Social Media Monetization Strategies & Revenue Models

In the past the revenue model for most websites including social media has primarily been advertising and affiliate marketing based. Some new school thinkers have completely foregone revenues as sponsors are invited onto the platform for free in order to get accurate measures on the CPM (cost per thousand) rates and the advertisers return on investment.

Beyond the CPM, there is opportunity for social media widget, microsite, facebook application or even your cutting edge iPad app to make money with a proven web monetization strategy. There are said to be 9 general models which are as follows:

· Brokerage

· Advertising

· Infomediary

· Merchant

· Manufacturer (Direct)

· Affiliate

· Community

· Subscription

· Utility

The top 4 which apply to most new social media ventures are listed and discussed below:

As an SaaS model

It has been described by some to be the holy grail of social media revenue models where you can make money while you sleep or even better while you’re on the beach letting recurring revenue waves crash into your bank account. Although it is hard to get there right away, there is potential (although moreso in the long-term) for your site to begin offering a free version of its site to all users, but with the option to subscribe to enhanced feature set and members only content that would be valued by select individuals who are willing to pay a monthly or yearly fee to have access to those features.

As a Brokerage

Brokers are market-makers: they bring buyers and sellers together and facilitate transactions. Usually a broker charges a fee or commission for each transaction it enables. The formula for fees can vary. Your social media site and / or application can make headway in this model by handling a service for your community members such as event registration or processing payments.

As an Affiliate Platform

This strategy would arguably be more time consuming as the site would have to target brokers who sell into Community Relations Coordinators (CRC’s). Unless there is already a dedicated group of organizations assisting these people, then you are better off driving CRC’s directly to the site and converting their dollars there. Conversely, you may decide to become an affiliate of major good wholesalers or even manufacturers specifically related to your industry and the niche of your social media application or site.

As an Advertising Platform

This is the primary revenue driver of most social media ventures out there today, especially during the first 12 months. Advertisers will need to either be local to the communities in which the site operates or must have the ability to sell into those markets easily.

After you’ve chosen your model you should consider the following Web 2.0 Presence Recommendations to get started:

· Facebook.com – applications, fan page, group wall posts

· Meetup.com – event listings

· Twitter.com – possible application creation that filters for people interested in the need that your social media solution provides (easily built using search.twitter.com)

· Upcoming.org – leverage the subscription feature and find out how we can create listings automatically from your social media website.

The Business Advantages of Social Media Platforms

More and more large and small brands are investing in special purpose, internal or external, online community platforms that THEY control. These social media platforms can be custom designed to suit your unique brand attributes.

· Maximize YOUR ROI by engaging your community with a social media solution that you control.

· Create brand awareness, retain and attract new members and customers for your community, products and services.

· Enhance your brand and drive performance objectives based on your decisions.

· Control all of the content, including advertising, in your community’s platform.

· Customize your community’s user profile requirements to extract the personal or behavioral information you need.

· Control the valuable repository of information that you extract from your social media strategy.

· Grow your social network your way.

Here are some specific examples of how Social Media Community Platforms Serve Real Business Needs and Deliver Real ROI:

Business Need

Harness the power of Social Media to contribute to the attainment of your internal and external objectives

Business Advantage

- Maximize ROI by engaging your community with a social media solution that you control.

- Reduce communication costs

- Empower your organization through engagement

- Create brand awareness, retain and attract new members and customers for your community, products and services

Business Need

- Communicate with high efficiency and high productivity

- Increase Employee / Customer Engagement and Retention

- Measure Engagement

Business Advantage

By enabling your private workforce or public community with a proprietary structured communication channel, you are able to identify positive and negative conversations and respond to them accordingly. With this, an employee with an innovative idea can get reinforcement and feedback and an employee who has brought up or identified a negative rumor or misconception can also been attended quickly to and be corrected.

Business Need

Make well informed strategic decisions in all aspects of your business including:

- Planning a future workforce strategy

- Innovating your products and services

Business Advantage

- Real-time measurable insights

- Define rising organization issues

- Identify influencers in your organization

- Identify popular topics

- Polarity – define the most positive and controversial issues within your organization

- Velocity – identify the fastest growing issues

Business Need

Develop leadership and identify influencers

Business Advantage

By knowing who is leading the most and who is most followed, you gain insight beyond your standard hierarchy to see who your workforce thinks in the most influential

Business Need

Community Feedback

Business Advantage

Simple-to-use surveys, polls, and voting that will entice the most skeptical users to simply press a button and voila, before they know it they are engaging with the community

Business Need

Centralized media and document sharing

Business Advantage

Easily centralize, store, share and pull external media from an unlimited number of sources providing a more sophisticated way to communicate and share ideas

Social Media Monetization Strategies & Revenue Models

In the past the revenue model for most websites including social media has primarily been advertising and affiliate marketing based. Some new school thinkers have completely foregone revenues as sponsors are invited onto the platform for free in order to get accurate measures on the CPM (cost per thousand) rates and the advertisers return on investment.
Beyond the CPM, there is opportunity for social media widget, microsite, facebook application or even your cutting edge iPad app to make money with a proven web monetization strategie. There are said to be 9 general models which are as follows:
• Brokerage
• Advertising
• Infomediary
• Merchant
• Manufacturer (Direct)
• Affiliate
• Community
• Subscription
• Utility



The top 4 which apply to most new social media ventures are listed and discussed below:


As an SaaS model
It has been described by some to be the holy grail of social media revenue models where you can make money while you sleep or even better while you’re on the beach letting recurring revenue waves crash into your bank account. Although it is hard to get there right away, there is potential (although moreso in the long-term) for your site to begin offering a free version of its site to all users, but with the option to subscribe to enhanced feature set and members only content that would be valued by select individuals who are willing to pay a monthly or yearly fee to have access to those features.
As a Brokerage
Brokers are market-makers: they bring buyers and sellers together and facilitate transactions. Usually a broker charges a fee or commission for each transaction it enables. The formula for fees can vary. Your social media site and / or application can make headway in this model by handling a service for your community members such as event registration or processing payments.
As an Affiliate Platform
This strategy would arguably be more time consuming as the site would have to target brokers who sell into Community Relations Coordinators (CRC’s). Unless there is already a dedicated group of organizations assisting these people, then you are better off driving CRC’s directly to the site and converting their dollars there. Conversely, you may decide to become an affiliate of major good wholesalers or even manufacturers specifically related to your industry and the niche of your social media application or site.

As an Advertising Platform
This is the primary revenue driver of most social media ventures out there today, especially during the first 12 months. Advertisers will need to either be local to the communities in which the site operates or must have the ability to sell into those markets easily.
After you’ve chosen your model you should consider the following Web 2.0 Presence Recommendations to get started:
• Facebook.com – applications, fan page, group wall posts
• Meetup.com – event listings
• Twitter.com – possible application creation that filters for people interested in the need that your social media solution provides (easily built using search.twitter.com)
• Upcoming.org – leverage the subscription feature and find out how we can create listings automatically from your social media website.