There’s a wide variety of niche social communities and social networks on the web that have gained impressive user bases and a deluge of compelling user-generated content, but most have failed to develop a sustainable and healthy business model…outside of advertising. Unfortunately, advertising has become the knee-jerk solution to the monetization obstacle in building a profitable online community. With CPM becoming increasingly meaningless, and advertisers becoming more and more careful with their ad spends, entrepreneurs launching or managing community sites should be considering more creative, alternative revenue streams. Here are a few ideas for how to leverage your community and its content to generate revenue:
Unlike one-way advertising, sponsorships can be established to have real live people from sponsoring companies directly engage with users through discussions about the company’s products and/or services, as well as broader discussions about the industry or effected audiences. This is assuming direct participation from company reps. is normally discouraged through the sites terms and conditions and community managers.
For example, let’s say you have a community of environmental activists with content covering all things “green”. Naturally, there will be plenty of discussions on the merit of green products and services, and the companies behind them. Within the “Green Living” section, you can open sponsorship opportunities to the likes of Home Depot, Lowe’s, and other companies vying for greater market share within this niche segment. This way, sponsoring companies can have a genuine personal voice and ear in the conversations, rather than just a lifeless banner ad that gets ignored. Each sponsored profile can be distinguished with a slightly different design, and inclusion of the sponsoring company’s logo by the person’s avatar – in the interest of full disclosure to the community, and as a sponsorship benefit. This will open up direct communication between your users and the companies, products, and services their discussing; provide advertisers a more meaningful and impactful way of engaging with your audience; and most importantly open a new stream of revenue.
Product Feedback Data
Imagine how valuable it would be to aggregate all of the discussions about companies, products, and services within your community, and use this data to develop customized reports for companies seeking exactly this kind of direct market insight? For example, let’s say Proctor and Gamble products are regularly discussed by users. On a quarterly basis, you can generate a report that organizes all of the community’s feedback about P&G and its products, anonymously of course, as well as all of the information gathered on its key competitors. Now, to do this correctly and efficiently, you’ll need the help from your development team to quickly parse all of the data and generate clean reports, but this cost would be nominal compared to the revenue generated from licensing fees.
Market Research Reports
The same general concept of gathering user feedback and licensing the anonymous content can also become a service for market research firms and trade organizations. The only difference would be the regular inclusion of polls to gain feedback on specific topics of interest from your community. On a periodic basis you can extract all of the results from your polling data and generate customized market research reports for your various clients. The important element here is to provide the right incentives to your community to participate in polls, so as to offer a broad swath of results within your reports. What better incentives than free give-aways or discounts from your sponsors (which can also serve as an additional sponsorship benefit) – win-win!
The key to making any of these initiatives successful is building a large community of influential consumers; organically guiding the conversations towards topics that center around the companies, products, services, and industry trends of interest to your target clients; determining the right balance between publicly available content and private content only accessible to community members; streamlining these new systems through smart development modifications to your community site; and most importantly always maintaining 100% authenticity and transparency, and catalyzing content that’s valuable to your number one stakeholders – the community itself.
Attribution: These ideas were influenced by “The Social Networking Business Plan” by David Silver, a recommended read indeed!