Sunday, August 2, 2009

Monetizing Social Networks- what will the privacy advocates say?

A lot has been written and said about monetizing social networks. Investors are worried that sites like Facebook that has over 250 million users worldwide and is a market leader, don't have a clear business model.

Well, investors and marketers have to remember one thing that is different about social networks. When I go to say Facebook, I am interested in the conversations my friends are having and not really "looking" for something. However, when I do a search on Google, I am specifically looking for find something and am happy to click on the sponsored contextual ads that appear alongside.

As a result, social networks are mostly being used by companies to build a brand and engage with their customers and they are a great medium for that (building a brand and creating awareness is what we have been using the traditional media for since the beginning of time).

However, if you want to do anything more on a social network, keyword based contextual advertising is not the answer.

Jitendra Gupta talks about the concept of a universal profile that I found very interesting. Essentially, the concept is to create my unified persona based on my interactions on the web. And a universal profile combined with behavioral targeting can give very powerful results to advertisers and investors.

Think about this- If based on my interactions on the web, Facebook knows that I am married Indian male settled in New York with a wife and a son (and another on the way), it can serve me a good DR banner ad for a minivan I need to purchase. Ideally, they should also be able to bundle it with a good car insurance offer. And, who knows, I might click on it as well!!

Well, the privacy advocates may be up in arms against the concept of a universal profile getting combined with behavioral targeting. But I don't think my friends on FB who openly post their contact information on my wall care too much.


  1. Nitin, you're running a really high quality blog. Would you mind if I linked to this blog from my own at ? I apologize for contacting you through your comments, but could not find a contact e-mail. You can find me on Twitter @kimmolinkama. (If you follow my Google identity, you'll just end up in my Finnish-language blog.)

  2. Kimmo,

    Thank you for getting in touch. I would be flattered to be included in your blogroll.

    I have also been thinking about how to best leverage social media for B2B firms. I will try and collate some thoughts and do a post sometime this week.

    If you need to reach me, please email me at guptanitinonline at