Social network monetization strategy

Pierre Coupet · May 25, 2009 · Short URL:

What's Missing?

 I believe that partnering with a content provider that informs and educates users on how to leverage the power of the social network is a much overlooked aspect of a social network's monetization strategy.

The primary reasons for that are:

1.  The social network provider does not believe that its users will ever purchase content regardless of the nature of the content. Therefore, from a psychological standpoint, you cannot advance an agenda that you don't believe in and which you feel has no chance of success.

2. The internet graveyard is littered with information providers, including prestigious market research firms, who sought to distribute and sellonce valued "brick and mortar content" on the web and failed miserably.

As a result, this false logic has developed in the minds of all current and aspiring information providers:

  "Internet users will not buy content on the web."

This logic assumes that people are rejecting the distribution medium instead of the content. What it fails to take into consideration is that people are not rejecting the distribution medium, they are rejecting the "value" assigned to the content. Their reason is simple AND correct:  This information is no longer as valued as it once used to be since most--if not all--of it can now be obtained via the internet free of charge.

The Challenge

Therefore, instead of lumping all content into one bag and assume that no one will ever pay for it, the challenge for a social network sitting on top oftens to hundreds of millions of eyeballs is to  either  find and develop the sort of not yet available content that their user would be willing to pay for on an a la carte or  partner with such information provider. basis

In the case of social networks, the most logical piece of "information"--nottools--that all social network members are crying out for is:   How do I leverage the power of this social network to my individual or collective benefit?

For the most part, 98% of these social networkers do not have the answer and,  for the two reasons previously stated,  no major social network is willing to step up to the plate to provide them with what they truly need. Instead they [social networkers] are being provided with more of the same:  free tools, advertising, and a variety of fee-based subscription models. It's a real shame and a huge missed opportunity for all.

The Solution

Therefore, the solution for all of us,  as follows, since we are all on the same boat, is to begin to step up to the plate in order to fulfill the promise of this amazing collection of tools and individuals we call "the social network": 

1. Information Providers.  They need to step out of their bunker mentality and begin to develop that ultra premium content that social networkers are crying out for in order to leverage the power of the social network to their individual or collective benefit.  As well, they have an obligation to let everyone know that that information is available and not succumb to the false notion that it's a waste of time because nobody will pay for it.

2. Social Networks.  They need to take a chance, come out of their shell, reject the false logic that has guided them for so long, and begin offering their members a different menu on their plate.  One way to do that is to start asking their members what kind of "information"--not tools--they need and whether or not they are willing to pay for it.  What do they have to lose by asking?  They can always partner with an information provider if it's too costly for them to develop the content on their own. is a good example of such social network that constantly seeks to develop and provide "information" in addition to the tools that it provides to its members.     Bambi Francisco, CEO and Meliza Solan, Internet Anchor of VatorNews, make a great deal of effort at going out interviewing startups, etc. in order to provide members relevant information on the pulse of startups, fundings, the VC community, etc.   If you are a current or aspiring startup and need "relevant information", in addition to introducing yourself to your peers and the VC and angel community, is the undisputed place to go to or be in.  For disclosure reasons, I need to mention that, although I am a member of, I have neither contacted or briefed them regarding their mention in this article prior to its publication, and nor have I been paid or will be paid a fee to promote them in our publications.

3. Social Network Members.  They also need to openly come out and reject the false notion that they are only interested in things that are free regardless of the value to them.   They need to demand more from their social networks in the form of information instead of only--or mostly--them being asked to provide the information. 

The idea that social networkers will "step over a dime to pick up a penny" and are either too blind or oblivious to anything that has a dollar value attached to it, regardless of its intrinsic and explicit value,  implies that they are morons and lack the intelligence and sophistication to make a well-reasoned decision.  I, for one, openly and loudly reject that notion and have indeed purchased information deemed highlybeneficial to my organization "when such information was not readily available for free" on the internet.

Let's Seize the Moment

In conclusion, "When we miss a big change, when we don't get great people on it, that is the most dangerous thing for us," Gates said. "It has happened many times. It's OK, but the less the better."  

As one of my esteemed colleagues on XING, (Frederic) Andre Fortune of nTangible Media,  aptly stated, "Let's seize the moment!"       

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Pierre Coupet

Founder of Virtual Organization Management Institute and the modern virtual organization management discipline pioneered since 1997; and has over 35 years of diversified professional experience.

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Pierre Coupet

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Founder of Virtual Organization Management Institute and the modern virtual organization management discipline pioneered since 1997; and has over 35 years of diversified professional experience.

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