How to make money as a social network
Despite their popularity, social networking sites like Facebook, MySpace and Bebo are struggling to make money. Alongside finding it difficult to monetise their sites through ad revenues, these social networks are also running the risk of upsetting their users who are traditionally against receiving marketing. Indeed, Facebook’s recent attempt to launch Beacon caused such a huge furore amongst its users that they were forced into an embarrassing U-turn on their activity. Bertrand Bodson, co-founder of Bragster.com, explains more.
It is clear that the standard cost per impressions advertising model of banner deals, or changing the backdrop of the site is not creating cut-through for the brands and therefore a new model of online advertising is needed for social networks. As social networking is a very personal activity, brands need to realise that they cannot persist with a ‘one size fits all’ approach for their online advertising. Traditional online advertising models based on click-throughs will cease to be effective as users become more and more resistant to marketing.
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The social networks themselves have a responsibility to their users to ensure that any advertising on the site is both relevant to the user, and is presented in an interesting and engaging manner. Social networks also have to be honest and up-front with their audience and clearly differentiate between ad and user generated content. This gives the user the choice as to whether to participate in the marketing or not.
Ultimately for online advertising campaigns to be successful for both the marketer and the social network, they have to be relevant and specifically targeted to the desired audience. Even more importantly, campaigns must be ‘sticky’, in other words users must want to view them more than once, share them with friends and actively look out for updates on the campaign.
In order to do this, brand marketers and social networks must start working more closely together to create specific campaigns. Marketers are the experts at creating engaging online campaigns, but it is the social network who knows their audience best and should be part of the process to ensure that the activity is relevant for the users, and in line with existing user generated content on the site.
The other way for social networks to become more successful at engaging brands with their users is to offer a 360° approach. By integrating brands into experiential activity with more traditional sponsorship deals, social networks can offer greater engagement for the brands with their dedicated community. This type of seamless integration will build the brand’s profile amongst the network’s audience and improve awareness and relationships for them.
These considerations lead to one conclusion – if a social network wants to successfully monetise itself through advertising, then they are going to have to develop a specialised audience. By having a dedicated audience who share similar interests, particularly those groups that are hard to reach through traditional advertising, these social networks will be able to attract brands to advertise on their site as they can demonstrate cut-through for the advertising, unlike advertising on wider social networks. These small social networks need to be careful to make sure that they can keep their own identity as they grow to keep this niche feel that is loved by their users and, in turn, by the marketers!
We are having huge success at monetising the Bragster social network as we are very clear about our audience. Therefore, Bragster has been able to work with relevant brands such as Virgin Media, PSP and Cadburys to create pertinent campaigns that encourage the audience to become involved with the brand themselves.
The recent campaign for Cadburys to promote its new chocolate Crème Egg Twisted proved hugely successful as it captured the spirit of Bragster through a series of videos featuring Dom Joly as the new chocolate bar setting up unsuspecting consumers and covering them in the crème egg goo. A Twisted competition got the community involved by daring people to see how ‘twisted’ they could be by uploading their own videos for the chance to win a Nintendo Wii. This mechanic gained huge interest on the site with 300,000 UK people on the site viewing the campaign over the month that the campaign ran.
Large social networks will continue to exist as it makes sense for consumers to be on the same site as their friends, but marketers will become less interested in advertising on sites like Facebook or MySpace where users do not all have the same interests and the cut-through for any campaign will be much less despite the larger audience. Therefore these sites will have to rethink how to monetise themselves and live up to the potential that’s obviously available.
For existing and future social networks, the path to success is clear: Make sure the social network appeals to a group of like-minded people, work closely with marketers to ensure that any campaigns fit in with the ethos of the site and engage with them to make them advocates for both the site and the brand.
For companies that sensitively manage their network - keeping the community spirit whilst engaging with marketers to run successful brand campaigns – the rewards could be great.
Bertrand Bodson (pictured left with co-founder Wim Vernaeve) is co-founder of Bragster.com, the online community for bragging and daring and enables users to challenge each other and to showcase their victory by posting videos. A social network where ego is everything, Bragster has been described by The Guardian as ‘Jackass meets Facebook’ and was a Red Herring Award – Top 100 Net Company in 2008.
