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Monetizing Social Networks: sharing the revenue


EDIT: last paragraph – built in modules in Pligg to give back money to citizen journalists (people who submit articles) for Pligg sites like Bloggerati and Kwoff.
Quite a lot was written in the late nineties about importance of giving your social network members a way to get some extra cash themselves. Or revenue share with you. It builds loyalty and traction for the community. Handing over a million dollars is one way of gaining members, but enabling members to buy and sell, or take a clip of advertising, or auction or something else will keep the members. It should become a nice little earner for both you and them which builds goodwill. Because, of course, it’s hard to complain about how “monetized” a site has become if the community are participating in it. Ask Sitepoint Marketplace. I love that site. It’s like eBay addiction has caught up with me – but I buy websites and speculate on domain names, not webkinz and last season’s Prada. I still have ZERO clue what I am going to do with the “Facebook style social network” which I popped up at socialnetwork.com.au. If you have a social network around a subject that people are passionate about – and let’s face it, that’s most of the niche online communities – find a way for that subject matter to generate revenue for both you and your network! Worse comes to worse stick a subforum for classifieds – that way they can at least trade amongst themselves. Their trusted selves I mean.

Google AdSense revolutionised advertising by allowing the consumer – a social network member – to be the distribution channel for the advertising. No longer did you have to be a big portal or sign up with a banner ad company, now you could have ads directed to your little blog that were relevant to your blog’s subject matter. Affiliate programs are awesome. Widgets and gadgets allow bloggers and community hosts to take distribute your marketing. Awesome.

YouTube InVideo Ads (premium only)

Drive engagement and awareness with targeted placements within premium YouTube partners’ video content. (ie. not your crap)

Which is why it’s a bit of a surprise that there is no affiliate program for advertising in YouTube (Advertising). If YouTube wants to monetize viewed content, and they are embedding ads in premium videos, why not embed them in members videos that sign up and have an adsense account? It’s a genuine question. One answer that makes sense is that Google scrapes your site then delivers ads relevant to subject matter. So there is less likelihood of a porn ad on a kids site and a diaper ad on a porn site. But I don’t know, I thought Google/YouTube/Adsense were clever at that sort of thing…

And for me, the consumer, if I know that good quality vidcasts and my clever videos might earn me a few dollars, wouldn’t I increase the ‘quality’ (or at least the appeal to my target audience)?

Tip: if you want to monetize user generated content, let the creator/member share the revenue, and they will find ways of selling their social media for you!

I thought I blogged about MetaCafe Producer Awards before? I can’t find the blog post but then again, Google Blogspot search goes ga-ga sometimes. Ah well, here goes:
User creates video, user uploads video, user gets income per 20,000 views. Host gains income from advertising and sponsorship. Win-win-win. There’s even the added benefit that the community minds less about the advertising when the revenue is going to their mates. (Watch out for ‘gaming’ the system). Think of Current.TV (the Al Gore User Generated Content TV station) and the money they pay members for the ads.

I predict the next really big social networks will make sure their members can earn revenue. MySpace is the Social Network 1.0 – marketing driven, closed in. Social Network 2.0 will be open and affiliate and online community revenue driven. Facebook is heading in that direction. Second Life is well down that road. If you think I am being naive remember the generation we are talking about – Gen Y – and the strange mashup of materialism and ideals that exists in their bright goofy souls. God bless their little cotton socks. 🙂

There was something else I wanted to add, but I can’t remember right now. Watch for an Edit later. After my afternoon nanna nap probably. 😛

EDIT: oh yes, I remember, Pligg which Bloggerati Australia runs on, bloggerati.com.au has a Google Adsense Revenue model. This means that if you – say, Meg or Steve, – put your Adsense id in your profile, and then everytime you submit a news link on Bloggerati Australia, the ad that appears next to your submission is your revenue. I, as the hostess with the mostess, can specify in the settings whether your adsense appears 50% of the time or 100% of the time next to the link information. I’ve enabled it – put your id under your profile – but I need to place the ads somewhere. Gimme a little while…

(I spelt it monetize cos I got sick of the spelling checker in Blogger putting wavy red lines under monetise. Sheesh, there it goes again!)

Laurel Papworth

Named by Forbes™ Magazine in the Top 50 Social Media Influencers globally, named Head of Industry, Social Media (Marketing Magazine™) and in the Power150 Media bloggers (AdAge™). CERT IV Training and Assessment certified trainer (Diplomas and Certificates etc) Adult Education. Laurel has manager Facebook Pages for Junior Masterchef, Idol, Big Brother etc. and have consulted on private online communities for banks Westpac, not for profits UNHCR & governments in SE Asia. Lecturer, social media, University of Sydney for 10 years and Laurel has 11,000 online students. Laurel Papworth personally connects to 6 million followers online and has taught around 100,000 people in the last 10 years how to be social media managers.

10 thoughts on “Monetizing Social Networks: sharing the revenue

  1. zack, have a look at this post about Crikey. They were making $1,000 dollars a month from Google AdSense and then moved selling their own ads and make $100,000 a month. So you would have to figure out a dollar figure for the demographics of your community – businessmen or tweens? And the content – major media property or some guy in a garage?

    Look at say, four of the main revenue models – advertising, consumer pays, sponsorship and revenue share. Ask at Amazon for affiliate revenue for a community that size. Then ask at SitePoint – they are a bit blackhat with their marketplace but the discussions are VERY revenue focussed.

    MySpace makes around $2.17 per head from advertising. SKTelecom’s Cyworld is just over $7 (no advertising). Evaluate your 75,000 uniques a month – how much time do they stay onsite?

    So yes, somewhere between $1000 and $100,000 a month. 😛

  2. Interesting article. I am currently doing a emarketing strategy for a start-up online community as part of an assignment at uni.
    would it be possible to get a figure on the revenue a new entrant could generate by the end of the year considering 75,000 average monthly hits/visitors?

    I know the “it depends” bit 🙁 but any estimate would be a good start to know what one can/should expect to make at the end of the year.

    thank you 😉

  3. between $1000 and $100,000 a month…
    I don’t know if 75,000 “unique” visits is a realistic number for the first year of a start-up…but thanks for the insight.

    cheers!

  4. Great text laurel! You should know this is exactly what we’re doing. We’ve developed an up-to-the-minute Australian media portal that provides for anyone to add/submit text, image and video/media (coming December) and earn a revenue back for it.

    We’re re-releasing the concept in December, however we will pay between 25%-50% of a pages revenue to anyone who adds content. It’s a good deal and I think only fair that we give back some of the cash.

    We’d encourage anyone and everyone to take a look at the site, register/join and begin using it. Right now you can add and read media, with the revenue return function coming in December. The model will also allow for people to use their own social networks and coverage to “push” their content out, and earn a real revenue back from it.

    We cover all news, analysis, technology and standard sections, as well as new content coming in December.

    Anyone interested: www.scopical.com.au


    Elgar Welch
    elgar at scopical dot com

  5. What I don’t like about Google AdSense is how it needs to take over your above-the-fold real estate before it generates any revenue for you, making your property look really ugly.

    I’m curious about other revenue models, especially as I am seeing lots of visitors to my blog and 1.0 sites. I’m hesitant about splashing ads all over my sites to the detriment of the content, look and feel…

  6. Hey Laurel,

    Long time no speak. Really enjoyed your article. I agree rev share is the way to go.

    We recently launched a wine social network site called qwoff.com.au.

    Cheers,
    Brendan Yell

  7. @Brendan – are you MY Brendan? From OV days? o.O howdy. 🙂
    @Lee – my problem with Adsense is the opposite. If you muck around with the CSS, it blends SO well into your site, it doesn’t look like an ad anymore.
    @Elgar, I’m checking out the site. 🙂

  8. Interesting article here. this may lead into another way for affiliates to get paid in their marketing efforts.

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