There’s no doubt that social ties have tremendous value: people find love and work largely through the people they know and the people the people they know know.
And there’s no doubt that digital representations of social ties add value. Facebook does improve people’s lives.1
The puzzle, and one of the key challenges facing companies like Facebook, Google, and Yahoo!., is how social media can make money. So far the evidence is most users won’t pay directly, which leaves ideas like virtual goods, community marketplaces, app stores, and, of course, advertising. Unfortunately, although we know great ways to advertise to people searching, and decent ways to advertise to people viewing content, it’s less clear how to advertise to people communicating.
P&G’s Ted McConnell puts it bluntly:
What in heaven’s name made you think you could monetize the real estate in which somebody is breaking up with their girlfriend?
So, what if social media and advertising just don’t mix?
Advertisers only pay when users volunteer to say something about the brand to their friends.
Indeed, this sort of paid version of Bem+Wom (“BEtter Mousetrap + Word Of Mouth”) — more on this in the next post — is one of the first things people think of when pondering how to monetize a social network. But can it work well and if so, how?
|1For example, I never would have guessed that three completely disjoint friends of mine are all fans of Sriracha Rooster Sauce. Who knew?|