"Share of voice" revenue model: the solution for social networks?

This tweet from Patrice Lamothe, this post from Scobleizer and the discussion around Exec Tweet got me thinking. What if, instead of pushing commercial companies’ ads, social networks helped commercial users to increase their share of voice on their platform? Could this “share of voice” revenue model be the way forward to monetize social networks’ audiences?

What do I mean by “share of voice”? Social networks in the broad sense of the term are, in a way or another, tools to promote oneself. Users write on Facebook or Twitter so that other people hear about them. They want these people to hear about them because, directly or indirectly, they want to promote themselves. In other words, it is personal PR in a given media. This is the very basic social rule of these social products. On the other hand, commercial companies also enter into traditional PR activities to increase their share of voice to get a message across.

With this context in mind, the “share of voice” revenue model is about providing functionalities and services that help your users increase their share of voice on your social network.

Let’s take Twitter as an example. Commercial companies can have an account for free on Twitter. They are users like any others. They have followers, they sometimes follow people and they send tweets.  Twitter could sell services or functionalities to help these companies get more followers and hence increase the share of voice of their tweets. These services or functionalities can take numerous forms, e.g., “sponsored suggested users to follow” (as is already the case now when opening an account but I think it’s free). The pricing could be either a flat fee for the service (as in freemium models) or a cost per follower type (as in advertising).  

On the other hand of the service, a Twitter user has the choice to follow or not the commercial user tweets: he decides whether he sees these tweets or no. In this sense, it is very different from advertising since the latter is “forced” onto the user. The format of the company’s “voice” is still the tweet hence it is naturally integrated in the platform. Of course, as always, the social property needs to strike the right balance to make sure that these "promoted voices" do not overwhelm the product. It should also notify what is promoted or not.

This approach of “share of voice” can be applied to all sorts of social products since the basic premise of most social products is personal PR in a way or another.

In an old post, I said “media channels successful with advertising have a common characteristic: an excellent fit between content format, advertising format and user’s purpose/values”. Just replace, in the previous sentence, the word “advertising” by “monetization tool” and you’ll see that the “share of voice” revenue model fulfills all these conditions. This means that it should be more productive than ads on social networks and hence command higher revenue per user. This also means that the traditional strategic trade-off between user growth and revenue generation is less stringent because the revenue model fits with the user experience. However, it probably still means that you need a big audience for this model to generate significant revenues.

Some will argue that at the end of the day, it is just another form of advertising model. Not really: instead of asking “how can I put advertising on my product?”, the question for the entrepreneur becomes “how can I help some of my users gain share of voice?”. It’s a very different framing… And, as we all know, the framing of a problem changes radically the specific solutions that come out.

The “share of voice” revenue model has a lot of potential for social networks.Time will tell.

What are your thoughts ?

Comments

[Wallen's]

There was a comment on Hacker news saying: "I think it's hard to earn money this way without losing trust and compromising the product for your real users - just like paid placement in pre-Google web search."

I think that as long as you show clearly what is sponsored or not, you do not lose the trust of your users, especially since they decide whether they "follow" the account or not. Of course you need to make sure that these "sponsored voices" do not overwhelm your product: it should stay an adequate proportion. Also, it needs not to be the one paid most that gets more promoted but a mix of price and endorsement/quality - basically similar caveats put in place with sponsored links on Google.

[Amaury de Buchet]

Conversation continued from Nicolas Cynober's post on Pearltrees business model.
"how can I help some of my users gain share of voice?" ... I thinks that sums it up quite nicely and I agree.
Another reference is Alex Iskold's post http://www.readwriteweb.com/archives/web_30_when_web_sites_become_web_services.php
And my own modest view of the evolution of CRM :
http://www.flickr.com/photos/7523746@N07/3281196001/in/set-72157612793017328/
Brands are not talking down to customers anymore, and must do more that talking back : they should provide them services (in addition to their regular products) to help them make a better use of their products and feel better. That in some cases includes bragging around how they are happy (or not) with the brand. People want to communicate, brands should (but how many will feel confident to) help them do it.
So I agree to the approach, but this is a giant step ... when most brands are not even engaged in a 2-way communication with their customers. This is difficult because it requires them to 'let go' and release control to their users. As a former consumer goods marketer, I know how controlled the messages and the brand is, and should be. Companies are all about control and long term and planning, and I am not sure the web2.0 (or 3.0) and even the financial crisis (with the realization the quarterly pressure from analysts was a disaster) will change this ... Just look at how many are willing to put ads in uncontroled environments like Facebook or YouTube (except for the sponsored groups or channels) ...

[Wallen's]

Amaury, you make very good points here. One can seperate 2 stages in the "share of voice" model. The first one is still a 1-way communication, e.g., a company with a Twitter account that just "downloads" messages. The second stage is what you describe a 2-way communication. To be honest I don't see the second stage happening very soon. It's not in the DNA of most companies... yet. However, it does not necessarly hinder the development of this revenue mdoel.