economics of social media
Is there really any hope for paid digital content?
Jan 1st
I’ve been involved in a couple interesting scenarios lately involving the idea of paying for digital content.
- I am a contributor to the awesome Content Marketing Institute but customers told CMI that they don’t have the time or budget to pay for more content. Clients need help in actually doing the marketing, so the CMI business model is rapidly adapting to their needs.
- As a subscriber to Marketing Profs for two years, I won’t be renewing my subscription. They still do a good job but I don’t have time to participate in their seminars, which are too similar to free content I can access elsewhere.
- I was approached to work on a project to provide content to a paid forum for small business owners. I am already giving away a lot of valuable personal advice on my blog every day. Would people pay to read what I write?
So as I’m thinking about these situations, along comes new data from Pew Research stating that 65% of internet users have paid for online content. That headline is getting a lot of airplay. Let’s look at the “content” contained in the report and the percentage of adults who paid for it:
- Music: 33 percent
- Software: 33 percent
- Apps: 21 percent
- Games: 19 percent
- A newspaper, magazine, journal article or special report: 18 percent
- Online videos, movies or TV: 16 percent
- Ringtones: 15 percent
- Photos: 12 percent
- Premium or members-only content on a particular website: 11 percent
- E-book: 10 percent
- Podcasts: 7 percent
- Porn: 2 percent
It seems there are big opportunities represented by these numbers, right? Let’s get back to this research in a moment but first turn to the always thought-provoking Mitch Joel, who hypothesizes in his Six Pixels blog that people will pay for content under certain conditions:
- It must be mobile.
- It must be asynchronous.
- It must have added multimedia value (bonus material).
- It must be easy to access.
- It must be easy to download/stream.
- It must do more than simply being a digital version of the traditional platform.
- It must be able to make itself more shareable, findable and social.
I like this list but would add three other critical conditions which radically change the game for anybody with hopes of making money off their content:
1) It must be entertaining – Less than three years ago the most popular videos on YouTube were of brides falling into swimming pools. Now the list is dominated by slickly-produced mini-movies featuring the best brands and entertainers in the world. Can you compete on that level? As the web becomes flooded with content it is going to take some element of sizzle to cut through the clutter in a way powerful enough to attract consumer dollars.
2) It must be scarce — This is the lesson of Marketing Profs. When the content was scarce I paid for it, if it isn’t I won’t. If you write another blog post about the ROI of social media I won’t read it let alone pay for it. But if you write an eBook that offers truly unique advice and insight found nowhere else I might be willing to plunk down a few dineros.
3) It must be targeted to adults – The Pew study was limited to ADULTS who willingly and routinely pay for content. But if the Pew research studied a younger demographic, the results would be vastly different. An example — I have two kids and two step-kids between the ages of 25 and 19. They would not think of paying for content in any form, ever. They’ve shown me how they can access extremely sophisticated and expensive branded software programs for free. This is a generation conditioned to believe that paying for digital content only demonstrates you’re to lazy to figure out how to get it for free.
So while an initial glance at the Pew research might be encouraging and Mitch’s post gushes optimism, these three factors severely limit practical opportunities to scale paid content for most individuals and small businesses. Maybe any business in the long-term.
Of course there are lots of ways to indirectly make money from content through advertising, affiliate marketing and lead generation, but I believe the one hope for making money directly off of content sales resides with micro-payments.
This is an idea that has failed in various forms for 20 years but might finally be taking off with Facebook’s new credit system. It could work like this: Somebody reads a blog post or listens to an original song and is able to click a special “like” button that extracts a few cents from their Paypal account. That would absolutely change the game for monetizing content.
A timely and vital subject for bloggers and marketers is it not? What’s your take on the opportunities? Please contribute your observation or idea in the comment section!
Social media success story: Marketing a medical practice
Dec 8th
Here is one of the toughest marketing challenges I can imagine — engage customers with a medical practice, which of course is surrounded by patient privacy issues. To make things even more difficult, the practice specializes in cosmetic surgery — not a subject people usually want to pronounce in a public sort of way. Add in a recession and some intense competition, and you have yourself one massive marketing mountain to climb.
Unless you possess the business savvy of Lisa Reath. Lisa is the marketing manager of her husband’s medical practice (and a graduate of my social media marketing class) and she’s developed one of the most interesting and successful social media marketing programs I have seen – under some tough circumstances.
Lisa had been trying to promote the business through traditional media but was excited by the possibilities of the social web. ”We made our share of mistakes at first,” she said, “but things started to click when we learned that our marketing should focus on being authentically helpful instead of the traditional sales-orientation. We’re doing this by providing targeted patient education in a fun way using new media. Our goal is to establish a relationship with patients so that when they come into our office, they feel like they already know us.”
The medical practice deploys a variety of social media methods:
Facebook
“Given the privacy expectations with plastic surgery, we have had surprising success with Facebook,” Lisa said. “It’s largely because of a quiz game we play every week with our fans. We came up with the “Truth-O-Meter” to establish ourselves as an authority and sort through all the misconceptions surrounding plastic surgery.”
Every Tuesday morning Dr. Reath posts a question on the Facebook page. A winner is randomly chosen from the correct answers and announced by a short YouTube video every Wednesday. Between 30 and 60 people answer each week, including many potential new patients. Prizes include giftcards, skin care products and contributions to charity in honor of breast cancer awareness month.
And a nice side effect of Truth-O-Meter Tuesday is that the practice has a growing collection of relevant videos on YouTube!
Facebook is now the fourth leading contributor of traffic to the clinic’s website.
Blogging
Dr. Reath keeps patients current by blogging on hot topics in plastic surgery. Recent blog posts include:
New “Bridalplasty” Show: Bad TV. Even Worse Medicine.
The List: Every Board-Certified Plastic Surgeon in Knoxville
New Trend: Patients Having “Work” to Find Work
eBook
“I think our most successful marketing effort is the new 33-page interactive eBook written by our staff,” she said. “It is designed to be read online or on an iPad, downloaded free, easily forwarded and linked to.
“It was written in response to the increase in the number of patients coming to our office with problems after having surgery with doctors who are not Board-certified plastic surgeons. Our idea was to offer patients free information about breast augmentation that is helpful but not easily found online. Chapters are informative but also entertaining (otherwise no one will want to read it and forward it to their friends!).
“Since we designed the eBook to be a helpful resource, we went out of our way to try not to directly sell our practice.”
The results
There are measurable gains from the social media exposure:
- The social media efforts have dramatically increased traffic to the medical practice website and resulted in new customers. Many people who participate in the contest request additional information and typically when they come in to collect a prize they become a customer for skin care products.
- Within the first month of publishing the eBook, the practice received six new customers solely based on that publication. In addition, patients are forwarding it to friends and relatives who are considering the surgery.
- The constant contact with patients through social media provides an opportunity for the medical practice to stay connected and at the top of mind when it comes time for an elective surgery or procedure.
I’m proud of Lisa and think this is an enegerizing success story in an unlikely place. Agree?
To succeed in social media, set aside your marketing plan
Oct 31st
Forget your marketing PLAN? Have I gone MAD??
Every good social media plan STARTS with a solid marketing strategy but social media efforts are sub-optimized if a company is too wedded to long-term plans and can’t respond to sales opportunities happening RIGHT NOW in front of their noses. To succeed, let’s put the long-term plans aside for a moment and consider a new way to think about and organize around the social web called REACTIVE MARKETING. Let’s look at some examples …
Where’s the beef? A large restaurant chain was frustrated that the only thing that generated Facebook traffic was coupons. And why not? They had conditioned their customers to expect discounts every week! Wait a minute. They were giving the customers money. Isn’t it supposed to be the other way around?
I showed them a way they could tune into conversations through a simple saved Twitter search. Immediately, they found hundreds of real-time needs from people looking for recommendations, or the best pub in town, or a place to take a date. The chain had been too worried about planning next month’s promotion schedule while ignoring the real money-making opportunities of listening and responding, listening and responding.
Un-clog your blog. A B2B company has a content marketing plan that extended out for the next three months. Meanwhile, they had ignored a major market shift caused by a regulatory change. Instead of grabbing this opportunity to establish a voice of authority and educate their customers on the implications of this ruling, they adhered to this traditional mindset of sticking to a marketing plan while the real world passed them by.
Bring the heat. A local heating and air service company discovered a significant opportunity when they saw a series of tweets complaining about their largest competitor. Responding to complaints that their competitors ignored opened opportunities to create loyal new customers. They are thinking of reducing their newspaper ad budget since this customer acquisition strategy worked so well.
Listen to me NOW. I sent out a tweet mentioning that I was in the market for a video camera. Within 20 minutes I had three tweets back offering specials on cameras. While that seems like a good example of reactive marketing, none of the companies followed up with me after the first tweet. Nobody closed the deal. These companies organized their marketing efforts around the real-time opportunities of the social web but didn’t provide employees with the authority to go out there and actually sell me something.
Foursquare is still Bore-square. I’m still messing around with Foursquare although after several months I have yet to find any concrete value as a consumer. But some day, I am going to “check in” at a retail location, an employee is going to address me by name, shake my hand and offer me a special deal for just checking in. This would represent “reactive” marketing right at the point of sale. The social connection is not between me and somebody in a corporate office, it’s between me and the college student who is the department manager at the local retail tore.
Can you begin to see the opportunities? The chance for connecting with new customers on the social web is not coming through a strategy document you just prepared for your CEO. It’s in connecting with people who need you RIGHT NOW! It’s all about being reactive!
This presents dramatic implications for a sales and marketing department.
1) There’s a need to develop a culture with a discipline to tune-in, stay tuned, and react to market shifts and new competitive opportunities.
2) Here’s the big one. You need to drive the authority to sell and react to the people on the front lines and establish appropriate goals and rewards for their reactive marketing efforts.
3) Every successful marketing tactic starts with a good strategy. I’m not advocating tossing out a marketing strategy. I’m suggesting that you adjust your plans to adapt to the real-time sales opportunities of the social web.
The largest brands understand this but I think this is an enormous opportunity for small and medium-sized companies. What’s your take? Have you seen much reactive marketing in your part of the world?
Can you make money from your Twitter stream? Mack Collier just did it.
Oct 13th
Very quietly, a significant milestone occurred last Sunday night. Blogger and consultant Mack Collier monetized a Twitter conversation. That’s right. Mack made money from other people’s tweets on a free and public platform. I think this is one of the most clever and interesting social media stories of the year and Mack agreed to tell us about it in this interview.
Mack, I noticed on your well-known #blogchat that you had a sponsor for the first time. What an achievement for you! How did it come about?
A couple of months ago I was thinking that there is SO much that I would love to do to help grow the #Blogchat community. For example, I would love to start a blog devoted to #Blogchat, and I have transcripts from over 40 previous #Blogchats that I would love to share with everyone. But I just don’t have time to do these things as I am trying to grow my own consulting business at the same time.
That’s when I started toying with the idea of bringing on sponsors. Because if I could start getting some money coming in from sponsors, then I could justify spending more time and money on growing the #Blogchat community.
You noted that most of the feedback has been positive so far. How do you intend to salt in other sponsors in the future
Honestly, there may never be another sponsored #Blogchat. The main reason why is because I am going to be extremely picky about the sponsored topics, and making sure that potential sponsors can speak to those topics. For the first sponsored #Blogchat last Sunday with Grant from Headway, it made perfect sense. Picking a blog theme/template is a topic that #Blogchatters have asked about before, and Grant could speak to it better than I could. Plus it was a great chance for him to get exposure to hundreds of potential customers.
So it was a win-win for everyone. #Blogchatters get an expert covering a topic they were interested in, and the sponsor gets exposure and access to hundreds of potential customers.
But at the end of the day, I want sponsored #Blogchats to be as close to a ‘regular’ #Blogchat as possible. If someone can join a sponsored #Blogchat in the middle and recognize it as being sponsored, then I have done something wrong.
Obviously the sponsor was attracted to #Blogchat because of the high number of targeted clients you attract each week. I’m amazed at how quickly this little property has taken off. What’s been the secret?
I don’t know if there is one “secret.” Two things I have done that have really helped #Blogchat:
1 – I’ve encouraged EVERYONE to join. I’ve always been of the mindset that the more participants in a conversation, the better. And that might sound like it could be confusing, but what happens with #Blogchat is that everyone comes in under a certain topic, but as the #Blogchat progresses, this small cluster of people will start talking about this particular aspect of the larger topic, and this small cluster will talk about a slightly different take on the same topic.
I view it as a large coffeehouse where everyone is talking about the same topic, but each table is having a slightly different take on the larger topic. So you mingle and find the conversation that’s right for you, and join in!
And I am relentless about welcoming new people to #Blogchat. I want people to feel welcome joining and understand that there are NO experts allowed, we are all coming to learn from each other. People respect and appreciate that, I think.
2 – I give #Blogchatters as much say into the topics as I can. For example, one of the most popular #Blogchats are the monthly OPEN MIC chats that happen the last Sunday of every month. This started as a complete accident. One Sunday nite I couldn’t join #Blogchat, and I really didn’t want to cancel it because I didn’t want to disappoint everyone. So my only option was to make it open mic, meaning everyone that joined #Blogchat picked whatever topic they wanted to talk about.
I honestly thought it would be a complete disaster, but it ended up going pretty well. What I loved was that some of the regulars took it upon themselves to ‘police’ the group and let them know what the deal was for that #Blogchat. The session was so popular that I asked everyone if they’d like to do an OPEN MIC #Blogchat every month and they overwhelmingly said they would, so we added it.
How long has it taken to bring #Blogchat to this point? Do you have other ideas on how to further develop and promote #Blogchat as a brand?
The first #Blogchat was March 22, 2009. Here’s the recap post I did the next day.
As for ideas, as I mentioned above, I’d love to get a #Blogchat blog started, and have that be more a space for the #Blogchat regulars to post, more than me. And I really want to get these transcripts up and let others have access to them, and I’d also like to make an ebook or two with the best insights from some of our amazing co-hosts, and give that away to participants.
Personally I find it difficult to follow a Twitter chat because of the multiple, concurrent conversation streams. What advice would you give people to participate effectively in Twitter chats, especially as your audience grows?
Yeah that’s the one thing about #Blogchat that I hear the most “complaints” about. It just moves too damn fast for a lot of people to keep up with.
Personally, I use TweetChat,com to keep up with #Blogchat. One neat feature of Tweetchat is that you can “”eature’ tweets from a user, which means Tweetchat will add a colored band around their tweets which makes it very easy to see them as the flood of tweets passes by.
Another good idea, especially if the chat has a co-host, is to follow in Tweetdeck, and create one columns for all #Blogchat tweets, then another for the co-hosts’ tweets, and probably another for the host’s tweets. I know many on #Blogchat use TweetGrid as well.
Thanks for relating this story of your success, Mack. How can people find you on the web?
You can find me at my site – http://www.mackcollier.com or on Twitter at http://www.twitter.com/mackcollier.
And I’d like to invite all your readers to check out #Blogchat, it happens every Sunday nite starting at 8pm Central. Thanks Mark!
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