This past Wednesday in Calgary saw Derek Ball, CEO of Tynt, speak on the future of social networking.
As the CEO of the social networking start-up, Derek offered some unique insights into how social networking developed, where he sees it going, and what it all means for marketing.
Derek’s personal interest in social networking stems from a curiosity about new tech trends that drive meaningful change in our lives. As the father of three, he knows firsthand just how meaningful social networks have become to the under 18 crowd.
Evolution of Social Networking
According to Derek there are many exciting developments to come in the social networking space. The Tynt CEO predicts “3D worlds integrated in existing social networks is likely inevitable.”
Moving forward, social networks will be less tied to a computer. Greater technological capacity and location awareness built into cell phones will likely change how we think about social networking.
“Look for more fluidity and richness in social networking. People want to use social networking everywhere they go, to replicate what happens in real life.”
Evolution of Monetization
As social networks continue to evolve, one question remains the same: how can they make money?
Currently most social networks are built on an advertising revenue model. But advertising alone isn’t enough to make them profitable.
This why Derek favours a “freemium” model – give the basic service away for free and charge for those who want the premium package. Coupling the “freemium” approach with advertising is a more sustainable model.
Virtual goods are another potential source of revenue for social networks. Derek used the example of Facebook, who sold nonexistent gifts to the tune of $35 million last year. Derek related these virtual goods to a more traditional hobby of his, “I buy bedding plants for the front of my house – it makes my place look nice when people visit. In the same way we decorate the front of our houses, others decorate their social networking pages.”
Evolution of Marketing
Derek’s underlying message was that social networking has dramatically changed how marketers must think and act.
The key to marketing within social networks is to keep in mind that people aren’t there to be sold –
“They like to learn about things, about what products their friends are using.”
By using social networks to influence communities their customers are a part of, marketers will be far more successful than if they just try to pitch their products. Reaching the right group of influencers is vital for marketing on social networks – although it’s no easy task. As Derek noted, “kids have amazing bullshit detectors.”