Tuesday, May 24, 2011

5 ways social networks generate revenue for news sites

 The owner of a news site recently asked me about how to monetize the traffic he is generating through Twitter and Facebook.

While he likes the traffic, he is frustrated to see Facebook selling ads against his content and taking all the revenue.

Vadim Lavrusik of Mashable described some monetizing strategies in his article "How News Organizations Are Generating Revenue From Social Media".

-- Time.com is selling sponsored messages to its Twitter followers and Facebook fans. The risk, of course, is that these messages become so intrusive that they alienate users, so Time is limiting their number. In addition, Time has allowed sponsors to place their logos in the background of itsTwitter page, @Time.

-- Minnpost.com, a news site based in Minnesota, is offering a service called Real Time Ads in which a sponsor buys space on a page and, through a widget, displays its own recent feeds to Facebook, Twitter, YouTube, etc. It allows the advertisers the flexibility to update new offers and promotions through their feeds. As of last year, advertising contracts for this service totaled $15,000 annually.

Minnpost.com, which averaged 450,000 visits a month in the last quarter of 2010, also began offering a sponsorship of its RSS feeds last year, with a message that the feed is "brought to you by..."

-- Mallary Jean Tenore, writing for the Poynter Institute, reported that the Austin American Statesman allows advertisers to send two Tweets a day to its Twitter accounts, for $300. The Tweets have to be identified as an advertisement and their content has to have a call to action, such as a specific promotion.

-- Ad Age reported that the New York Times is selling ads that appear specifically to visitors who arrive through their Facebook and Twitter feeds. Evidently advertisers value this part of the Times’s audience.

-- Bill Mitchell at the Poynter Institute wrote that movie critic Roger Ebert sends out about four tweets a day that mention products available on Amazon.com with the link to that site. He receives 7 percent of any purchases made when his Twitter followers make after clicking on the link he provides.

For all of these strategies, it is too early to see which ones have long term potential and which ones alienate readers rather than engaging them. The point is that many experiments are under way, and I would like to make sure that news entrepreneurs are aware of the latest ones.

 If you know of other strategies for monetizing the social networks, please share them in the comments section on this blog. 

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