How to Monetize Niche Social Networks
March 24, 2009 by Mad I.M Marketer
Filed under Online Colleges
There’s a rumor that big social networks like Facebook struggle to monetize their membership base. The problem comes from the fact that the expenses of running site of this scale are much higher than the advertising revenue. But that’s only one side of the coin.
An active community of interested people is a huge marketing resource. The big networks are general as far as interest but they have smaller interest groups, however those groups aren’t being sold to. The classic monetization such as banner ads is entirely ineffective. In order to sell to the interested groups, there have to be businesses in respective niches. Unfortunately that business isn’t the one that runs the network – running it is a whole another business in itself.
What’s worse is that the big networks aren’t very friendly to the marketers who can and want to monetize their members. Their behavior is natural, the profits gained from that monetization would not go to them but to marketers themselves, and that wouldn’t even cover the cost of running the website.
Having a huge community looks promising but it brings other big issues on the table. Meanwhile a smaller community is much easier to maintain and to sell to it. More often than not, a small community has a much bigger commercial intent and once the technical problems are solved, monetization is easy.
Think of how much would Facebook be worth if it had paid membership. Of course, no-one would pay for something general like Facebook, but imagine a small community of certain interest. The ideas a very targeted group share are worth every penny for subscription. What about paid classifieds and business directory. Not to mention the obvious affiliate promotions and selling your own products.
The essential factor in social marketing is finding a niche where there’s no community but the crowd is hungry for it. The Internet is a big place and there are hundreds of thousands such niches, targeting them can be very profitable from square one, unlike targeting general audience with no goal whatsoever. Remember the old adage – try to please everyone and you will not please anyone.