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.