How do we go about understanding social media company motivations? When was the last time you wrote a check or gave your credit card info to Facebook, Twitter, Instagram, LinkedIn, Google or Pinterest? Wait, you never have? So all of these companies are just doing everything for free? Obviously, they’re all in business to make money, and in the case of Facebook and Google, they’re making boatloads of it every day. To best optimize the social media marketing strategy for your business, it’s important to understand how these companies make money and why they’re willing to give so much away for free, to you and everyone else.
1) – in the list of social media platforms we’ve mentioned so far, only one (LinkedIn) has a premium membership. If you want more in-depth information about certain people, you need to pay for it. The other companies simply make their money from serving you ads. So, how are these platforms sure that you’re going to see – and more importantly – act on those ads? Far and away, their most important objective is to capture – and retain – your attention. Think about it this way – if you were the only one on Facebook, would it be worth anything? It only begins to gain value as many, many people use it to share their lives. Facebook as a website, or Facebook as an app on a phone or tablet is a captive platform. In other words, everything you see in their ecosystem – so to speak – is exactly what they want you to see. The Newsfeed portion of your Facebook site uses complex algorithms to gauge the importance of your friends’ posts. Instead of simply being a repository for a whole bunch of status updates, photos, and ice bucket challenge videos, Facebook has become a purveyor of content. As a result, Facebook wants to show you things that are important, entertaining, or engaging to you. Everyone will have a unique Facebook experience as a result of this complex software. As an advertiser, if you’d like to promote a post to 25-30 year old, college-educated women in Chicago who have recently gotten engaged, Facebook is the place to do it because Facebook has gotten that data directly from the person herself.
Question – what company owns YouTube? Here’s the answer, if you’d like it straight from the horse’s mouth.
Is it free for YouTube to host your videos on their servers? So how does Google make money from YouTube? Once you click on a link to start a video, Google can – at its discretion – show you an ad before or during the video. No longer does Google need you to click on those ads above or to the right of your search results. The more videos you watch from YouTube/Google, the more the advertisers pay into their coffers. Facebook, Google, and all of these other platforms have now ushered us into…
2) – the Aggregator Age. If the Information Age replaced the Industrial Age, aggregators have become the most valuable resource individuals and businesses have available online. In the last post, we mentioned that YouTube’s own published statistics say over 100 hours of video are uploaded to Youtube every minute. Information is growing at an almost incomprehensible rate, and no single individual, company, or government entity could hope to keep up. If you’re able to help your targeted audience sift through all the noise and find that which is most important to them, they’ll continue to come to you as a trusted source for the information they want. You can implement the same strategy as the social media companies all while using their platforms as your free soapbox. This then brings us to…
3) – real-life implementation. Your current and future customers will look to you to be the lighthouse in the ever-growing ocean of information online. How can you become the one trusted source and the recognized expert in your industry? Future posts in this series will show you exactly how to do it.
The next post will cover how there is a huge gap between something being free and spending one penny online. What have free apps, free-to-try apps, and open source software packages done to commercial endeavors online? What questions do you have on how best to get your customers to open their wallets?