Making Social Networks Pay, Part 2: Players and Products

Part 1 of this three-part series focuses on the strategies and technologies companies are employing to use online social networking as a marketing tool.

With an attractive force akin to the massive black hole at the center of the galaxy, online social networks have pulled into their orbits scores of new startups searching for profits.

The target: eyeballs. Last January, Facebook totaled 68 million unique visitors and 1.1 billion page views, and MySpace had 58 million unique visitors and 810 million page views, according to Compete.com’s analysis of Web browser data in the U.S.

The startups’ goal: Monetize these multitudes.

Their business models include listening platforms, ad servers and analytics applications based on finding — and marketing to — the key influencers who are expected to make purchasing recommendations to their networks of friends and followers.

Don’t Dive In Head-First

However, monetizers should proceed carefully, cautions one who’s already been there and moved on.

“It’s chasing a dream to believe that [if] you can find influencers and market to them, then the whole thing will spread virally,” said Sree Nagarajan, CEO of Colligent, a social network research firm.

“We tried influencer marketing,” Nagarajan told CRM Buyer. “Influencer marketing is not scalable, because influencers burn out very fast. You can only influence them for a few products or campaigns, and then they lose their impartiality and become less and less effective. If they take money for their recommendations, they lose their authenticity.”

Restraint is a must, agreed Nick Koudas, CEO of Canadian social network analysis company Sysomos.

“While you can get a lot from gathering and analyzing data, what you do with it — whether it’s making strategic decisions or tweaking an advertising campaign — is also a key element that turns data into intelligence,” Koudas told CRM Buyer. “Although there’s a lot of excitement about social media, it’s important to keep in mind that the market is still in its infancy, relatively speaking, as people work on getting a better handle on how to use social media tools and what they want to get from them.”

Still, many companies are charging ahead. Here’s an alphabetical listing of some of the emerging social network marketing vendors offering SaaS marketing automation applications and solutions that say they know exactly how social network monetization can take place:

• BuzzLogic, a San Francisco social media analysis and advertising company. Products:
  • Conversation Ad Targeting Platform & Network: Patent-pending influence algorithm considers more than a dozen factors in its influence calculation, including subject matter expertise, blogger relevance, popularity and credibility.
  • BuzzLogic Insights: Collaborative dashboard provides insight into dynamic conversations. Watchlists track the shifting influence of must-watch bloggers or up-and-coming opinion leaders — including company or competitor blogs. Social Maps visually depict who is linking to whom, illustrating the conversational community emerging around each post.

  “The first thing that the market needs to understand is the difference between monetizing social media and monetizing social networks,” BuzzLogic CEO Rob Crumpler told CRM Buyer. “People visit social networks to discover what another friend is reading. Invite people to events. Find out 25 new things about someone. Addictive? Yes. Commerce-driven? Not necessarily. Social networks are still primarily about relationships, not content. Focusing too heavily on social networks as the dominant component in a social media advertising mix ignores a sprawling landscape of consumer-generated media, like blogs, that is currently being identified, classified and aggregated by an army of both established and upstart ad networks.”

• Collective Intellect, Boulder, Col., is a social media analytics company. Products:
  • CI/Listen: Real-time dashboard and “listening” interface for marketers enables continuous monitoring and management of brands, campaigns and issues by tracking blogs, boards and news.
  • CI/Learn: Artificial intelligence solution analyzes unstructured data to uncover what consumers feel about a company, its brands, products, campaigns, categories, industry and competitors.
• Crimson Hexagon, Cambridge, Mass., provides customers with insight into consumer opinions about their brands, products or markets. Product:
  • VoxTrot: Patent-pending listening platform technology identifies opinion from large quantities of text, whether an in-house content repository or the blogosphere. Users access a private, customized dashboard providing two views:
    • Opinion Monitor has its roots in a statistical algorithm created by Gary King, a professor at Harvard University’s Institute for Quantitative Social Science. Opinion Monitor analyzes the social Web (blog posts, forum messages, Tweets, etc.) by identifying statistical patterns in the words used to express opinions on different topics.
    • VoxTrot Buzz shows the volume of mentions and positive/negative sentiment on topics of the customer’s choosing, across the Web and social media sources.
• Lotame Solutions, Elkridge, Md., is a social media marketing firm. Product:

  • Crowd Control Technology:

  An analytics package designed to target consumers based on interests that have been actively and recently demonstrated through social Web activity such as blogging, uploading pictures, commenting, watching a video, etc.

“Behavioral targeting is helpful in delivering online advertisements to the users who are most likely to be influenced by them,” Lotame CEO Andy Monfried told CRM Buyer, “but many marketers are interested in having their users do the influencing. By aggregating data unique to the social Web, brands can build customized audiences and reach the people who matter … including influencers.”

Making Social Networks Pay, Part 1: Strategies and Technologies