Whitepaper “Cashing in” on Connections
Monetizing Today’s Social Networks
Executive Summary
Within the past two years, the amount of Social Networks and online communities has grown faster than anything else on the Internet. The number of people associated with these networks continues to dominate the Internet space. Unfortunately, almost all Social Networks today endure very high costs with very low monetization rates. Monetization occurs either directly through monthly subscribers, “Freemium,” and virtual-goods models; or indirectly though advertising based business models and first attempts to include e-commerce. Only vendors in Asia and some western platforms have started to implement a virtual economy with goods and currency.
Most Social Networks today are 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) do not help because these models are not tailored to the needs of Social networks. Social Profile Targeting on the other hand, leverages the demographic and geographic user information as well as the interests of the user. It is built around the information within user profiles such as their connections to other users and the data entered by the users themselves, to provide more exact data with which 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 the newest Web 2.0 technology, advertisers can easily define their target audiences/groups and get reports on the success of their campaign and target delineation in real time. ADTELLIGENCE’s targeting technology not only helps increase advertising revenue for Social Networks, but can also implement other effective revenue channels such as ecommerce, gaming monetization, marketing intelligence, social media monitoring and web analytics.
There is no universal business model for Social Networks. Nevertheless, the best business model will always be a mix of different approaches that can be continuously developed and combined. The users will decide which model they like. Ask them, they will tell you what they want: to have user generated content delivered.
