03 Dec 2008

Will We Ever Find A Way To Monetize Social Networks?

Everyone’s on the hunt to find a way to monetize social media.

Or at least that’s what we hear.  We hear about the networks themselves trying to make money. The advertisers looking for ways to pad their pockets. But what about users? What are their thoughts on what’s being done to their social networks? Has anyone thought to ask them?

I was reading the Bruce Clay blog last night and noticed Virginia Nussey’s post asking if social media can really be monetized. Virginia references a New York Times article that talks about the failure social media sites have had trying to monetize and how new programs like Facebook Connect may open new doors. She mentions TimesPeople, the new application from The New York Times, that tells Facebook what Times readers are doing on their site. If you’re an advertiser or someone who benefits from third-party information, Facebook Connect is royally awesome.

It’s awesome because it means that the sites can serve up more targeted ads, ads that people will actually click on.  Facebook Connect means Facebook gets to hand over a packet of information to partner companies telling them all about who you are on the Web. They’ll know what sites you like, what you do on those site, which sites you don’t like, what topics you like, etc.

But what about if you’re not the person benefiting from this information? What if you’re just a normal social media user who opts into Facebook Connect because they think they’re supposed to and in return now you have a little man looking over your shoulder reporting to the world what you just did on the Internet? Do social media users really crave this kind of openness?

I’d venture to say that most of them do not. I asked my friends their thoughts on blurring the line between private and public and most would prefer that their actions not be broadcasted. They want what they do on Digg to stay on Digg and what they do on Facebook to stay on Facebook. They don’t want people knowing what they just watched on Hulu or that they just tagged a new batch of photos. It’s intrusive. It makes them uncomfortable. And, of course, they have no idea how the information is being passed.

And I know you’re looking at me like I’m crazy. They should want this! Who wouldn’t want to tell their Facebook network what they just submitted to Digg or what video they’re currently watching? That’s what social media is about! But you need to realize that you’re not normal.

If you’re reading this social media post on this Internet marketing blog, you are not a normal person or a normal social media user. You are more knowledgeable about the way things work on the Internet than most people. So it’s not up to us to decide if things like this are okay. It’s up to social network users.

I’m 26 with friends in their mid 20s and a bit older. I can tell you that they live their lives in social media and don’t know anything about their privacy options. I have a brother who is 21 and a raging Apple and social network fanboy. He has no idea the amount of information he’s giving up.  Programs like these scare me for him because of the privacy concerns they’ll create.  Facebook assures us that users will be able to control their personal information and how it is shared across sites, but you can only control it if you know the controls exist.  When I asked my little brother how to restrict his Facebook privacy settings he looked at me even stranger than normal. The truth is that most social network users don’t know.

Personally, I like my life connected. I’m the same person on Facebook that I am on Digg that I am on Hulu that I am on Twitter. I talk to the same types of people, I say the same sort of things void of any Lisa filter. But there are lots of people who are not that way. People who have separate business and personal lives.  They don’t want to be combining these worlds.

I think in our excitement to monetize social media, we sometimes forget about the normal people. We forget that not all users want their lives and actions to be an open book. They don’t want an open Web. They want a Web where they can be different people and live different lives. They want a Web that makes them feel safe. They want to interact with a site that lets them feel sheltered.

And that’s not Facebook’s problem, but it is something that will impact whether or not users adopt this program. As awesome as it may be on paper for advertisers and the networks, if users are horrified by it, you’re not going to be able to monetize anything. If you make privacy something users have to work for, instead of something you give them because you care about them, I think you’re messing with the core of what they loved about you.

Comments

  1. Jack - eyeflare travel advice December 3, 2008 at 2:19 PM

    The better question is whether social media should be monetized at all? As in, should there be personalization on the sites? Should users’ information migrate?

    We as marketers need to be careful not to embroil ourselves in even more controversy than we already have. Online, so far, we’re more respected than the offline advertisers of things such as High Fat High Sugar foods or cell phone ring tones. But if (ok, so that’s a big if looking at most internet users’ awareness) users begin to realize and object to how their personal information is being used, we’ll be seen as the ones being evil.

    I actually really don’t think we should try to monetize and leverage this information. Those of us who have a spectacular enough product and story will reach our target markets by virtue of simply engaging our targets openly. No need for stalking!

  2. Lisa Barone December 3, 2008 at 2:37 PM

    Jack,

    I actually agree with you completely. I don’t think social media sites should be monetized but I’m pretty sure people will throw rocks at us for suggesting that. :) I think companies run a lot of risk when they walk into someone else’s room and start trying to sell to them. It’s a careful line, indeed, and one I’d rather not see drawn at all.

  3. Pink December 3, 2008 at 4:21 PM

    I’ve never understood why they aren’t able to monetize. How difficult would it be to slop some Google Adwords on their site? It seems like they are afraid of placing some ads on their site.

  4. Will December 3, 2008 at 7:27 PM

    Remember what happened that caused the first bubble first? Sites with unproven business models kept getting more and more money, falling deeper and deeper into the red. The companies receiving the money blew it on lavish expenses and unnecessary employee perks. Boo.com was a great example of this. It’s really hard to look around the social network start-up scene and not say that history is repeating itself. There are LOT of lavish expenses for companies that haven’t turned profit.

    http://valleywag.com/5070144/the-facebook-layoffs

  5. Lisa Barone December 4, 2008 at 6:55 AM

    Pink: I think it’s a bit more difficult than that. A social network isn’t “just another site”. It’s more personal. Users expect the experience to be more personal. You’re also dealing with a smarter audience, an audience who has been trained to block out ads and anything else that doesn’t “belong”.

    I suppose the reason they haven’t figured out how to monetize on social media is the same way we haven’t seen wide-scale advertising on mobile devices. Similar issues apply and advertisers can’t seem to figure it out.

  6. Matt Johnson December 4, 2008 at 8:38 AM

    Lisa,

    I agree with your reply to Pink. The solution is an advertising model that puts users in complete control of the advertising process and their privacy settings. By doing so, advertisers win because their brands are injected into the online conversations of the users on social networks.

    We’ve designed this system and will launch it in a few months. It’s called uVizz and it’s nothing like anything that’s ever been used on social networks.

  7. Ryan @ Linkbuildr December 4, 2008 at 9:51 PM

    The CEO of Twitter recently said they’ll be launching a new and unique way to monetize Twitter and frankly it has me stumped. Since the majority if these users are banner blind and even text blind I’m quite interested to see what they do.

  8. Online Marketing Blog » Blog Archive » Friday Recap December 6, 2008 at 12:16 AM

    [...] monetization saw some increased interest in the SEO blogosphere this week, as Lisa Barone of We Build Pages and I both dedicated some time to the topic. If social networks can’t bring the money in, at [...]

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