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How to monetize social media

How to monetize social media Tom Hespos

Whoever said that the media business was about re-aggregating fragmented audiences probably knew what they were talking about.


As an internet user, one of the most frustrating things about social media is its lack of interoperability. Facebook and LinkedIn do a good job of helping me keep track of and develop my social network, but aside from some apps that will let me import my contacts from one to the other, the two networks can't be used interchangeably. 


Similarly, social news sites like Digg, reddit and StumbleUpon work in a vacuum. If I have a profile on one, it doesn’t update the other. So anyone who wants to see what I post to any of those sites would have to look me up on each.


Fragmentation exists across many categories in the Web 2.0 world. RSS aggregators, blogs, photo galleries -- you name it. These things tend to operate in a vacuum and attract their own user bases. These user bases may duplicate to one extent or another, depending on the application and the need it fulfills.


Whenever a disruptive technology pulls audiences apart, something new emerges to try to pull things back together. Aggregators like FriendFeed may just represent the glue that holds the Web 2.0 world together.


FriendFeed essentially lets people see what their friends are doing online, much like social networks like MySpace and Facebook do. The difference between it and a run-of-the-mill social net, however, is that it's fairly platform-agnostic. Sign up on Friendfeed and tell it all about the social media apps you use, and it will aggregate your actions within those apps, making it easy for your friends and legions of fans to follow what you're doing and see the things that you find interesting online.


FriendFeed has a model something like that of Twitter. Users follow their friends, and whenever they check in with FeedFriend, they can see their friends posting stories to Digg, photos to Flickr and musings to their blogs. And if your favorite friend uses these services but isn't yet a FriendFeed user, you can still follow their activity by creating an "Imaginary Friend" -- a sort of placeholder representing that person's social media activity.


To me, this is where it gets interesting. People follow the people who are interesting and influential to them, so aggregators like FriendFeed will attract users quickly. And where there's re-aggregation, there's an ad opportunity.


But there are two caveats:



  1. I have no idea what FriendFeed's business model is. I'm speculating here.

  2. It will be a crying shame if FriendFeed gets peppered with untargeted advertising.

There. Now here's my assessment of the company's opportunity.


FriendFeed aggregates many important data points about lifestyle and interest. Thus, it could become a very powerful behavioral marketing play. This wouldn't be the place for demographically targeted brand advertising, or for FreeCreditReport.com to whack prospects over the head with direct response ads.


It would, however, be a good place for ads targeted by interest. Perhaps when someone reads that a friend posted a link to a product, or commented on a story about said product, or otherwise interacted with it, there would be an opportunity for a targeted online ad, once FriendFeed observed an interest in it.


For instance, if Jim Meskauskas twittered a link to a blurb about the new season of "Battlestar Galactica," and I followed that link, I might start seeing ads for tune-in in my feed. In this way, targeted advertising would not only be able to inform, but it also could amplify viral effects, and we could avoid much of the criticism of online ads by steering clear of the shotgun approach. 


I see an interesting ad play here, provided it's managed such that the ads are kept relevant.


Tom Hespos is the president of Underscore Marketing and blogs at Hespos.com.

Tom Hespos is President of New York agency Underscore Marketing. He is a frequent contributor to industry trade publications and has been writing a regular column about online marketing and advertising since March of 1998. His clients include Wyeth...

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Comments

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Commenter: Catherine Mcquaid

2008, April 11

Hi Tom;Your level-headed take on monetization helped frame the monetization question for me.I'm developing a B2B project for new customer acquisition using social media. Might you have a moment to chat?Catherine [email protected] 923 0877

Commenter: Miha Privsek

2008, April 11

Great article Tom!!"I see an interesting ad play here, provided it's managed such that the ads are kept relevant."OTX's new platform is in my opinion a step in right direction form technical standpoint - increased relevance can be provided, the question is whether or not it provides marketers with yield that they are used to get nowadays? If there is any logic in behavioral targeting the answer is YES ;))