Face Palm: Monetizing Facebook and Other Websites Made Easy
Facebook revealed this week that it will be tagging news items from "The Onion" as satire as it has received many complaints from members confused the style of humor. This announcement comes just days after Facebook's decision to begin charging a $9.99 monthly subscription fee for membership beginning in September for its satire-challenged members. OK. The part about the social networking king charging was satire about satire. But Facebook, like many free websites are not joking about looking for innovative ways to monetize. And it's been a tough road to hoe and the road just installed toll booths. But I always know a short cut.
I make a large majority of purchases online, so I don't begrudge any website trying to monetize its efforts. But when you start off as free, it's difficult not to mention risky to start charging for your intangible services. Their remuneration is paid in data. Our information currency. But security issues and privacy acts have been catapulted to the forefront. Now though I commend Facebook on the wise decision of keeping membership free, I actually feel bad for its marketing team as any move it makes is highly criticized and often unfairly attacked. To the online community, what begins free must always remain free. At least that's what they believe.
This is not to say that charging for something that was once free is doomed for failure. I can think of many sites, that offered it services for free initially and then began charging. But these sites most of them web apps and software services from the outset let it's free users know that the free ride was either limited by time or by functionality.
Many e-mail marketing web-based software services handle this quite well. They either limit the number of e-mails you can send for the contacts you can send to, but you know when you sign-up that if you like it you will pay for. Sort of like the free sample station at Trader Joe's.
I'm a heavy Facebook user. I use it to correspond often with close friends and relatives, occasionally with old school chums and business associates, but most of my correspondence are with my Facebook-only Friends. These are people whom I never have and likely never will meet or even chat with over the phone. Losing contact with them to be a great loss but one I would accept begrudgingly if Facebook was to start charging. And most of the people I know on Facebook would follow suit. It comes down to perceive value. For example, many Netflix customers who rarely rent a movie, spend hours on Facebook each day. But if they could only justify paying for one, which one do you think it would be?
Actually, Facebook has started to charge its members in a roundabout way by limiting who sees your posts and status updates. Now for a fee, you can "promote" your post for everyone to see. Nice innovation, poor execution. There are better ways - like monetizing its brand and partner interfaces - to increase its profits. They tried a phone that didn't fare well. I'm not saying it's easy with such a huge infrastructure but it's possible. My solution involves a hybrid between an AOL redux and a plug and play, build-your-own Interface similar to WordPress modules. I'm sure there are many others.
Google was in a similar situation several years back and reinvented advertising with keyword sponsorship and its AdWords. And after an initial struggle Facebook seems to be doing better with it sponsored ads but in a future article I will discuss how that world is about to see it's bubble burst.