Your Content is About to Be Worth $4.3B

MediaWeek reports that advertising on social networks, blogs and other venues where consumers produce content is about to become a much bigger business than it is now. It's on pace to be a billion-dollar business this year. However, by 2011 it will grow to a whopping $4.3B, eMarketer says.

Unfortunately, it's not all candy canes and lollipops. The picture is not so rosy when you think about it.

For starters, the people who create all this content that's getting monetized - you, me, your Aunt Tilly - are not going to continue doing so for free. If the platforms are getting all of the financial gain, then the community should stand to get a significant share of that money. Sites should start to implement these systems now in a fair and ethical way.

Second, people are getting a lot more sophisticated when it comes to ad blocking technology. Younger, more technically adept users have extensions installed. Take a look at digg, for example. However, it's going more mainstream. For example, the new version of Camino on the Mac has ad blocking built right into the browser. There will be an arms race between those who serve banner ads and the ad blockers that's similar to the spam wars of today.

Finally, above all, advertising ROI on community sites won't work so well in a vacuum. They will need to be buttressed by other initiatives that engage the audience around a shared desired outcome. These are more risky than banner ads but have a higher payoff when executed in a meaningful way.

Comments

[Steve Weber]

One of the networks I really like, Gather.com, compensates members for participating (contributing articles and photos, comments, etc.). I'm hoping they'll be more generous in the future. I've submitted eight articles so far and I've racked up $1.75 in earnings ;-)

As someone said, "The best advertising is free advertising."

[Valeria Maltoni]

"They will need to be buttressed by other initiatives that engage the audience around a shared desired outcome. These are more risky than banner ads but have a higher payoff when executed in a meaningful way."

You are so onto something here. I am loving the new direction of this blog and discussion, BTW. I see permission-based marketing integrated with incentives to participate as a winning combination.

I'll be curious to see what others think.

[Jason]

This is interesting. However, I do think that it is not as big of a problem for users as the Anti-Ad companies make it out to be. Good advertising is well placed and follows the general theme of the website. On the other hand, Spam is in its own category of annoying chaotic profit.

[linuskendall]

Thanks for an interesting post!

I still feel as for the end user the ads that are positioned on websites aren't targeted enough - it feels like you receive a lot of irrelevant material through ads..

I agree with you that the communities need to integrate the users, their content and their participation into the revenue sharing for the ads. Take facebook for example - they desperately need to build a revenue model for their applications (now that more and more of the actual usage of the service is handed over to application generated pages/services). In this case we have a quite complex model - where users are providing content & the spreading, third party developers a lot of the services and then the facebook developers the platform.

Interesting to see how the service providers manage to share revenue with their content creators - while still making their services/platforms sustainable.

-L

[Anthony King]

Thankyou. Please make out the cheque to:

"Anthony King"

Many thanks!

[James]

What would it take for you to add the one.org banner to your blog to support charity? I have added it to my own and would love to see other bloggers amplify the need to stomp out poverty.

If the activism irritates you then I understand...

James McGovern
http://duckdown.blogspot.com

[greasyguide]

AssociatedContent.com is the only website who have been successful in paying it's community members for the creation of text and video content. The site has over 70K member and many of them are gaining exposure in the mainstream media. It's only a mater of time before Associated Content because a seriously powerful company with it's ability to tap into user created content better then anyone else.

[Josh Bernoff]

You said:

"For starters, the people who create all this content that's getting monetized - you, me, your Aunt Tilly - are not going to continue doing so for free. If the platforms are getting all of the financial gain, then the community should stand to get a significant share of that money. Sites should start to implement these systems now in a fair and ethical way."

I disagree. From talking to people participating in social media, they mostly don't do it for the money. They do it because they love to do it. Phrases like "the community should" implies that people in the groundswell we call social media are like a union -- they'll go on strike if you don't give them what they want. But they're not so coordinated as that. In fact, they'll do what comes naturally -- communicate with each other on platforms that make it easy to do so.

I do think that too many ads will kill a platform. Many participants in such a platform will jump ship and start over elsewhere. But they're leaving for a better experience, not to get paid.

If money was driving things Revver would be 10x the size of YouTube instead of the reverse . . .

[Ty Graham]

I had a dream one day long ago that my content on my distribution choices were my property and I reserved the right to grow all of the potential that the content sites throw at me to keep my content fresh and their cash flowing. Then I woke up and realized the dream wasn't about content at all. It was about my right to preserve my presence through media.

Never give up on realizing dreams. Everyone will go to sleep one day yearning for that one idea to make money while sleeping. Only the ones who dream the hardest envision the breakthrough that others still dream about. When that idea moves from dream to reality, opportunity equalizes all barriers. The Secret is almost out, one idea will wake up dreamers big and small still unaware the solution already exists, elegantly.

Millions will make money in their sleep soon, and the modeled solution will look as different as the evolution from a web site into a social network. A web site never comes with opportunity built-in to it's success as a growth model. Many times over people realized if you build it, they will not come. Social networks inherently have opportunity built-in from launch because of the increased value placed on people's relationships to create opportunity with each other - beyond content limitations. History will repeat, content will no longer be king. The people will move media as the new king of the internet because while content rights threaten to stifle growth and commerce, media exponentially grows content and commerce as a new built-in opportunity that did not exist with before with just content. It's almost time for the industry to wake up pay attention to media's built-in opportunity about to evolve into the marketplace, because soon, everyone is going to get blipd!

[OpenSourceMarketer]

Word of mouth has been, is, and will alway be the best form of advertising. The Internet simply makes it possible to associate a financial reward to that action. The traditional model of advertising has tried to work outside of that communication channel to blanket the general population in a desire to impose some form of influence. Social media is bringing about a shift in the way content is generated and a change in the way that content is consumed. Advertising has to become more conversational and personal with an element of benefit to it for those being targeted to listen. Advertisers would do well to not fight against their audience and instead give them what they want in a form that they want. Then and only then will any true form of seduction and influence occur.

[Eric Miltsch]

We're still seeing the infancy of developing passive income...so much more to come.

Awesome post.

[Lee Amon]

I don't buy it. What makes the content valuable is the ability to deliver actual buyers to the right place. So everyone and his brother is publishing on the net, OK how many people are looking at any one?

The other thing to remember is the effect of supply and demand. Already with blogs and other new media, the available supply of places to advertise (ie people trying to sell advertising to businesses) has increased dramatically. Basic economics says that as the supply of something goes up, the price goes down.

[Alan Marks]

Well, I thought that it would be a lot more than that amount. If you look at companies like YouTube which was sold for $1.5bn, that is almost totally UGC.

Even to the point of these comments, these are user generated, and if you have adsense on this, then that will be generating some form of income.

[Chris McElroy aka NameCritic]

Lee Amon said "I don't buy it. What makes the content valuable is the ability to deliver actual buyers to the right place. So everyone and his brother is publishing on the net, OK how many people are looking at any one?"

I agree. There is a huge difference between professional content providers who get results and people who are posting on social media websites. Just "any" content, "any" set of words is not necessarily worth a dime.

As someone else said. The people in these communities are not there for the money and there will always be people who wish to participate for free is they like the platform and have a good user experience from the community they join.

I've managed a lot of forums, "the early form of social networking", and there are always people who participate for free. Even some who will moderate and edit for free IF they like the community.

No one will turn down hard cold cash if some networking site gives it to them but the business model doesn't work. It's not even a new idea. Forums have tried paying people to post. The forums that do this turn into garbage and they are soon off the web and broke.

Social networking works because the users respect it for what it is. Try to turn them into professional posters and the site loses all respect of it's own users. Then you have p-eople joining just to post for money and the original members of that community resent them and resent the owners for ruining their community.

The author's comment "For starters, the people who create all this content that's getting monetized - you, me, your Aunt Tilly - are not going to continue doing so for free. If the platforms are getting all of the financial gain, then the community should stand to get a significant share of that money. Sites should start to implement these systems now in a fair and ethical way." just shows he must be new to all this.

I don't mean to sound harsh, but this statement is false and history proves it. People edited DMOZ for free. People participate in forums for free. They comment on blogs for free. They are not doing it for monetary gain. There will always be people who do this. I'm commenting on your post for free right now.

Feel free to cut me a check for 15 cents per word since I am a professional content provider.