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.

Hire Smarter (or NOT) with Social Media

As marketing people, we love social media. And why not? Its comparatively inexpensive, has a broad reach and a variety of platforms available to establish thought leadership, demand generation and customer loyalty.

But one thing that companies need to understand before jumping onto the social media bandwagon is that social media is different from other online or traditional media. Social media is a sacred space. You get it right and you build long lasting customer loyalty. But if you get wrong, it is very hard to undo what you just did.

I recently came across this article on the Harvard blog about Hiring Smarter with Social Media (http://blogs.harvardbusiness.org/cs/2009/07/hire_smarter_with_social_media.html). While some of the ideas are good, I was astounded to read the following:

You can strike a balance by asking prospects to friend you for a limited time (24 or 48 hours) on any social network where they're personally identifiable, so you can see how they present themselves online and make sure there aren't any examples of bad judgement or online comments that could come back to haunt you (for example, griping about one of your clients).

Oh my god! A company who listens to this advice is not only limiting the pool of potential applicants but also exposing them to lawsuits related to discrimination. The info I share with my "friends" via Facebook or other such sites includes personal information that you would NEVER ask in an interview such as marital status, religious beliefs/affiliations, political views, etc.