Social Networks Thrive -- Now What?
Twitter and to a lesser extent Facebook are like ghetto art communities on the verge of gentrification: Hipsters are loving the first-there, build-something-from-scratch feeling, and hungry capitalists are eyeing the goods and trying to figure out how to get in on the action and make a profit. But few companies have figured out how to capitalize on all that coveted word-of-mouth and networking.
Part of the problem lies in the very nature of social networks: People just want to talk with their friends. And part of the problem is that outside of Facebook's stray ads, the two most talked about social networks (Facebook and Twitter) don't really offer businesses clear-cut entry points because they don't yet need to--Twitter, for example, is flush with US$35 million in VC funding--but eventually a sustainable business model will be necessary. Just how that profit will be made and which social networks will reign supreme is a matter of opinion.
During Social Media Week, Abrams Research polled more than 200 social media founders, bloggers, journalists, entrepreneurs and "members of the Twitterati" from across the U.S. and Canada. They asked how social networks should be monetized; which social networks are most important to them; what the future for Facebook, Twitter, LinkedIn and other social networks holds; and more. Here are some highlights.
Users are most likely to pay for Facebook. Thirty-two percent of users say Facebook is the social media service they'd be most likely to pay for, with LinkedIn following at a close second at 30 percent, and Twitter in the number-three spot at 22 percent.
"Freemium" tops the list as the best way to monetize a social network. "Freemium," a monetization model that offers a free basic service with a fee for advanced options such as storage or analytics, is the best way to monetize social media say 46 percent of respondents. Freemium is followed by contextual/targeted ads at 20 percent. Other methods were far behind. For example, research scored only 9 percent, and a straight-up subscription model only 6.9 percent. Banner ads and traditional online advertising scored the lowest marks at 3 percent.
Social media is crucial for keeping people up-to-date. Twenty-four percent of respondents say that the social networking feature most critical to them is the status update, while newsfeeds ranked most important with 21 percent. Comments followed at 17 percent, while personal messaging topped the list for 15 percent. Ranking much lower (under 10 percent) were uploading photos and videos, mass-messaging, and tagging and untagging.
Twitter should be the go-to social network for businesses. Although Facebook tops the list of social networks individuals would choose to pay for, Twitter tops the list respondents would advise businesses to pay for (45 percent). LinkedIn follows at 21 percent, YouTube scored highest for 19 percent, and Facebook trailed at 15 percent.
Some companies are getting social media right. Respondents named businesses that were doing the best job with social media: The most popular choices are Zappos, CNN, Comcast ("Comcast Cares"), JetBlue, Dell, Burger King, NPR, New York Times and Ford..
Social networking could cool off like a once-hip restaurant. The biggest challenge seen facing social networking services is the "inevitable slide into uncoolness," say 29 percent of respondents. This was followed by lack of advertiser interest at 15.3 percent and the inevitable spam problem at 13.4 percent.