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03 Jul 2008
Revenue generated from social networking businesses in the US continues to be disappointing, new research reports.
In-Stat said that US social networking firms have not delivered predicted revenues despite operating for more than 13 years.
The analyst firm blames this shortfall on a failure to find and exploit different models that capitalise on the data such sites collect.
Affiliate advertising, the selling of virtual goods, micro-payments, site merchandising and data mining are all viable alternatives to traditional revenue models, according to the analyst.
"Development of niche social networking sites is an essential piece of the monetisation puzzle," said In-Stat analyst Jill Meyers.
"The more specific a social networking site is to a select group of users, the more targeted the advertising can become, the more loyal the membership will be because it caters to specific interests, and the more opportunities the site will have to be profitable."
In-Stat forecasts 92.2 million social networking users in the US by 2012. However, two-thirds of respondents to an In-Stat US consumer survey do not pay for premium services or features.
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Do you agree?
social networking monetization puzzle
a few things going on here in my opinion. first, people go to socialize on social networking sites, niche or no niche. they don't go there with their wallets out. secondly, if you want some of the social networking traffic you had better have a fully optimized (SEO) site to capture the the traffic (leads or transactions). Make sure you have landing pages optimized too.....this is a key piece. If you don 't have that in place (and I do not) chances are you might generate some traffic but it will dissipate quickly.
Posted by: jim 05 Jul 2008
Niche professional marketing
Totally agree with Jill Meyers. We are currently developing a niche professional networking site for launch in August and have spent a considerable amount of time researching the monetisation of this site in a way that is condusive to building user traction. On all levels we have found the more targeted the offering, the greater the interest we have received from prospective partners.
Posted by: Darren Pearce 03 Jul 2008
It's a duh
We have never had greater ability to capture such specific customer data as we do with on-line customers, users and social network participants. And yet, more and more networks are cropping up attempting to capture broad audiences so that they can claim big numbers. Haven't they heard the expression: it's about quality not quantity?" The comment above about niche focus should be obvious to marketers. I believe greed for huge numbers vs. targeted numbers blinded these marketers. Nancy Fox
Posted by: Nancy Fox 03 Jul 2008