The golden rule of sales is to understand your target market. As social networks are dynamic, the level of complexity in monetizing social networks proves to be quite high. Each network is different from the other.
5 different concepts to monetize social networks can be:
1) Ads – or, the interesting content problem
The poor state of advertising in social networks is widely reported. Users don’t click through ads, rates are depressed. What could be the problem? The problem, simplistically is in the nature of the medium. The audience on social networking sites comes for fun and relieving stress and interact. Purchasing anything or work issues are the last thing on their mind
We click on ads for a number of reasons: one reason is distraction. As we transverse the web and encounter different content, advertising often serves as a contextual escape. We grow tired with the same content, so we exhaustively explore a topic – so we then click on ads. The problem with social networks is that the users of social networks fail to tire of the content.
A social network is largely based around responsive actions like answering messages, posting on walls, accepting and rejecting requests) and experience (browsing and finding new people and content). Here it is difficult to distract us – the antics of our friends’ networks are vastly more valuable than time spent exploring advertisements. Nothing can be more interesting than peer-produced content – and thus ads fail to grab attention of the audience.
2) Product affiliation groups – the scalability problem of affiliation
Contextual ads don’t grab our attention so advertisers will leverage our consumer culture to let us “befriend” products. The logic is that young people are possessive to a great length about their identity construction to their materialistic possessions like cell phones, belts, bags among others
Our possessions – things we want and things we own – are part of our identity. This is what basic marketing is all about. The theory behind befriending products is it lets us explicitly state our brand affiliations. You may not know what type of jeans I wear, but if I befriend Gucci bags, you can see my affiliation with the brand. The problem with affiliation is in its lack of scalability.
Indeed, part of our consumption is consumption of identity goods – but the majority of our purchases are must more usual. The food palette, the toiletries, the tyres we put on our car – we don’t derive a large part of our identity from these goods. It is unlikely, then, that many people will care to befriend spectacles or wallets.
Affiliation is non-scalable doesn’t mean it can’t be profitable – sites that target a demographic can niche in to that demographic’s product desires. It can even be less explicit – when you friend John or Kane on Facebook, you’re joining that product affiliation group, the only problem is Facebook isn’t getting part of the cut.