Monetizing Online Groups: A Good Example

Over the past 3 months, our team has interviewed over 120 social networks and online communities across the globe. The number 1 challenge they’re all facing is monetization. Banner ads don’t work – CPM rates have plummeted – in some cases from €20 to €2, members aren’t paying any attention to ads and there’s not enough inventory to service the combined billions of page views across these sites. Sites doing well generate revenue through selling virtual currencies, member subscriptions and integrating partnerships.

Whilst we estimate there exists over 2,000 social networks and online communities, there are over 80 million groups created by members, organizations and companies.

So how do you monetize groups?

Similar to social networks, some platform allow groups to embed advertising – such as Ning. The most common form of monetization is through affiliate links and direct partnerships.

I group I belong to on LinkedIN is the 30,000+ member Social Media Marketing group lead by Michael Crosson. Michael is a LinkedIN member passionate about social media and engaging members in a variety of discussions around this topic. It’s the largest group on LinkedIn for this topic and serves a ‘go to’ place to connect with people interesting in social media marketing and learning more about this.

Michael has been smart and started integrating affiliate partners into his group. With a reach of 30,000+ people, he’s able to blast a message to all of his members guaranteeing a high percentage of attention and ‘eye balls’. This type of marketing is very different to adsense or embedded affiliate opportunities. Firstly – most if not all of the offers may not be something the members are proactively searching for now – therefor receiving a message from a trusted person addresses people are not searching. Secondly, whilst the group has 30,000+ registered members, they don’t necessarily visit the group on a regular basis – meaning that any ads or offers presented won’t be seen. The most effective form of distributing any message or offer is through email – from somebody the group members trust and will pay attention to.

Below, you will see the message I received this morning from Michael – which I spent 30 seconds reviewing:

Six key ingredients to effectively presenting opportunities to members in your group:

  1. Source opportunities or offers which are highly relevant to your members. State why the opportunity is interesting.
  2. The message must not be scripted or written in a commercial way. Write like you’re sitting around a table with your members and sharing something exciting you came across that would be relevant to them.
  3. Be transparent. If you’re receiving a commission or kickback – make this obvious
  4. Your message should not only be commercial in nature. Deliver some value at the beginning of the message – sharing some news, an article or something interesting. Append commercial opportunities or partners at the end of your message.
  5. Plan the frequency of how often you will communicate with your members. Depending on the affinity you have developed with your members, if you send too many messages you will start to loose their interest. A very close knit group
  6. Track how many people click on the links. For larger groups (1,000+) ideally you want 10% of members clicking on the links. For smaller groups 20% is healthy and indicative that you’re delivering value.

What not to do:

  1. Make it obvious that it’s an affiliate link – Michael has included the link in it’s entirety including his affiliate code. I would suggest that you shortern or disguise the URL. Whilst it’s important to disclose that the links are commercial in nature you can avoid posting lengthy URL’s

There are 100’s of affiliate programs you can access. Many groups have embedded the Amazon affiliate program, LinkShare, commission junction, tradedoubler, adjug, adroll and so on.

It’s worth testing and even speaking to members within your group to find the right balance.

1 comment
  1. Anju said:

    Great read Maria,

    Thanks for putting up the example.

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