ADTELLIGENCE White Paper: Monetizationof strategies and business models for Social Networks
by Michael Altendorf, Entrepreneur, CEO at ADTELLIGENCE GmbH on Dec 27, 2009
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Within the past two years, the amount of social networks and online communities have grown faster than anything else on the Internet and the number of people associated with those networks continue to ...
Within the past two years, the amount of social networks and online communities have grown faster than anything else on the Internet and the number of people associated with those networks continue to dominate the Internet space. Unfortunately, almost all social networks today continue to endure very high costs with very low monetization rates. Monetization occurs directly (through monthly subscribers, “Freemium”, or virtual-goods models) or indirectly. Mainly through advertising based business models and first attempts to include e-commerce. Only vendors in Asia and some western platforms started to implement a virtual economy with goods and currency.
Most Social networks are today unsuccessful in their advertising strategy because they target an enormously large mass of heterogeneous users. First-generation targeting models (including semantic, contextual or behavioral targeting) don’t help either because these models are not tailored to the needs of social networks.
Social Profile Targeting leveraging the (demographic, interests and geographic user information), on the other hand, is built around the information within user profiles, users’ connections to other users, and the data entered by users themselves – to provide more exact data to reach target audiences.
ADTELLIGENCE offers exactly this kind of targeting technology, which provides an interface between individual user profiles and classic target-group descriptions. Through a simple user interface based on newest Web 2.0 technology, advertisers can easily define their target audiences / groups and in real-time, get reports on the success of their campaign and target delineation. ADTELLIGENCE’s targeting technology not only helps increase advertising revenue for social networks, but can also be used to implement other effective revenue channels like ecommerce, gaming monetization or marketing intelligence, social media monitoring and web analytics.
There is not just one perfect, “universal” business model for social networks, but nevertheless, the best business model will always be a mix of different approaches that can continuously be developed and combined. The users will decided which model they like. Ask them, they will tell you what they want, to deliver user generated content
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