How to Monetise Social Networking

Got your attention?  This is the subject that everyone has been interested in for some time now, as Web 2.0-based changes to the way that we all work, become reality and drastically change the landscape of certain industries.

At a recent Mensa lunch I found myself sitting around a table with a property developer, a graphic artist, a childcare entrepreneur, various IT-type people, and a web marketer.  And one heck of an interesting conversation developed!

1. Graphic Design

I suggested to the graphic artist that his industry was ‘Balkanising,’ and he agreed that it had already become a cottage industry.  Changes in desktop computing power and bandwidth speeds meant that there was no longer any compelling reason for a graphic artist to go to work, when he or she could pretty much do everything from home, direct to the client. 

There even is now, in that industry, the development of suburban hubs, with leased office space, a large colour printer, scanners, cleaners and support infrastructure, for 10 different independent business entities to use on a shared, hourly-rate basis. 

This seemed to me to be a sign that the industry had spun out to the limit that it possibly could, and was coming back to some slight form of agglomeration for practical reasons.

2. Software Development

It seems to me that the Software development industry is now following the same trend, where, thanks to changes in technology, skilled individuals have access to all of the information and tools to do a better and more productive job from home than they would from work.  There is a similar analogy to the hubs above, where a number of practioners might join together to bid on a big job and deliver scale, much in the same way that two firms of bricklayers might join forces to bid on a big bricklaying job.  In SD there is some minimum infrastructure required, but especially for web-based development, a lot of it is free these days.

Of course low barriers to entry mean commoditisation, international competition, and a race to the bottomas Harvard Business Review describes it.  If I can lie on my couch with a laptop writing software, and with instant access to the best technical documentation from the vendors and from Amazon, then so can gifted young (English speaking) entrepreneurs from much lower-cost countries than this one.

Fortunately I think that there is a competitive advantage for those of us who have already received a high-quality education and many years of commercial experience, and who don’t have personal or financial liabilities, and who happen to live close to a ready market.  But to what extent does this mitigate the ‘off-shoring’ phenomenon?

 3. Web Marketing

I guess that points 1. and 2. above are just so much motherhood-and-apple-pie to most of my readers, and I could also mention bookselling, real-estate, recruitment, dating and other industries that have been changed forever by the coming of concentrator websites.

But the leading edge of this change-wave and the promise of this post, is in Web Marketing.  Simply stated, the problem is, “If a google search for my services in my city returns in excess of two thousand hits, how is any given customer going to find me on the web?” 

Obviously the old-fashioned values of quality, customer service, good word-of-mouth, repeat business, and good value for money are crucial differentiators in such a market.

But as Jeff was explaining it to me, there are a number of things that a skilled web marketer can do for you:

Firstly, an insightful use of google analytics will be able to show you where in the decision-making process that people are, when surfing to your site and then on somewhere else.  You can also see if highlighting different concepts or themes on your website will cause differences in buyer behaviour.

The you can build buzz by answering questions on Yahoo answers, or other industry-specific forums.

These days it is not just about raw hits, but about the value of each hit, and the focus of the web ‘reach.’  At what stage in their buying decision-making process are consumers when they arrive at your site?  Ready to click <Buy>?  Or just surfing?

In this respect Facebook ads, seem to me to be particularly interesting. I never click on a banner ad or a pop-up, but I am quite interested in the facebook ads, because they seem to know a lot about me, There are ads for triathlon training clinics, web design services, and rooms for 50th birthday celebrations.  All are relevant to me.  A chap in Canberra was recently served with a summons via facebook, which raises the concept of being ‘poked’ to a whole new level!

On social networking sites you can join a group, or become a fan of something or someone, and this is all good marketing information.  Even occupations, and those of your friends.  And the interests in your ‘Crowd Cloud.’  This is all crowdsourcing to web-based market-researchers. 

I don’t find it intrusive or invasive, I find it useful to know what my purchasing options are; certainly they change rapidly.  In fact the entire field of web marketing is changing so rapidly that only the dedicated professionals can keep up with it.  One emerging trend now are the so-called ‘velvet rope’ networks, with defined membership criteria and a defined networking purpose.

Here is a shout-out to Jeff at http://theonlinecircle.com there are lots of more good ideas on their web-site, and for the real good ideas there is a price, as you would expect.  Though I am surprised about how much is available for free download in their web-marketing toolkit.  Like all good marketing it is still a stage-gate process of objectives—research—strategy—execution.

There is much more: viral marketing, competitor analysis, thought leadership, SEO, twitter…  What a fascinating, rapidly-evolving and vitally important new field.  One well-worth understanding and using.

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