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Bus450 Social Media Monetization


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Bus450 Social Media Monetization

  1. 1. SOCIAL MEDIAMONETIZATION#BUS450 SPRING 2012 Larissa, Prianka, Katherine, & Mackenzie
  2. 2. Agenda1. What is monetization2. Why monetization?3. Market growth and scalability4. Traditional offline media monetization5. Online monetization6. Social media monetization frameworks  Subscription  Freemium  Virtualcurrency  Advertising
  3. 3. What is monetization?Merriam-Webster Us ―To utilize  To make money. (something of value) as a source of profit.‖
  4. 4. Why monetization?o ROIo Opportunity
  5. 5. Market growth and scalability Social networking is already reaching a maturity stage 2015 predictions:  Growth in Asia  Decline in North American and Europe  Online social networks will reach a monetizable scale of consumer expenditure of at least $200 billion in 16 countries
  6. 6. Traditional offline mediamonetization Mass media  Ex. Television, newspapers and magazines, radio Three-party market  The web extends this model
  7. 7. Online monetization The ―Dot-com Boom‖  Massive investments in startups  Promise of profits  March 10, 2000: Bubble burst Todays boom is different  Tried frameworks and more experience in ecommerce
  8. 8. Video JI
  9. 9. Social media monetizationframeworks1. Subscription2. Virtual Currency3. ‗Freemium‘4. AdvertisingOthers: Sponsored Content Affiliate
  10. 10. 1. Subscription Definition: User regularly pays a set fee to a provider for a service
  11. 11. Subscription Formats:  Selling access  Usage-based quotas  Pay wall (also freemium)
  12. 12. Subscription cont‘dPros Cons Simpler  Content must be More predictable valuable revenue stream  Content must be More committed protected user base
  13. 13. Example: Spark Networks Niche dating websites  ChristianMingle  JDate
  14. 14. 2. Virtual currency Definition: Currency used to purchase virtual goods in various online marketplaces. o Virtual objects, experience, or information o Micropayments
  15. 15. Example: Facebook Credits
  16. 16. Virtual currency cont‘dPros Cons Low cost  Risk No quantity limits  Small payments Virtual economies can be profitable
  17. 17. Example: Second Life  Incorporates freemium but is mostly virtual currency  Free to play, but limited
  18. 18. 3. Freemium Definition: Content, services, and software are available in multiple tiers of use, including a basic free tier.
  19. 19. Freemium: Formats Conversion from free to paid Traditional freemium hierarchy
  20. 20. Freemium cont‘dPros Cons Customers can be  Difficult to switch motivated to pay from a free model Free trial  Must create a need Easily adaptable for premium content model  Need paid users to break even
  21. 21. Example: HootSuite Transitioned from an all-free to freemium model Successful transfer because of loyal user base and added features.
  22. 22. Example: Ning Attempted a freemium model for a niche market Now use a subscription model with different pricing options
  23. 23. 4. Advertising Definition: Content, services and software are offered for free because the advertisers (third parties) are willing to pay for access to customer communities with distinct interests
  24. 24. Advertising formats Pay per click Pay per share Banner ads Sponsored searches Sponsored content Contextual mobile advertising
  25. 25. Advertising cont‘dPros Cons Successful  Need well-defined Provides large target audience visibility  Consumers dislike Targeted ads Pays for content
  26. 26. Example: Twitter Introduced an advertising program in April 2010 Advertisers can choose scale of audience
  27. 27. Comparison All models are linked and rarely is one used exclusively. Subscription Advertising Freemium (optional) Virtual currency
  28. 28. Problems with SMMo Social media is meant to be social, not commercialo Can be unpredictable
  29. 29. Present dominant strategy URL: Ubiquity first, Revenue Later Quantify the value of online social networks
  30. 30. Future directionso Current: not fully optimizedo Short Run: developing strategiesoLong Run: niche markets todominate monetization
  31. 31. Future Directions cont‘d Insight to 2015:  Access to 80% of a $29 trillion market  Highly lucrative markets and scalable opportunity  More targeted and layered marketing campaigns  ‗Double Niche‘ Strategy
  32. 32. Activity – 20 minutes maxo Craigslist started in 1995 and became for-profit in 1999, but has not fully embraced a monetization model.o They support their website and 30 staff members through posting fees for jobs in 18 metro areas, brokered NYC apartments, and therapeutic services.
  33. 33. Thank you!
  34. 34. Sources (Saskatoon), T. S. (2008, June 16). Niche websites help picky singles find love. Retrieved from 51cde4e7e133&sponsor= Anderson, C. (2009). Free: the future of a radical price. Hyperion. Anonymous. (2011, February 19). Twitter. Canadian Business, 84(1/2), 31. Cashmore, P. (2010, July 8). RIP Facebook Gifts. Mashable. Retrieved from Corwin, P. (2009, December 7). Virtual Currencies and Virtual Goods — Definitions and Revenue Streams in Social Networks. How To Start A Social Network. Retrieved March 12, 2012, from Dealbook. (2008, January 4). Parent of Dating Sites Looks for a Match. New York Times. Retrieved from Digital report: Affiliate- the new age of affiliate marketing. (2011).Canadian Periodicals Index Quarterly, 31. FarmVille Freak. (2010). Retrieved from Hootsuite Vs Seesmic: Pros&Cons. (n.d.). Retrieved from Loayza, J. (2009, July 14). 5 Business Models for Social Media Startups. Mashable. Retrieved from Lyons, K., Messinger, P. R., Niu, R. H., & Stroulia, E. (2010). A tale of two pricing systems for services. Information Systems and e-Business Management, 10(1), 19–42. doi:10.1007/s10257- 010-0151-3 O‘Neill, N. (2010). The Secret To How Facebook Makes Money. Retrieved from OmniTI ~ Case Studies ~ Ning. (n.d.). Retrieved from Papworth, L. (n.d.). Social Networks Monetized Revenue. SlideShare. Retrieved from Pascal-Emmanuel, G. (2011, April 8). What Is The Freemium Business Model? Business Insider. Retrieved from Sawers, P. (2011, September 10). The Freemium flaw: The challenges faced by digital‘s default business model. The Next Web. Retrieved from freemium-flaw-the-challenges-faced-by-digitals-default-business-model/ Shukla, A. (2008, December 18). Beyond Facebook Gifts: Virtual Currencies 101. Mashable. Retrieved from Sloan, P. (2005, December 1). The Virtual Rockefeller - December 1, 2005. Retrieved March 12, 2012, from Spark Networks. (n.d.). Retrieved from Tuten, T. L. (2008). Advertising 2.0: Social Media Marketing in a Web 2.0 World. Praeger Publishers. Twitter squeezing ads among tweets. (n.d.).CNET. Retrieved from Virtual Goods Mean Real Dollars - eMarketer. (2009, August 13) Retrieved March 12, 2012, from Datamonitor. (2010). The Social Networking Market Opportunity. London: Datamonitor. Datamonitor. (2011). Spark Networks, Inc.: Company Profile. London: Datamonitor.