A new wave of networks are creating exciting behavior marketing trends.
The new crop of social network services represents a significant behavior marketing trend with potential that exceeds the current fascination with search marketing. The social network category, while still nascent and the business models -- i.e. how they’ll make money -- unclear, offers several competitive and differentiated approaches to helping people connect, communicate and build communities across varied and distinct interest groups.
Most people are familiar with Friendster and Blogger (now owned by Google). Since their appearance, numerous others have popped up on email invitation lists. They represent varied approaches that can be defined as follows: consumer/business hybrid, business, enterprise and art/creative communication.
Six degrees of separation is the driving principle
Computing power and connectivity enables a rich networked community. Remarkably, some accomplished social networkers have literally thousands of connections in their address books. It’s difficult to understand how all of those connections could be trusted and valuable colleagues.
The social network category at times appears to smack of a huge multi-level marketing pyramid, but experience with the ones highlighted below indicate good intentions and safeguards by their company leaders. The following companies represent an evolutionary step from a pure-play consumer focus. Below are general observations of some social network services and their relative values.
Consumer/business hybrid: Tribe and Ryze both offer general networking possibilities across diverse interest groups. I appreciate that the company founders are attempting to position their services for business networking, but I just didn’t see as much value in this category.
The interest categories from a business perspective become so narrow, or create your own, that it’s hard to see as much value in the higher end business space. For example, I’m developing a professional services business and I received contacts for selling shampoo from home. For consumers, there are lots of interesting people and exciting communities, especially if you’re into sharing personal information, pictures, etc.
Business: LinkedIn offers the most professional networking community observed. It is definitely oriented toward organizing professional contacts by industry, function, geography, and areas of interest such as deal making, and job search. Senior executives, VP, C-level, entrepreneurs and VCs are prominent in the network. The profile summary and endorsement areas are great ideas.
Spoke appears focused on business development and lead generation. I'm not as familiar with this one, but it doesn’t appear as well developed as LinkedIn.
Enterprise: If a company struggles to manage its customer leads and relationships because the sales force frequently turns over, then Visible Path is an option. Visible Path’s sales productivity applications help an enterprise manage its relationship network of customers, prospects and leads. The company’s solutions link to an enterprise’s sales force automation, CRM and business intelligence programs.
Art/creative communication: Netomat is different from the others. The emphasis is on creative-oriented collaboration versus networking connections. In the company’s words: "A netomat is your own collaborative Web page that you can use for back-and-forth communication with family, friends and colleagues. Post text, photos, drawings, play games and more! Create Web pages in a tech-free and fun way…"
Collaboration involves people in creating netomats, which encourages individuals to subscribe.
The service usage and functionality evolves as users find new applications. I’ve been using netomat for both personal and business uses, e.g., picture album displays, business white boards and client surveys.
There’s a free trial version, and ugraded services are $3.95 monthly or $23.95 annually. In the future there will be multi-media versions available on wireless devices such as mobile phones. (Disclaimer: netomat has been a client of the author.)
Social network business model
In each category, it’s obvious that the services equate joining with some value proposition. Many are still in beta and reasonably well funded by VCs. The business models will likely depend upon generating subscription, use fees and/or advertising revenues. Gauging the adoption and retention rates of theses services as they transition from free to pay will be indicative of their long-term viability.
Admittedly, it’s easy to get hooked on some of these once you’re connected. Of course, that’s the idea and naturally there are no company guarantees you’ll achieve what you want from joining, i.e. the perfect mate, better job, or new business. Success is directly tied to how good a networker you are!
The companies actively promote signing up your friends and colleagues because the more connections the better your chance at whatever success you seek. It’s a perfect business model circle. The companies get more users to create bigger numbers of customers to sell to, and users scramble to add more connections to their address book.
I’ve approached social networking with fairly modest expectations. At a minimum, these services offer a great virtual rolodex to keep track of people who are constantly on the move. On a bigger scale, they could represent the next golden marketing platform.
Peter Klinge, Jr. is president of Klinge & Associates Idea Marketing Consultants ©. His organization’s mission is to help companies to grow sales and strengthen customer relationships through the development and implementation of Breakout Ideas™. From 1997 to 2003, Klinge held various senior posts with Euro RSCG Worldwide, most recently as chief marketing officer and global business development director.