There is a lot of discussion around monetizing Social Media, and rightly so. Our experience however, is that the approach and thinking around monetization of Social Media has been focused from the wrong frame of reference - that of Web 1.0 and the expectation of fast revenues via advertising. Businesses often anticipate that Social Media is either a) a campaign marketing tool or b) a place to extend their advertising campaigns. While that may be a suitable approach, they are both short-term and singular, thus will not deliver any anticipated returns.
To understand the difference in Social Media vs other forms of revenue generation, it’s good to compare Sales Vs. Marketing. Sales in a business are a Leading Indicator of a company’s cash flow and revenue opportunities measured weekly, monthly and quarterly. They are close and easier to understand - selling is tactical. Marketing on the other hand is more strategic. Marketing, properly implemented, is a strategic investment and marketing ROI is measured over longer periods starting at a minimum of quarterly.
Social Media is also a managed investment. Like a marketing strategy, Social Media takes time to deliver results, even when just marketing. Primarily due to the fact that Social Media means a deeper engagement with your target markets. Additionally, when engaging in Social Media, you are likely reaching a broader circle of stakeholders than a one-off marketing campaign. You will reach shareholders, employees and their families, recruiters and potential employees and more.
Social Media is engaging in a conversation and building a relationship. If we think of comparable “conversations” we have that are transaction oriented, think of these analogies; ordering a coffee is a brief conversation with the retailer ending in a transaction, that’s a sales transaction. Stand by the water cooler at the office and you have a more meaningful conversation where issues are discussed, that’s a “marketing” action, and it takes longer.
Successful Social Media engagement comes from approaching it like a marketing or communications strategy. Developed over time with metrics along the way to help evaluate and shape the program. With this approach, a Social Media strategy is likely to return better results. Some Social Media projects may generate revenue through advertising, but that too takes time. There is no instant and quick hit with Social Media, just like marketing. It takes careful research, planning, measuring and adaptation to realize success.