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This article first appeared as "$ocial Media: The next big revenue generator?" in the 3/20/09 issue of Association TRENDS.
By LINDY DREYER and MADDIE GRANT, CAE
We know social media can generate buzz, but can it generate revenue? It’s an important strategic question for associations that hasn’t been getting much attention even as all eyes turn toward the promise of the social web.
Just like there is money to be made in any key engagement strategy – from face-to-face events and education to publications and magazines – so too is there money to be made from an online engagement strategy that is built around social technologies. Here are just a few examples.
• Increasing value. By using social media to drive traffic to your web site, subscriptions to your listserver and pass-along for your e- newsletters, you’re adding value that can translate into more interest and higher revenue from digital ad and sponsorship inventory.
• Adding inventory. Social technologies also create new inventory that associations can offer to potential sponsors and advertisers. As an example, the Risk Insurance Management Society has moved their listservers to a more robust technology that enables them to serve ads on every message that is generated by the community. This new revenue stream is worth six figures.
• Recruitment and retention. Any social media strategy that creates community and engages members under the umbrella of the association is going to impact a potential member’s decision to join and a current member’s decision to renew. As examples, both American Speech- Language-Hearing Association and Delta Sigma Phi fraternity have set up members-only LinkedIn groups. In both cases, the groups have been the impetus for renewals and re-engagement with lapsed members.
• WOM marketing value. When members talk to members, the messages stick. Using social technologies as part of an integrated marketing campaign for conferences, seminars, books and other products can increase the effectiveness of every dollar you spend on direct mail, e-mail and your web site. Think of the Amazon model – reviews and detailed descriptions of the products from the Amazon community actually compel other members of the community to make decisions to buy.
• Content subscriptions. As you build your organization’s online presence, you will likely find that the content you produce and the content your community generates have value to nonmembers. Some organizations are finding success with offering a web site subscription option, separate from a regular membership. The idea is to make premium content – like certain research reports or podcasts for example – available on a paid basis to people who might not otherwise become members.
The social web is here to stay and the opportunities for associations are huge. Ultimately, your social media strategy needs to be driven by your mission and your objectives. There are many opportunities to generate revenue, but only in the context of a mature, strategic and integrated approach to creating online engagement.
Dreyer is chief social media marketer and Grant is chief social media strategist for SocialFish, Washington, a social media firm for associations and nonprofits. Grant also is a TRENDS 2007 Young & Aspiring Association Professional.