Monetising niche social networks
Will, Anna and I are at the Mad.co.uk Social Networking & Media for Business conference today in drizzly London Victoria. I get extremely fidgety if I am made to sit and watch presentations so I’ve ducked out for a bit to write this. Hope Will doesn’t take offence as I think he’s speaking right now. I’m sure he’s entertaining everyone :)
There was a useful take-home idea from Matt Jerwood (wayn.com) about how they are monetising their social network for travellers. Obviously there’s the usual advertising stuff, but I thought it was quite interesting that they have ditched their original Fremium model (where you can have a free wayn.com account or pay a subscription for some extra features and bells and whistles on the site) to a model where everything on the site itself is free to all, but if you pay for a subscription you get a host of off-site benefits like free, high quality travel insurance and an international cashcard that saves you money on withdrawal fees.
This could be a good model for other niche social networks, because you can come up with a package that suits their shared interests.
Taking the idea a bit further, you could even do this for more generalist social networks like Facebook. You could create a menu of possible benefits, then create personalised offerings for each individual user based on what the network knows about their interests. I wonder if this would work, or just confuse users with the inconsistent offering. Worth thinking about anyway if you’re growing a social network.
Tom wrote this on 24.04.08 – 5 comments
It's filed in the Events & conferences, Social networks, Strategy box
On April 24th, 2008 at 12:15 pm, Panos responded:
Great post, came through similar discussions with financial institutions i.e banks looking for ways to differentiate their offerings through offline tangible offerings to niche customer groups attached to their non-tangible financial products.
Ideally this should include niche offerings for niche interests, i.e. free or discounted photography online? lessons to amateurish social networked photographers
Panos
twitter.com/pkontopoulos
(BTW, don’t you agree that blog comment areas should add twitter accounts boxes except their usual website boxes?)
On April 24th, 2008 at 1:21 pm, Ruth responded:
Great post, though I wonder if offers that are *too* personalised might hark back to what Russell Davies was saying at Widgety Goodness: “The more you know about me, the more it freaks me out”…
Perhaps an alternative would be to have a ‘build it yourself’ benefits package. Create value bands – premium, standard, (or, if you’re Orange; goldfish, biscuit, sabre-toothed tiger…) – and different levels of subscription give you x number of benefits.
I wonder sometimes if there isn’t a tendency to try to second-guess people’s behaviour when a cheaper, easier and faster route would be simply to ask them what they want.
On April 24th, 2008 at 1:32 pm, Ruth responded:
So now I’m wondering if there’s a business in getting together a huge selection of potential benefits for social networks to use (so that the choice can be really wide) and widgetizing the offers, and delivering them to the people who run social networks on an agency basis (you get 5%, we get 10%, everybody wins… that kind of thing)
Also, it means that the end providers of the benefits aren’t dealing with a bazillion social network people, and there’s some buying power and leverage on the side of the networks themselves, and the ability to score good deals on some really niche things…
I’m guessing that an added value agency already exists – but that they might not have connected themselves to social networking just yet, and they might not quite understand the need to follow the long tail to get the really good stuff…
So two more questions:
1. Is a thorough knowledge of social networking going to be essential to getting this offer right and
2. Is this an opportunity for someone to come from the social networking side and start such a business?
On April 25th, 2008 at 4:40 pm, Tom responded:
@ruth – interesting line of thought! I like Umair Haque’s take on this, which is that instead of trying to ‘monetise’ a social network (i.e. extract value FROM customers), you use it as a vehicle to co-create new value WITH customers. Putting this into practice is the hard part though! Nike Plus is heading in the right direction though I think.
@Panos – maybe you should use your friendfeed address as your URL so someone can click through and see everything that you publish?
On April 29th, 2008 at 1:29 pm, Rob Eberstein responded:
Ruth,
Great idea. I think you are bang on in terms of one company getting the deals for all the networks, and providing the choice. The whole concepts of ‘digital goodies’ is one which I’m sure will develop rapidly. It’s a step on from what the likes of mydeco.com does to incentivise users to use the site.