2007 will be a year of monetization for social networks.

The most important struggle in the social networking market in 2007 can be characterized in three words: monetization, monetization and monetization.



Regardless of whether social networks will take over their spheres (for example, sports, pets, mothers, teenage girls, etc.), regardless of whether an interaction element is introduced in them (for example, OpenID), The participants' personal pages are widgetted, and the main pages are personalized, whether 2007 will be the year when social networks will be integrated into mobile devices - all these market development measures will become secondary, giving way to a more fundamental factor.



And this fundamental factor is whether social networks will be able to use the effectiveness of their business models for profit, i.e. raise the price of advertising, make a cheap one expensive (for example, turn today's CPM into $ 0.5 into some $ 10 CPM).

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To achieve these goals, I cite four critical factors for success, which the social network monetization scheme should be oriented to:

• Social networks and online communities in general are simply terrible platforms for all types of advertising that require participants to perform some kind of action. For example, the Google Adwords system proved to be quite ineffective. On the contrary, social networks have a great opportunity to become highly efficient brand engines. In fact, it is my prediction that social networks will show themselves as the most effective way to “cook” brands on the Internet.
• As we all know, social networks are a new way of self-expression and communication. And, since the people themselves (not the products) remain the focus, any new way to promote the brand, including the active participation of these people, can be successful. In other words, people themselves become platforms capable of disseminating information over the network. People should be a means of conveying information about the brand, and not just the final recipients. That is, do not advertise to these people, but advertise with and through them.
• Under the tremendous onslaught of monetization, many of today's social networks, having platforms only with low CPM rates, turn advertising into chaotic, erratic noise. In fact, every generated page has ads. This is quite wasteful and counterproductive for both users and advertisers. Instead, improved monetization methods that bring higher CPM should result in a decrease in advertising intensity. To some extent, even an artificially created lack of advertising can be applied, which will lead to the desired results and satisfaction of both parties.
• Scalability is a key point, so automation is a must. Google can be seen as an example. The system on which the Adwords and Adsense platform works, starting with the independent buying of advertising and ending with the auction of advertising sites and the possibility of paying with payment cards, are all key points for everyone who is going to optimize the monetization system in the social network. Moreover, scalability allows the system to work with both small advertisers and giants from Madison Avenue.

Now a few words for those who already have a social one or those who are in the process of creating a new one. Make sure everything you do is directed to monetization. For example, if you are creating a highly specialized social network, aim for higher CPM. If you are going to widget profiles, take care that this step will be taken towards monetization. 2005 and 2006 showed that social networks were not a temporary hobby. 2007 will be the key to monetizing social networks. Consequently, mergers and acquisitions are waiting for those who can succeed in this business.