The framework: Facebook, You Tube, and Myspace from here on out will be considered networks. Consider the network where there are millions of logged in users and some user preferences are known and other preferences are gleaned periodically. Imagine you have an aggregation of eyeballs and you know something about each one such as age, gender, sports, zip code and other valuable preference. The big idea is that the network with logged in users is built. The distribution has a marginal cost of nearly zero. The delivery of high quality synchronous and asynchrnous programming is the missing link.
The strategy: the network will advertise and broadcast content on the network. Customers that are logged in will tune in to the content and receive value from the content (favorite program) whether it be comedy, action movies or any content/program that one might broadcast. The big idea here is that personalized ads can be delivered because of the logged in nature of the network ads will be personalized.
Scalability: As more customers log on for their program/content, more segments are aggregated and advertising is more targeted than ever. After 6-18 months a very affluent segment emerges that’s logged in to the network and high value personalized ads can be delivered. Some programs will be delivered synchronously while others may be asynchronously or on-demand
A new paradigm: The ads are interactive…. For example, if someone in the network wants a boat they will not only see boat images but will have the opportunity to see diferent types of boats and after a few interactions/clicks be presented with the ability to design one. Another example is with an automobile, the networks starts with serving aftermarket ads showing how their current wheels could be enhanced and after some interaction/clicks a customized ride. It’s fairly easy to extend this thought to a new car purchase and how that might work as well. The data available for storyboarding alone would generate revenue by learning customer preferences first-hand. Think about how this could change real estate shopping. It will transform shopping and will be value added almost multi-tasking from the customers perspective.
Given the choice for a customer to view an advertisement in between periods of content ( your favorite on-line program) wouldn’t you love for it to interact with you and serve your needs.
In summary, the network is built. The missing link is the delivery of syndicated content from high quality content providers synchronously for high cost per thousand audiences and asynchronously for the 24/7 always on value of the network . The online demographic is very attractive to advertisers. Additionally, advertisers need to vertical integrate interactive agencies into their functional organizations and will pay to access the network for focus groups, story boards, detailed future preferences , data mining and actual orders. One could imagine a commission based model with the network benefiting. Imagine a logged in user of the network designing their sneakers and ordering them while watching the Boston Marathon and the network say takes 15%.
Imagine for Facebook alone, what if you could motivate their 175 Million active users to attend a concert, watch the latest cell phone reveal, or see Justin Timberlake. Even a small percentage of this type viewership would make most ad models work exceedingly well.
The New York Times indicated the social networks might be strapping on a movie projector and a concert hall last year in addition to going global. All good ideas. As any decent strategy person soon learns, strategy is one thing, execution is another and it takes both!
What we should learn from Stephan Lee, the author of the link below is that others have come before and delivered a cost free distribution model and all the social networks need to do is use it to the max.
http://atwiad.com/blog/2009/1/30/what-telco-history-tells-me-about-facebook-business-model.html
Diann Daniel cio.com supports that currently social networks are vast wastelands. I assert the money will follow the quality
http://www.pcworld.com/article/159992/social_networks_thrive.html?tk=rss_news
Michael Duley
March 1, 2009
Michael H. Duley 