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Social Media Monetization on the Rise

Social Media Monetization is and always will be the wave for personal, small business, and corporate branding.  

Social media is the most public example of successful social media monetization, with social developers selling online products directly to the online consumer. Companies like Burger King, Blue Cross, Playfish, Zappos, Starbucks, Sun Micro Systems, and hundreds of others are completely re-writing their marketing strategy for online social media optimization and monetization success. 

It’s hard to argue that social media isn’t the future for revenue and passive income and developers and publishers should focus all their efforts here. That said, over the long haul I absolutely believe brand advertising will lead social media monetization, and companies not investing in working with brand advertisers today will miss the biggest opportunity within social media for the future.

To believe it, you have to assume two things. First, that social media will comprise the vast majority of total online engagement over the next 5-10 years, and become the initial point of entry for a major portion of online activity.  Social media networks like Facebook, MySpace and Twitter are material sources of traffic for publishers, with Facebook the top traffic driver for sites such as PerezHilton, CafeMom and EVite. Facebook Connect and Friend Connect have been adopted by more than 15,000 sites, and there’s no reason why every site looking to drive substantial and meaningful free traffic through social awareness wouldn’t adopt these services as well. Doing so enables social media across the entire web.

Second, the vast volume of brand advertising spent on non-online media (TV, radio and print) will finally be realized online. The recession has dramatically accelerated the drop in spending to non-online media in comparison to online. With more than $300B in U.S. advertising spent alone, at $28B in the U.S., online marketing is only 9% of the total. At just 15% of the market, online spending could quickly increase to $45B over the course of the next five years, much of that driven by the transition of brand advertising from offline advertising to online advertising.

As social media continues on with its exponential growth, it’s not difficult to assume social media advertising will comprise a material portion of that $45B, much of it driven by brand marketing based on the aforementioned offline transition. Compare that to the nearly 40% of online spending focused on search marketing today, with the increasing use of social media as a top traffic driver for sites and blogs.

Simply put, brand marketing has a high probability and deserves real focus from networkers, developers and publishers given it’s true potential within social media.