There’s been a lot of talk lately about monetizing social networks. MySpace
has swapped out much of its senior leadership with talent more experienced in marketing. Facebook (Nasdaq: FB) is floating plans to launch an ad network someday. Both services already put ads on their sites, sell sponsorships, etc.
Most, if not all, of these kinds of efforts focus on using social networks as glorified channels for branding. Companies hope to sell things by paying to put their brands in front of consumers as they’re on their way to, doing things at, and planning to leave their networked communities.
How is this any different than putting up billboards on the way to the fair? Is it possible that the true value of social networks could be derived from seeing them as places?
If you follow this idea through, it suggests an entirely different approach to monetizing social media services, one based less on an imagined future of new, learned behaviors, and more on the old, established behaviors that have driven marketplaces for hundreds of years.
It’s even possible that what drives social media profit will be identical to what drove marketplaces and fairs in Queen Elizabeth’s England of the 1500s.
Like a village fair, social networks are places where people go to do things: to get updated on what’s going on; to gossip; to buy and sell items. As such, the qualities that inform those behaviors are things like authenticity, immediacy, relevance, and meaning. When those qualities are present, people realize value from their actions at the site, just as they do at the fair. When they are not, folk leave empty-handed and unsatisfied.
Markets have always been purpose-driven. According to Peter Ackroyd's brilliant book, London: The Biography, Elizabethan markets emerged quite organically and usually took place on specified days of the week. These marketplaces were loud, chaotic, and sometimes outright dangerous, yet people braved them to accomplish things. Their visits yielded value.
Over time, various regulations and services were layered on top of the markets, in order to make them even more valuable to consumers. Rules were created to certify quality. Brokers emerged to facilitate payment for transactions.
Similarly, brands today should consider ways to contribute to that value of experience and thus share in it. Consider Coke sponsoring a user ID service, so people could certify or "know" one another when they met; or Sony starting and then moderating conversations. Brands might improve their awareness by providing utility and purpose to the market instead of merely posting signs in it for passersby.
The old and new markets share the same pitfalls, too. Choosing to run a funny promotion is no different than hiring a peasant to dip his face in the mud; it’s entertaining, maybe, but it’s incidental, somewhat external to the transactions for which people are visiting. Distraction is not synonymous with engagement, irrespective of what century you’re talking about.
And a billboard along the path to the market isn’t a sustainable or terribly useful approach. Worse, throwing ads at visitors, no matter how they’ve been prequalified, risks damaging the very behaviors marketers hope to exploit, because it shows you’re taking those visitors for granted.
That makes two of us. I'm suggesting that the ads-for-eyeballs model currently in use is not necessarily producing results, or such results that are sustainable over time (the bugaboo of translating time spent/wasted into actual sales is going to catch up with even the most creative campaigns, iMHO).
So I'm not sure I'd advise a client to spend money on it now, unless there were some equation in-house that correlated impressions with ultimate sales. If no such math exists, I bet it's doable, even if it would never be exact.
The 'alternative model' that I'm contemplating would involve marketers in offering/supporting the actual behaviors that constitue the social media platforms themselves. I don't have the right ideas yet, but why couldn't a brand name choose to support some new, useful module? Maybe a brand name could provide identity-confirming tools, or some merge function to make our address books more efficient?
My idea is that the benefit to those brands wouldn't arise from putting their logos or slogans on said tools (or running entertaining ads next to them), but rather from the behavioral benefits they provide to users. So don't advertise at the fair; help run it?
I'm still not clear what exactly it is you're proposing. If I'm ad agency or the actual client, on what basis should I buy advertising on Facebook or other social media? If I don't use associated keywords or some type of affinity-based approach, on what basis do my ads get served up then? It's hard for me to rebel against this current system if I don't know what alternative model(s) I'm running toward.
Terry, we're in violent agreement...my thinking is that 1) we go to social sites because we get 'value' from our involvement (and give it, too, often), but that this benefit isn't measured or even considered by the folks hoping to monetize those services, and 2) by running the corollary of billboards at the fair, they're missing a bigger opportunity.
You/we transact via these services, and I think those behaviors are the way they're going to live or die over time. The ad model is tangential to it, if not an outright impediment.
The billboard/fair metaphor in play here doesn't work for me -- I don't go to Facebook, MySpace, Twitter or any other social site to transact business or spend money. Maybe if they began to charge $1 (a real dollar, not that virtual coinage) for the "Which Canterbury Pilgrim Are You Quiz?", or required micro-payments to become a Fan of Defenestration, this argument might hold up.
But really, how are these so-called billboards any different from banner ads or pop-ups that appears on "destination sites" like Yahoo, Goole, or MSN? If the point is that this medium offers too little bang for the buck (too little ROI), let's skip the medieval frolicking and say it.
Leland, I really like your 'voluntary' pricing approach. The ad model is based on exploitation of passive viewers, just like in the old days of mass media. The mechanics are more active and convoluted, but the outcome is the same: distraction.
I wonder what will replace it, as the the value of the networks emerges from the activities of participants, not in exploiting their presence.
David, thanks for your comment, and you dimensionalized my point far beyond (and better) than I'd stated it.
The fundamental question is really two-fold, right? First, would people pay for the easy entertainment they now get via Facebook/et al and, second, what could social networks provide that would warrant payment if entertainment didn't suffice?
Ultimately, someone pays, as you pointed out, and right now the presumption is that those ad exposures are worth it. I don't think they are, or will be, over time. But I'm fascinated by what could take their place...
The 'fair' model would be interesting to explore in more detail, which I think I'll try to do via my posts. Will place matter? Relevance/utility of content? Are 'transactions' already occuring between individuals who trade chatter or entertainment content, only it's not monetized in legal tender?
I love the example! Sometimes we get caught up and think that we are dealing with new challenges. As you explain, fee versus free has been a challenge through the ages.
When you visit Facebook for some entertainment or look upon the "peasant to dip his face in the mud" the bottom line is somebody has to pay.
At the fair the options were
The visitors paid a fee to the mud covered peasant
A shopkeeper paid the peasant to jump in the mud in front of his booth to attract a crowd or maybe the peasant was paid to talk, while jumping in the mud about the wonderful food available from and the shopkeeper
The visitors paid a fee to attend the fair and the fair paid the peasant
From the fairs of days gone by to the online electronic fairs - the issue is the same, somebody has the pay the piper!
Right now the consumers are really enjoying getting Twitter and Facebook for free! However, some like you are getting tired of paying via advertisements (eyeballs). The challenge for Twitter and Facebook is what happens if they take away the ads and charge for content - how many folks hated the ads that much?
This is an excellent concept, particularly if the 'advertiser' is providing a service at the 'fair' that is within their realm of expertise. Examples that come to my mind are Apple iTunes providing user-appropriate background music for chat rooms and IMs (maybe taking into account the ages and subject matter being discussed), Toyota providing the virtual car in a vacation virtual reality, Citigroup handling the virtual money transactions on game sites, and the like.
Like booths at a fair, however, participation has to be voluntary... and the services provided by the booths have to be so good that people WANT to go to the booth.
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M2M: Rise of the Machines? Not Yet David Weldon In the 1970 science fiction thriller Colossus: The Forbin Project, two giant supercomputers from the United States and Soviet Union secretly join forces to take control of the collective nuclear might of the two countries. In the film, the two machines discover each other's existence, communicate back-and-forth, share their collective data, and cut their human creators out of the process. It is the ultimate example of machine-to-machine communications, or M2M. CLICK FOR MORE
M2M: Rise of the Machines? Not Yet David Weldon In the 1970 science fiction thriller Colossus: The Forbin Project, two giant supercomputers from the United States and Soviet Union secretly join forces to take control of the collective nuclear might of the two countries. In the film, the two machines discover each other's existence, communicate back-and-forth, share their collective data, and cut their human creators out of the process. It is the ultimate example of machine-to-machine communications, or M2M. CLICK FOR MORE
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