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Web 2.0 as a Private Advertising Platform (Newspapergirl Blog Request #1)
A couple of weeks ago I was talking to Janet Meiners Thaeler on the phone (AKA NewspaperGirl). Out of that conversation came two ideas that really hit home for her. She asked me to blog about each of them. Here’s the first post…
As Web 2.0 evolves it becomes more about micro-blogging and community rather than collaboration and user generated content. I think we’re really in a Web 2.5 phase with where Facebook and Twitter have evolved.
But what about making Web 2.0 a real business model? Most Web 2.0 companies, while providing cool services, have not been able to cut the mustard in the user or revenue department. The first problem is generating users. Once you hit critical mass, the second problem is figuring out how to monetize. Facebook is doing a good job monetizing based off the sheer number of pageviews they generate. Plus they have their own targeted ad network. Twitter has the opposite problem: lots of users and little to no revenue. They can’t figure out how to monetize the phone line. Digg, with its 30 million users and Microsoft ad deal, has generated $4.8 million in revenue while losing $2.8 million. That’s almost laughable.
So Web 2.0 is proving to be a cool community tool and a lousy business model. So what’s Web 2.0 good for? How about a proprietary advertising platform for paid services or products?
Since my recent foray into Twitter I’ve begun using TweetDeck almost exclusively. Its a nice application for managing Twitter friends and communication. But how the heck is TweetDeck monetized? It isn’t - its a labor of love. But what if the guy developing TweetDeck had another business? What if he had an online subscription business, or a consulting business or was a super affiliate or drop shipped product via Doba off his own Web site? If he did, then why not use TweetDeck as a private, proprietary advertising channel to promote his own product or services?
I have another friend who is building a cool Twitter app that will give TweetDeck a run for its money. He is also working on an interesting subscription-based business. The other day he asked me which Idea I thought he should put more effort and time into. I told him to build the business with the revenue model first then build the Twitter app and use it as a platform to promote the subscription business.
This isn’t an original idea. A lot of people are trying this with Facebook apps. Paul Allen at Family Link is trying to use Facebook apps to drive his subscription business but word on the street is that this marketing effort has had mixed results. I’d like to hear from Paul how its working out in terms building and driving actual revenue (not users) to Family Link and WorldVitalRecords.
I’ve also heard that Orange Soda, a Utah-based SEO company, is giving away SEO tools and then using the information generated when a person downloads those tools as a source for lead generation. You download a free tool…you get a call from a sales guys trying to up-sell you Orange Soda SEO services. Great strategy.
So I think Web 2.0 apps may find a useful home as a form of traffic and lead generation for some companies. If you’re thinking about building a Web 2.0 app you may want to ditch the idea that it will ever turn into a real revenue generating business. Instead build in the ability to advertise - to advertise your services, company, etc. Imagine if it took off - it could be a great channel for monetization.
Bottom line: If you’re going to build free, cool web apps and widgets you might as well get paid for doing it. Use the tools as an ad platform to drive traffic to your products or paid services.