It's time for marketers to understand how social networking sites cater to every generation.
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There's been a lot of discussion about--and an equal amount of skepticism over--how to monetize social networks and user communities. I think opportunities abound to gain either mind- or market share from e-communities of all ages.
According to profiling surveys, members of MySpace, for example, range in age between 18 and 25.
There were 92 million members as of August 2006. The site registers about 13 million hits a day.
LinkedIn, a social networking site focused on business professionals, has a toolbar for Outlook that is aimed at making business networking easy. There are 9 million members, mostly business people in their 30s, 40s, and 50s. The site's revenue model is highly developed, with premium (for pay) services at its core. Cyworld, a Korean e-community, has 18 million members--90 percent of all Koreans in their 20s are signed up. The business model earns its owners $7.78 per member per year.
So, why is this information important? Because in conjunction with many other social networks like Friendster, Spoke, and social sites like YouTube, we're talking about possibly close to a billion members of online social networks and sites where viral opinion-sharing is a part of the DNA. The impact on business and customers will be dramatic.
Cyworld's model might be the most interesting. The site is wildly successful in capturing the hearts and minds of status-conscious Koreans, and it makes money, but not with advertising. Instead, Cyworld make $300,000 per month selling items that are created by designers who get a revenue share for each sale of a personalized item, provide introductory music to the member's miniroom, or make the miniroom that each member gets cool through its design.
This means success early on, and a crack at the U.S. market. There is a team working day and night to adapt Cyworld's model to a U.S. crew and see if it can battle MySpace for hegemony. Aimed at the notoriously status-conscious teenage-girl crowd, the developers could hit it big: MySpace is just a big (almost) open-air market for talking and sharing, while Cyworld gives status-aware members their own rooms or apartments to play grown up in.
Second Life, a successful U.S.-based Gen X site, is a digital world created by site "residents." It has been generating several million dollars a month and has actual cottage industries for the creation of accessories like clothes, bling, and even cyber--real estate sales. Residents can earn Second Life dollars, which also have a real U.S. dollar equivalent, by participating in Second Life activities, including just visiting and lotteries.
LinkedIn's premise is very much in line with six degrees of separation theories. For example, my network has direct links just north of 200 people. That translates to a possibility of getting to several million people, one way or the other. LinkedIn's revenue model is to sell premium services and to provide visibility to its network (part of the deal) to corporations that might have an interest in reaching these upscale young and middle-age professionals.
The point is, marketers must make note of these burgeoning sales/contact opportunities that cross generations. Every generation is participating in the social networks that are now available to its peer group. Your customers are social, connected, and human, and as proof want to give your company some money. At the very least, they want to hear what your company has to say in the friendly social network they happen to inhabit. This is a new world with opportunities galore, and curiously, it is growing because of what makes us human.
Paul Greenberg is president of The 56 Group and the author of CRM at the Speed of Light: Essential Customer Strategies for the 21st Century. He can be reached at email@example.com
The word is everywhere now: social networks, social frameworks, social platforms.
The Herald: Paul Greenberg -- chief customer officer, BPT Partners; president, The 56 Group.
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