In Louis Gray‘s latest post on the Valuation of Twitter he states:
“Twitter will find a business model. It will very likely include some form of advertising, even in a tough economy for ads.”
The only reason it is a tough economy for ads is that most advertising is not targeted correctly. Many pay per click engines are intentionally selling poor quality traffic. That traffic does not generate any sales. When advertising doesn’t convert eventually advertisers WILL quit buying it!
There is a simple solution that every Social Networking site – including Twitter and FriendFeed – could implement without an enormous amount of difficulty. All that is necessary is to keep these points in mind:
- Only targeted advertising converts!
- Buying advertising that does not convert is a waste of money.
- Therefore, only offer ad placements that are very specific to what is being offered.
Am I the only one who sees the elephant in the room when it comes to monetizing any Social Networking site? StumbleUpon almost stumbled upon it but eliminated it when they got bought out. Here are Nine Reasons to Monetize Social Networking with Targeted Advertising:
- The big money is in advertising.
- The best advertising CONVERTS.
- The REASON it converts is that it is RELEVANT to those who see it.
- SOLUTION: Use data mining to pull existing activity into pages targeted to specific niches.
- Provide an easy way for your users to get to that niche information.
- Offer advertisers ads that appear ONLY on the specific pages most related to what they want to advertise.
- WIN ONE: Users get to find out about products and services related to their favorite interests.
- WIN TWO: Advertisers get to reach those who are most likely to buy from them.
- WIN THREE: Social Networking services become as profitable as Google AdWords.
Using a combination of algorithms, tags, data mining, and allowing trusted users to edit incorrectly placed information while they’re using the site could be implemented.
Social Networking sites can start offering what all businesses want and need: a way to reach their potential buyers while STILL providing their users with a quality experience BECAUSE people do NOT mind advertising they’re interested in – only advertising they do NOT want to see!
Everyone hates to be SPAMMED. Everyone hates “junk” mail which they define as anything they’re not interested in. Products and services related to what we love doing are not considered SPAM or JUNK.
RELATED POST: Social Networking Sites are Missing The Monetization Golden Goose
3/22/09 UPDATE: Steven Hodson wrote a post about Having a Problem With All This Social Media Crap that generated much discussion about the value – or lack thereof – of all the time spent on Social Networking. I made several comments in that thread including this one below which is related to the topic of THIS post:
The reason it takes so long to get minimal benefit from Social Networking is that none of the popular Social Media sites are providing content in an easily usable form. StumbleUpon almost did it right before they were acquired and then got rid of the most valuable content they had!
What SU had was pages based on keyword tags. Each tag had a page that showed the most popular shared sites for that tag based on clicks, reviews, and readers voting them up. It also showed the users who shared the most valuable content on that subject.
IF you knew how to get to those pages (it wasn’t that obvious) you could quickly and easily find the most knowledgeable users on that subject. Say you had questions about Ubuntu – you could go to the Ubuntu page and find the most valuable resources about it AND connect with someone who could answer specific questions.
THAT is what Social Networking is missing. Yes, there are search functions at Twitter and FriendFeed but that is not nearly as useful as using the power of computers to organize and present content in an easy to use way. The first Social Media site that finally gets that right will require far less time and give far more back!
When they do they will not only be an awesome resource for users – they will also provide what every small business needs and what will be their Golden Goose of monetization – a highly targeted niche audience. Ads there will convert and advertisers will line up to buy them. This is precisely how Google makes most of their money and how these sites should too!
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Interesting topic since it involves all of us and we’re all looking for monetizing. I strongly agree with the three win win situations discussed in the article. The users definitely have more options and at the same time helpful in narrowing the options of choosing the best service.
Twitter: matthewacoleman
June 17, 2011 at 3:17 am
advertising if done the RIGHT will will yield positive as well a good money. this post has a lot of great ideas.
wny glass block windows would love you to read ..Glass Block Window Showers
Good article. I agree with you that the most important thing is that an offer is targeted to a potential buyer. There’s absolutely no good in sending 1 million visitors to a page if they are absolutely not interesting in the product. If people are able to target their customers well then conversions will increase and their entire advertising campaign will have more chance of success.
.-= Joey @ Kids Iron Man costume´s featured blog ..Privacy =-.
This is a nice blog with very informative articles! Thanks for sharing the ideas. I learned a lot from here. Anyway, just to share on one of the most overlooked ways to drive traffic to your website. Try offline advertising. For example, I’ve had great luck with postcards, display ads, classified ads and recently radio advertising, which I am finding very interesting for driving qualified leads to my business.
Definitley agree with the general theme of the post, but can no way believe that win 3 (“Social Networking services become as profitable as Google AdWords.”) is realistic. In my years of experience in online advertising, straight AdWords (i.e. search only, no contextual matcheing) offers the biggest ROI, and facebook one of the worst. Users are specifically in a “looking for product/info” when using search engines, whereas they’re performing a differnet function when using social media sites…
My two cents worth
.-= ronan@luxury travel´s last blog .."The Beach Boys of Yenagoa" by Pelu Awofeso =-.
Twitter: GrowMap
December 11, 2009 at 12:24 pm
Welcome Ronan,
I agree that as Social Media sites are currently structured that advertising on them is never going to be as effective as search. There is no reason, though, that they can not provide their own search function along with their own ads.
When you can easily search for and find recommendations and reviews from your peers on Social Networking sites and advertisers can position their ads on the results of those searches in exactly the same way AdWords works today users will stay on their favorite Social Networking site instead of switching to a search engine.
There is also one kind of contextual ad that can convert even better than search. That is placing ads for a specific product next to a review or recommendation of that specific product – especially when it is is new and not widely available or it is being heavily advertised.
.-= Internet Strategist @GrowMap´s last blog ..Are You Playing Hide and Seek With Your Market? =-.
Twitter: BTL_Mortgages
July 1, 2009 at 5:43 pm
I also believe that advertisements should be relevant to the audience, otherwise they will be ignored and annoy visitors. However, we have noticed that adverts don’t perform well on forum, they tend to be ignored, people are reading topics, write replies, but they are not very interested in adverts.
Twitter: GrowMap
July 19, 2009 at 11:25 am
Hi Kate,
Ads displayed in forums would be considered content ads and those will never convert as well as search ads. In the first case you get curiosity clicks and in the second someone is actively searching for a specific product or service.
They could convert well IF the topic being discussed in the forum is how to buy something or what specific solutions are most viable AND the ads were displayed in the thread, triggered by a system that uses semantic search to insert related ads at the appropriate points in the discussion.
I have not yet seen a system like that; however, I have recently seen a semantic search called TipTop that pulls accurate related information from Twitter.
What forums, blogs, and Social Networks must do is create optimum opportunities for adds. For example, they could write posts announcing new products in their niche and feature ads for that product within or in close proximity to those posts. That will convert well – possibly even at a higher rate than search.
.-= Internet Strategist @GrowMap´s last blog ..How to Add Your Free Business Listing to infoUSA =-.
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