understandable that getting a piece of the internet advertising pie seems easier and more appealing. Google built an empire on this. Combine that with the fact that the internet is ‘free’ to the user and you know how to follow the money trail. I say, this is short sighted. The ROI for ad spend will be less than what you can get from a direct revenue model. The other aspect, you aren’t Google and your business model is about selling your products, not advertising another company’s offerings.
The value in social media for the user is not unlike that of online gaming or e-learning. There is opportunity to be had by putting a dollar figure on the experience. Social Networks are micro communities and associations that provide a value. There is a place for these communities to be fee based and to continue to be true to the experience. Other’s have implemented a for fee experience and are successful: Wall Street Journal, Harvard Business Review, BusinessWeek. Associations give access to their members and communities as part of the annual membership fee. This has allowed these venues to maintain integrity and continue to provide information and experiences to subscribers.
B2B is looking for ways to generate value and revenue from social media. Simply looking at it in terms of the Marketing Funnel and lead conversion is only a part of the potential. Leveraging the interactive and informational quality of an experience and you have the potential to have direct revenue generation. There is also the opportunity for new forms of revenue generation evolved from information service providers like LexisNexis and Elsevier. They sell full or limited access to high value content and community networks. Services may aggregate memberships in trade associations and sell full or limited access to online forums and content. Meeting services can act as conduits to extend trade show seminars and key notes into virtual experiences people pay to access. In each of these 3rd party offerings companies derive direct revenue while building credibility and relationships. Afterall, customers pay to attend events, if there is enough value, they’ll pay for access.
B2B needs to start thinking out of the box in tying social media to direct revenue generation. Social media experiences have value in more ways than an advertising vehicle. With the right value proposition, customers will pay for access. It is all in how you create and package it. Now that is marketing!
