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![04 The Case of the Facebook Fairy
Social Networks are a source of information for everyone.
They are comparable to elephants – they never forget...
[Intern at a US Bank]:
“I just wanted to let you know that I will not be
able to come into work tomorrow. Something
came up at home and I had to go to New York this
morning for the next couple of days.”
[Boss]:
“Thanks for letting us know–hope everything is
ok in New York. (PS: cool wand)”
Ralf Ahamer – CMO XING AG](https://image.slidesharecdn.com/xing-100325083507-phpapp01/85/Xing-9-320.jpg)
Uploaded byiStrategy
Ralf Ahamer, CMO of XING AG, presented on making money from social networks using XING as an example. He showed XING's growth in members and revenue. XING's business model includes premium memberships, recruiting services, and advertising. Social networks provide value by connecting people and information. They have become popular channels for communication and are shifting reach away from traditional portals. Both opportunities and risks exist for companies using social networks, including generating revenue from subscriptions, advertising, and virtual goods. Success requires clear goals and topics for communities as well as engaged members and activity.
- 1. iStrategy Forum Berlin Make money from social networks – example XING Ralf Ahamer – CMO XING AG
- 2. 01 XING inNumbers (I) Members in mio. Premium Members in thousands. 36% 41% 662 635 8,3 606 7,9 550 7,5 513 7,0 6,4 470 6,1 Q2 08 Q3 08 Q4 08 Q1 09 Q2 09 Q3 09 Q2 08 Q3 08 Q4 08 Q1 09 Q2 09 Q3 09 Ralf Ahamer – CMO XING AG
- 3. 02 XING inNumbers (II) EBITDA in Mio € Umsatz in Mio € 37% margin 12,9 * 35,3 6,9 19,6 2007 2008 2007 2008 * Excluding one-off costs for M&A Ralf Ahamer – CMO XING AG
- 4. 03 Business Model The XING Business Model consists of three main revenue streams: Premium Membership, Recruiting Business & Advertising/ e-commerce. 1. Premium Membership Recruiter Membership 6,95 € mth. 3 Months 29,95 € mth. 3 Months 5,95 € mth. 12 Months 39,95 € mth. 6 Months 4,95 € mth. 24 Months 49,95 € mth. 12 Months 2. Job Board: 0,59 €/ Click on Job Ad Fix-price 395€, 495€ , Corp sol. 3. Advertising/E-commerce Various models, Best Offers, Enterprise Groups, Opensocial Ralf Ahamer – CMO XING AG
- 5. Social Networks –What? Why? Value? 5 Ralf Ahamer – CMO XING AG
- 6. 01 Social Networks Social networks don‘t create something new – they just provide an infrastructure for typical human behavior on the web. Ideas Jobs Contacts Employees Me Efficiency Productivity Friends Love Spare time Ralf Ahamer – CMO XING AG
- 7. 02 Social Networks Social networks don‘t create something new – they just provide an infrastructure for typical human behavior on the web. Ideas Jobs Contacts Employees Me Efficiency Productivity Friends Love Spare time 7 Ralf Ahamer – CMO XING AG
- 8. 03 Social networks– professional vs. private Almost 80% of experts and management clearly separate business from pleasure Spare time Acquisition Family Deals Dating Jobs Party Sales Friendship Ideas Source: Forsa Study 01/ 2010 Ralf Ahamer – CMO XING AG
- 9. 04 The Case of the Facebook Fairy Social Networks are a source of information for everyone. They are comparable to elephants – they never forget... [Intern at a US Bank]: “I just wanted to let you know that I will not be able to come into work tomorrow. Something came up at home and I had to go to New York this morning for the next couple of days.” [Boss]: “Thanks for letting us know–hope everything is ok in New York. (PS: cool wand)” Ralf Ahamer – CMO XING AG
- 10. Social networks inreal life 05 Ralf Ahamer – CMO XING AG
- 11. 06 Viral Gene:Social Networks The virality lies in the added value that every additional member brings to the community. The viral growth in social networks is a function of: the added value a member gets through another member. Ralf Ahamer – CMO XING AG
- 12. 07 Value ofsocial networks The value of social networks heavily depends on two values: number of members and activity. Value social Registered network = Members X Activity If one of these is zero – the whole value is zero! 12 Ralf Ahamer – CMO XING AG
- 13. Shift of reachto social networks 13 Ralf Ahamer – CMO XING AG
- 14. Social Communities –a success story 01 • „Republic“ Facebook is the 4th biggest country behind China, India and USA. 300.000.000 facebook users change their status message every day. • In the last 60 seconds 15 hours of video material has been uploaded onto youtube. If you add all videos material together it equals 3.500 years of content (and growing) • Twitter had 1000% growth last year Source: Sueddeutsche.de 19.09.2009 Ralf Ahamer – CMO XING AG
- 15. Social Communities –a success story 02 Search queries reflect demand Google Search queries reflect trends … Facebook vs. eBay Facebook vs. Spiegel Source: Google trends: Graph above shows search queries worldwide. Graph below shows search queries in Germany Ralf Ahamer – CMO XING AG
- 16. Social Communities –a success story 03 Back in time 2006 vs. 2009 (1/2) IVW Page Impressions October 2006: Portals portals everywhere… Source: IVW, Page impressions x1000 for October 2006 Ralf Ahamer – CMO XING AG
- 17. 04 Social Communities – a success story Back in time 2006 vs. 2009 (2/2) IVW Page Impressions October 2009: Invasion of the social networks Source: IVW, Page impressions x1000 for October 2006 Ralf Ahamer – CMO XING AG
- 18. 05 Reach ofXING On XING there are up to 25% of all employees of one industry in Germany. Source: XING internal statistics for DE– Q4 2008 Ralf Ahamer – CMO XING AG
- 19. 06 Usage ofSocial Networks Social Networks are already the 2nd most popular entry point to the web Internet Usage Frequency Podcasts: Micro-blogging Sites: Social Book-marking Communities: Brand Communities: Special Interest Communities: Photo-Portals: Video-Portals: Web-blogs: Forums: Social Networking Sites: Search engines: Everyday Several times / week Several times / month Seldom Never / I do not know No Answer that Source: Ralf Schengber, 2009. Ralf Ahamer – CMO XING AG
- 20. 07 Social Networks– Context to information Our Friends, colleagues, family give context to massive information overflow. Why bother “Google”…. ..when your peers are just a click away? Unidirectional Bidirectional instantaneity (search function) (comment & tweet features) Volume Value (search results) (recommendation power) Standard Personal (Portal site) (personal profile site) = where information ACCUMULATES. = where information LIVES. “The cold Internet” “The warm Internet” Ralf Ahamer – CMO XING AG
- 21. 08 Exkurs: CommunityMake or „Buy“ or both ¾ of all brand communities fail. Using existing social networks & infrastructure could lower costs and increase speed. - Over 2k Ikea employees on XING.com - Over 90k users are fans on facebook Ikea community „Hej“ recently started Ralf Ahamer – CMO XING AG
- 22. Chancen und Risikenbusiness Social networks and von Social Networks für models Unternehmen 22 Ralf Ahamer – CMO XING AG
- 23. 01 Subscription fees:Professional Networking Professional Networks have a huge (perceived) value that directly translates into “money”. Members are willing to pay for that. Consulting Media -Print Internet and New Media Real Estate Sales Public Relations Arts and Entertainment Science and Research Telecommunications Hotel and Travel Training Media - Broadcast Education Human Resources Advertising Restaurant and Food Financial Services Beverage and Tobacco IT University Customer Services Source: >82k tests on mynetworkvalue.com Accounting Ralf Ahamer – CMO XING AG
- 24. 02 Advertising: Web2.0 in the marketing mix The value chain of media planning must be disrupted. New scales of ratings need to be defined. 88-92% 100% 7-12% 30% ca.60-65% Kickbacks Advertising Advertiser Media Agency Publisher medium Results: • Marketstructure and value system constrain marketing • Advertisers have (too) little Know-How for Web (2.0) • Media Budgets go mainly in “traditional” online media Ralf Ahamer – CMO XING AG
- 25. 03 Virtual products The expected market size of virtual goods (US) is 1,6 Mrd $*. Social games share will be half of it. - 90 Mio $ in 2009 with virtual gifts** - 65.000.000 Farmers*** - 26.000.000 are feeding their cows every day for 2 hours - 100 Mio $/year revenue* *Source: Business Week *Inside Virtual Goods - The Future of Social Gaming *** check on facebook feb 2010: 78Mio already ** C’t Magazine 2010 Ralf Ahamer – CMO XING AG
- 26. 04 Conclusion 1. Clear goal and topic for your community • „Having influence on your target group“ as a goal leads you in the wrong direction • Set-up a clear topic for your community – e.g. “Professional networking” 2. Members and Activity • Value of a social network = registered members X activity • Viral growth in SN = function of value a member gets through another member 3. Keep in mind: First of all - your community serves its members • Consequently listen to the community and serve their needs first • See the community as living organism – it’s a socio-psychological challenge 4. Use existing infrastructure and reach • Use XING, facebook etc. to leverage your business • Community work needs resources in your company Ralf Ahamer – CMO XING AG
- 27. Thank you for your kind attention! Presentation Titel | Author | City, 11/02/2010 27 Ralf Ahamer – CMO XING AG