This is a guest post by Nate Bagley.
One of the biggest problems currently facing many major Social Media sites (aside from trolls) is monetization. They thrive on VC and Angel funding while trying to find a way to be cash flow positive without turning off scores of users with intrusive ads. The most obvious example of this is the Twitters.
Twitter has yet to turn a profit, because they are avoiding “selling out” by diluting the value of their amazing service with a bombardment of ads or making their service subscription based. The simplicity of the site, however, doesn’t allow for many other monetization opportunities.
Unfortunately the data generated by Twitter isn’t valuable enough to be sold. Twitter Search allows companies to obtain a real-time sampling of the sentiment surrounding their brand. They get a taste as to what people are saying, but the information is rarely measurable or actionable. Data that can’t be measured is virtually useless.
The value of Facebook, on the other hand, is not only the sheer number of pre-pubescent digital farmers, mobsters and vampires using the site, but the amount of data they make freely accessible to advertisers. Facebook’s Ad Platform allows advertisers to target incredibly specific demographics, narrowing them down by age, location, gender, political affiliation, religion, relationships status and even entertainment preferences. They have taken hypertargeting to a whole new level, and have done so without infecting their website with an overabundance of crappy ads.
Location based sites like Foursquare and Gowalla are pushing the envelope of innovation and breaking new ground yet again. If they play their cards right, they can avoid the awkward financial walk of shame experienced by Twitter by offering an incredibly unique data set to their clients.
Foursquare is already pouncing on this opportunity by offering an analytics service to clients. Foursquare’s analytics platform includes information regarding where customers are coming from, peak hours of business, and the gender and frequency of returning customers.
In my opinion, Foursquare’s vision will have an industry-changing impact when they take their analytics service to the next level by implementing a survey feedback tool. Customer feedback surveys allow businesses to get detailed, real time information regarding quality and speed of service, cleanliness, friendliness of staff, etc.
Rewarding customers with a popsicle or a Dr. Pepper for helping improve the systems and service of their favorite establishments with real-time, relevant data helps build relationships, form a community and is essentially the future of social media. (You’d be surprised what some of us would do for a free Dr. Pepper.)
The Customer Feedback Managment Industry is a very fragmented, multi-billion dollar market. These location based sites are the future of the industry, and most people don’t have the foresight to see it. Before you know it, Social Media is going to dramatically shift hundreds of industries once again, and those who aren’t prepared are going to get left behind.
The fact of the matter is that Social Media is still in its youth. We are still learning how to measure its influence and impact. As the Social Media world evolves, and companies like Foursquare develop tools that provide real value, Social Media will become mainstream and essential to a business’ long term success.
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Nate Bagley is a Communications Major at Utah Valley University, and will be graduating April 2010. He has over 3 years of experience in SEO, PPC and Social Media marketing.
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Read more social media strategy on this social media blog.