Latest TechnologyReview magazine had cover story about social networking sites making money. Till today advertisers couldn't figure out a successful way to make money by advertising on these social networking sites. Interesting quote from the article is :
"For social-networking sites, targeting will necessarily entail getting "between" users, as Seth Goldstein put it. You come to a social network because you are interested in your friends; ergo, the thinking goes, in order to get your attention, advertisers need to let you know what your friends are buying or thinking about buying, or they must somehow get you to send each other ads. It's either a beautiful idea or a creepy one, depending on whether you're an ad executive or the user of a social network."
How cool it would be to know what your friends bought and get some ads or discount coupons on your myspace or facebook. But you need to be very careful about how many ads you put in there and how you get the data. One solution I can think off is that when a person buys something on the internet or in the store, the store sends the person a link to the item he bought so that he could share that link with his friends in myspace or facebook. His friends can review the item and if they like they can buy the same item or any other product. Kind of referral program but its just that its is again user generated email content and because the email link is being sent by their friend, people are more likely to click on the link than if the link was sent through some automated software. The person who refers the program may also get some additional discounts for future purchases.
By using this program,
1) you are sending out targeted advertisements because the person would send the link to his friends who he believes would be interested in the product.
2) Most likely the person receiving the link would be interested and would click the link. So its cheaper in advertising terms $0.00 CPM.
3) Both the receiving and sending parties have incentive so both are more likely to make a purchase or at least review the product.
There are software tools that the magazine talks about in the article, the softwares are cool and interesting.
Another interesting that I found is how the article relates these social networking sites to the dot com era of lycos, compuserve etc : http://www.technologyreview.com/Biztech/20922/page7/
"For social-networking sites, targeting will necessarily entail getting "between" users, as Seth Goldstein put it. You come to a social network because you are interested in your friends; ergo, the thinking goes, in order to get your attention, advertisers need to let you know what your friends are buying or thinking about buying, or they must somehow get you to send each other ads. It's either a beautiful idea or a creepy one, depending on whether you're an ad executive or the user of a social network."
How cool it would be to know what your friends bought and get some ads or discount coupons on your myspace or facebook. But you need to be very careful about how many ads you put in there and how you get the data. One solution I can think off is that when a person buys something on the internet or in the store, the store sends the person a link to the item he bought so that he could share that link with his friends in myspace or facebook. His friends can review the item and if they like they can buy the same item or any other product. Kind of referral program but its just that its is again user generated email content and because the email link is being sent by their friend, people are more likely to click on the link than if the link was sent through some automated software. The person who refers the program may also get some additional discounts for future purchases.
By using this program,
1) you are sending out targeted advertisements because the person would send the link to his friends who he believes would be interested in the product.
2) Most likely the person receiving the link would be interested and would click the link. So its cheaper in advertising terms $0.00 CPM.
3) Both the receiving and sending parties have incentive so both are more likely to make a purchase or at least review the product.
There are software tools that the magazine talks about in the article, the softwares are cool and interesting.
Another interesting that I found is how the article relates these social networking sites to the dot com era of lycos, compuserve etc : http://www.technologyreview.com/Biztech/20922/page7/
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