Social Media is killing Big Business
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Social Media is killing the way traditional content providers have done business and earned their revenues for many years. In a matter of years social media has transformed the way people find the news they want to read.
Under the traditional model, people would go to their content provider of choice and browse the stories the editors decided to include. Now the social media savvy citizen will rely on their friends to point them in the right direction using the myriad of sites and tools at their disposal. They trust likeminded people they have befriended or networked with show them the stories they will have a mutual interest in.
Once such example is facebook. Over the last four months alone the number of links shared via facebook has double from 9 million ot 18 million. Sites like the Huffington Post, the US news blog, gets 19% of their traffic from links posted on facebook and the infamous gossip blogger Perez Hilton gets most traffic from this source.
So then, what are the traditional content providers doing to capitalize on this new form of news browsing and discovery? The New York Times is a leader in this field. They have put a great effort into developing their social networks and have approximately 450,000 facebook fans and 1.7 million Twitter followers. They also have Twitter accounts for each of their news blogs. The FT has been using free content distributed by RSS feeds for a long time (I just have to look back over my stored history in my RSS aggregator to see it has been for years). CNN recently had a highly publicised competition with the actor Ashton Kutcher over who would reach 1 million Twitter followers. You may not be surprised to learn that it was the Hollywood actor who walked away with the glory although he did use some slightly underhanded tactics involving photos of his actor wife. On every news site you will now find the “AddThis” plugin or something similar that allows you to very easily post a story to your Twitter, Facebook and Digg accounts and thus propogate the story to your network in the hope that you will share their content for them.
What are the Big Guys doing wrong?
Social media is all about connecting with your network. It has nothing to do with selling, well, not directly anyway. This is why any attempt to use social media strategies to replace falling revenues is ultimately doomed to failure. That said, this doesn’t mean there are no strategies to monetize the traffic they get? There is the classic selling of ad space on their highest traffic pages, Google Adsense, featured products – wouldn’t you like to have your product promoted by a sector expert? As you can see, it isn’t just the big players that can capitalize on these additional sources of income. Smaller operators have succeeded in making a killing through making the most of people’s love of all things social media and attracting a lot of visitors to their sites. Mashable.com is one such example that has generating a massive following from what was originally a one man project. Pete Cashmore, CEO of Mashable.com has achieved legendary blogger status through identifying that a lot of people want to know more about social media itself. He has managed this by being very diligent in building up and communicating with his network. He is reputed to respond to most references about him or mashable made online. Currently, Mashable has in the region of 1million Twitter followers and this number is growing rapidly as people, myself included, discover the treasure trove of information and news available at Mashable. The result of this? An estimated $150,000 per month in ad revenues from companies advertising on the site. It just goes to show what is still possible, even today.
What challenges they face in the future?
Rupert Modoch of News International fame is adamant there is still a space in the world for paid online content although many people disagree. There are however, models that may facilitate this in the future including an effective and widespread micro-payments mechanism. I am a personal fan of the membership site where people will galdly pay a regular amount to be able to access specialised and high quality content but as the description suggests, this only really works for the more specialised or niche market. Luckily this is where I operate my business, looking at niche areas within the world of social media with a particular emphasis on social media marketing strategies.
Recent developments in the social media space that may provide some respite to the online revenue starved media companies are perhaps setting the trend for the next generation of cash generating idead. YouTube has recently launched a service whereby it will share its own advertising revenues if your content goes viral – more hits for them equals more ad revenue, so why shouldn’t they share it?
Filed Under: Social Marketing Strategy • Social Media
