The Key to Social Networking Site Monetization: The Long Tail and Niche Sites

[mandy]

Any vision of social networking these days is bound to encounter the question of monetization. Despite the tens of millions of people who have created profiles on MySpace and Facebook, those sites are still struggling to turn a profit.

Niche Sites for Profits
The short answer to the monetization question is, of course, advertising. But as News Corp. CEO Rupert Murdoch quipped on his company's most recent earnings call, selling ads on social networks is hard. As Anderson explained it, the problem is targeting. Because the membership of those sites is so varied, targeting ads effectively and in a way that respects users' privacy has so far been an unsolvable problem.

Whereas the typical CPM (cost per thousand impressions) for an ad on Facebook or MySpace might be around 20 cents to 30 cents, Anderson said that his own Ning-based DIY Drones site enjoys CPMs of around $7 through Google AdSense.

The reason? A smaller community formed around a specific interest means a more qualified audience...

full article: http://www.ecommerce-guide.com/news/tren...hp/3748961

[robel]

course, advertising. But as News Corp. CEO Rupert Murdoch quipped on his company's most recent earnings call, selling ads on social networks is hard. As Anderson explained it, the problem is targeting.