Menéame.net, one of the most popular websites in Spain is a social content tool promoted by its own users, very much like Digg or Reddit in the US. Users register in the site to submit stories they read elsewhere and judge as interesting, and those stories are promoted to the front page if they achieve enough popularity according to the number of votes they receive from the users’ community.
Most people use the page as a sort of early warning site for news, to keep track of events, etc., either accessing the page on the web or through their feed readers or limit their activity mostly to browsing. Avid users devote part of their time to submit news, vote them or comment on them, thus becoming well known in the site by their nicknames.
However, the truly surprising part about Menéame.net was its user statistics. Since its development in December 2005, a month that finished with half a million page views, it had been growing aggressively until it reached more than twenty million page views in June. The popularity level of Menéame.net had taken every single Internet user by surprise, particularly those who had a personal or corporate page. To be “meneado” any specific day meant to have huge increases in your traffic, in percentages that, for instance, a personal blog, could mean to multiply your page views tenfold. In the Spanish blogosphere there were lots of reports of the so called “Menéame effect”, and the authors of the page were among the first surprised.
Martin Varsavsky, the US educated Argentine who is a serial entrepreneur in the Hispanic world, has heavily invested in the project. Spanish Internet startups were at their nascent stage during the investment. Despite its huge initial growth, the revenue generation is below expectations at the moment. The big question is whether it feasible to turn Menéame.net into an economically sounding project? Under what assumptions?
A business development manager for these websites should keep in mind some typical social effects of such community driven sites:
- Social content sites like Menéame.net become popular very quickly as it offers a means for otherwise unknown people to make themselves heard. It offers a way to find out to what extent an individual’s activity is liked or rejected by the Internet community.
- The inherent nature of Internet businesses is to make money by clicks. The more people visit them, the higher is the site’s reachability to the masses. As the Internet community becomes more dependent on these sites, they can generate revenue by online advertising. The advertising, from the view point of the investing company, will be successful only if the advertised product reaches to a targeted mass. For example, the advertisement for a soap can be placed right beside an interesting story about soaps.
- A significant population will never come to terms with what others consider as ‘likable’ stories or information. The popularity is heavily dependent on regional content. Although, online advertising penetration is more traceable than any other media, it keeps away some specific advertisers who deliver niche products. For example, a drug for treating a specific type of skin disease may not be successful in using community content sites as an advertising medium. The popularity of a related article will never reach a threshold level to make it to the frontpage of these sites.
- If efforts are put on creating a database of intentions of the customer, where one can track the pages visited by the customer before and after visiting the page in question, it would culminate in a knowledge asset that can have valuable implications for online marketing. In fact, there are two ways of arriving at a page. One is purposefully looking for it and the other is just by curious accident. This depends on the attitude of the individual as well. For example, one would never like to go to such a social content site which provides two or three links to relevant and current affairs news sources and the rest is personal junk, like, “Photos of my new dog”, “How mom killed the cockroach under her bed”. Just because of the huge mixture of irrelevant information, one would never like to go to these sites and would rather prefer to visit blahblah.com which is the website of a prominent news media. Until and unless someone has a specific interest in visiting the site itself or has ample time to spend on mindlessly searching the Internet, depending on these sources of information can never define relevance, the way one needs it.
Hence, using external services like Google Adsense will be helpful for effective advertising. These will not only use cost-per-click or cost-per-transaction business models for the investing companies, but also require lesser investment, which removes to a great extent, the entry barriers to online advertising.
Shounak's Daydreams 