Paying for social media marketing

Here at ItsOpen we have been banging the drum for greater openness and dialogue with consumers. Businesses that are responsive to what people are saying online will get a competitive edge.

In that sense, social media channels such as Facebook and Twitter offer a huge, low cost marketing opportunity. It’s also virtually free. But like all good things that are in demand, that won’t last for ever.

The principle of the Internet has always been: capture a user base first and charge later. Now social media sites are starting to do the same, suggests Roberto Rocha in Canada’s Financial Post.

Take Twitter. The service has millions of users and is probably the most talked-about site in 2009. So far it hasn’t made a dime. And how could it, as long as its leaders refuse either to display ads or extract a usage charge? What they are looking at instead is the idea of charging companies that use it as a marketing tool. It makes perfect sense. Big companies have the money, and are increasingly turning to social media as a way to reach consumers and cultivate a youthful brand image.

There are other possible approaches. Rocha points to the example of Praized Media, a Montreal startup that offers a search tool that website owners can embed to help their visitors look for and rate local traders.  That’s a pretty conventional approach, but the company has now come up with something a bit more original: monitoring online conversations to spot marketing opportunities, and then sell them on. Someone might be tweeting about plans for her daughter’s wedding, for instance. That contact could be passed to a florist, for a fee.

Some people might find it a bit creepy to get a call from a marketer who had been eavesdropping on their online conversations. On the other hand, if people will gossip in public, what do they expect? Others might see it as a useful service.

These revenue models are bound to be a bit hit and miss. A few will take, most will probably not. But in one way or another, as the marketing opportunities in social media become ever more viable, companies are going to start paying for them.

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Some other posts you'll find interesting:

  1. Forrester on the practicalities of European Social Media Marketing
  2. Marketing staff locked out of social media sites
  3. The Public Sector Takes to Social Media

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