ITEC 4700: Class 16 – Monetizing Web 2.0


Thursday we started off with several of my students asking if my Twitter account had been hacked. And yes, it had. Someone got in and sent out the following message: ‘hi, i’m 24/female/horny… i have to get off here but message me on my windows live messenger name *****’. They had direct messaged a large number of my followers. (I was also alerted by someone who follows me.) I sent out the following message to ensure those that follow know I had been hacked: ‘My apologies. My account has been hacked! I am in fact NOT a horny 24 year old female.’. One of the few things I don’t like about the Internet.

After that we  talked about Monetizing Web 2.0 by cutting costs and/or generating revenue. From sales leads, customer service, brand awareness to research, businesses need to consider the following channels:

  • Online – web site, email, affiliate, etc
  • Social – Facebook, YouTube, flickr, etc
  • Touchweb (smartphone)- the mobile web
  • Applications – iPhone, Android, BlackBerry
  • Print – Yes. I said it. Niche specific magazines are booming and of course I believe they should incorporate things like augmented reality much like Esquire recently did.

We then framed businesses into two categories; product or a service. Businesses that create products need to look to:

  1. Virtualizing their product
  2. Niche Advertising – On average the CPM rate is 4x that of standard advertising. Also, don’t kid yourself, the days of CPM are numbered and we are screaming towards a CPA model which makes contextual advertising even more important. It’s best to think of this form of advertising as niche content. If you go to Newschoolers you probably shouldn’t see ads for feminine hygiene products.
  3. Coupons – This is a concept we’re all used to and mobile coupons for those in loyalty programs is one example. Make these coupons something that can be shared to help build your database.
  4. Negotiation – empower those on the front line to move product. Competition is more fierce than ever.
  5. Strategic partnerships – Bundle your product with others when selling items from within an iPhone app (or any other channel for that matter). Link your products to increase the chances of getting recommended.
  6. Collaboration – Partner with your customers like Icelantic Skis has or Karmaloop.
  7. Augmented reality – Product demos (in-store/at home) are something that people will share with others.
  8. QR codes – Putting these codes on packaging allows users to discover additional information online. Information/entertainment and/or communication that can be become a social object if done well.

As for services the list below is recommended to drive revenue

  1. Subscriptions – Rupert Murdoch & Berry Diller believe you will pay for content. I agree with Chris Anderson that people will pay for niche content. The more niche the better and this content will be the keystone for the niche social networks.
  2. Niche content  – <see above>
  3. Traditional advertising – I loathe this type of advertising and yet it can diversify revenue.
  4. Freemium – Pay a subscription fee and members don’t see any ads. Get it for free and see lots of ads. Either way the business get’s paid and the member is in charge.
  5. Strategic partnerships – Be careful before you partner with a company. Make sure you understand how much social capital they have and how the social capital you have earned (or are planning toe earn) will match up. (eg. are 100% customer focused like Zappos)
  6. Augmented reality – Insert a branded AR logo in a magazine that your target market goes after. Make sure the virtual experience is compelling and easy to view. I didn’t like the fact that I had to install an app from Esquire on my machine to get the AR to work. GE’s Smart grid simply created a separate browser window.
  7. QR codes – Paint the town with QR code stickers to drive business to your site. Few users are doing this now but this behavior will continue to grow. You want to get early adopters since they are the new taste-makers.

We then reviewed what businesses should be doing based on venue. Again, the venues (listed above) are online, social media, touchweb, applications and print.

Online is a huge category and you could (and maybe should) include the touchweb and social media. But I didnt. Here are the things you should be doing online.

  1. SEO – If your site can’t be discovered, you don’t exist.
  2. Adsense – Google’s adsense is very successful with its text-based ads. I like to call this out separate from advertising because of its location in the overall flow.
  3. Advertising – <see section below>
  4. Affiliate – Sharing links with other sites that fit into your business landscape increases SEO and allows others to find you outside of search and SEM.
  5. SEM – These are the paid text based ads on the right hand side of the search results page.

For social media

  1. Social advertising – This is done on Facebook and outlined here.
  2. Lotame – This is a great firm that identifies influencers specific to your goals and then helps you put together an offering for them to share. (e.g. a new movie is coming out and they find the right crowd to give the first movie preview to.)
  3. Conduits – Make sure that your customer/potential customers can share your product/service with others. This could be a YouTube video, Flash-based product demo, forward to a friend, etc. Let customers/potential customers market for you but remember, your product/service needs to be worthy of recommendation.
  4. Twitter coupons – Send out offers to your customers via Twitter.
  5. Sales leads – Keep connected with those that may have a need in the future through LinkedIn, Twitter or Facebook. Much of social media is networking and you’ll give business to those you know.

For the touchweb (smartphones)

  • iPhone (& iPad) – Applications themselves have become social objects. People with iPhones are always asking each other what new apps they have downloaded. The iPad is going to be a monster hit and will change the way many utilize the Internet and applications. How should your application address the differences of the iPad and how much more should you charge for it? If you give the iPhone version away for free you may want to charge for the iPad version.
  • Search based – Mobile advertising is expected to make up 73% of all mobile advertising within 3 short years. Make sure your company participating appropriately.
  • Coupons – Again, coupons have the opportunity to become much more social when they are shared with a smartphone. Bump the smartphones together to share the coupon.
  • Product demo – If a customer can see a small product demo on my smartphone while standing in front of the actual product, it will them make a decision.


  1. Revenue from app – This is easier to do for a service than it is for a product AND if businesses start to virtualize their products, applications would be the perfect vehicle.
  2. In app transactions – Many are giving apps away with the expectation that users will buy items from within the app. Distimo reported on this recently and but I can’t find the report.
  3. Advertising – In app advertising is very successful currently. It had 50% click-through at one time but so did the Internet when it first happened. Look to this number to decline but if you can jump on it now; do!
  4. Subscription – WSJ is currently charging for access to their application and I could not find anything on how much money they’re making. If they aren’t they may need to give a base portion way and then charge for specific area; a la carte.
  5. Partnerships – This is the same concept listed above. Bundle your product with others to offer something compelling.


  1. Situational – This will soon be possible and would have you receiving the right ad based on your past purchasing behavior in the right context (time of day & location). Google and/or Apple is going to do this.
  2. Mobile search – This type of ad is based on your location and what you searched on. If you search for sushi and your near Colorado Blvd and Exposition the search should return Osaka Sushi. (AND if it does you better scamper over their and try the Zombie Brains. Excellent!)
  3. Contextual – Online, (touchweb also) you will see ads related to the site you’re on.
  4. Behavioral – Based on where you have been online recently (including touchweb) you receive relevant ads.
  5. Social – <see social advertising under social media above>
  6. Destination – Make the ad so compelling that they come to see it. Think BMW films. (Not necessarily viral and hopefully social.)
  7. Intent based – Twitter & Facebook are key to this with their lifestreaming. People talk about what they are going to do and as a business you can offer them something before they do it; coupon, upgrade, etc.

Whoa. This is a long post. My eyes are bleeding.

The way this particular class roled out there is much overlap and if you made it this far into the post; congratulations. We didn’t even cover the customer service and building brand depth, but we have been talking about that for most of the quarter. The main point is that there a lot of ways to make money utilizing social media and the online landscape. Based on your business model plan on 1) testing them all and then 2) monitoring how successful they are and 3) tweaking to increase conversions.

Below is my “incredibly visionary” presentation created with Prezi. Next class we’re reviewing the artist as yet to be known as Web 3.0!