Guy Kawasaki on his blog today wrote about Neil Patel of Pronet Advertising who put together a beginner’s guide on how to use Digg to drive traffic to your web site. If you are not familiar with Digg, it’s a site where users can submit links to stories they find on the net they think are worthwhile. The Digg community can then vote on the story and “Digg” it or “Bury” it depending on what they think of it. Stories that receive the largest number of votes get promoted to the front page or “most popular” page. This can have a dramatic impact on the amount of traffic going to your site in a relatively short period of time, if the community likes your page. For more details on how Digg works, click here.
Mark Stevens, best-selling author of “Your Marketing Sucks” (one of my favorite books) wrote a post on his blog about how your public relations efforts can turn out to be a huge disappointment when not aligned with your sales goals. After all the anticipation, all you get is 15 minutes of fame and nothing to show for it. Your photo showing up in the paper may seem great at first, but if the coverage doesn’t drive action, it’s nothing more than just your photo showing up in the paper. Today, businesses and PR firms staying on top of today’s technology (and in-tune with today’s reading habits) are leveraging news SEO, channel sites, and bloggers to push out their message to intended viewers. According to Pew Research Center, the audience for online news has jumped from 2% to 31% of Americans and the audience for nightly network news slipped from 42% to 28%. 75% of journalists search the internet for previous stories on their subject.
One of the things I’m doing this week is preparing for a presentation at Web Builder 2.0 on how to monetize mashups in Las Vegas next week. Consequently, I’ve been pulling together notes, talking to mashup creators, and studying real-world examples of how companies are applying innovative ways of generating revenue with Web 2.0 applications and open APIs. Though there are all sorts of interesting emerging stories, such as the new Second Life millionaire, product developers are increasingly trying to explore the options beyond the obvious: namely big value acquisitions ala YouTube or the often fickle, if mostly workable, online advertising route. But the biggest question that comes up is that if you let your users generate most of your content and then expose it all up via an API, how can a profitable business be made from this?
This has been the question from the outset, and though you can build enormously successful sites in terms of numbers of users and amounts of content using Web 2.0 techniques, the best means of monetizing this remain a larger unproven endeavor. I wrote a while back on the struggle to monetize Web 2.0 where I explored in detail the strategic and tactical methods for making next generation Web sites financially viable, even successful.
If you refer to my original article on monetizing Web 2.0, I identified three tactical means for generating revenue (advertising, subscriptions, and commissions) and a series of strategies that can support them. While it’s usually fairly clear how the direct revenue models work, it’s usually less clear to people how the indirect strategies can directly influence the opportunities.
Strategies for Making the Most from Web 2.0
- There are direct (the 3 items above) and numerous indirect ways to monetize Web 2.0 that often go unappreciated
- Some of the indirect ways which lead to revenue growth, user growth, and increased resistance to competition — which in turn lead to increased subscriptions, advertising, and commission revenue — are:
- Strategic Acquisition: Identifying and acquiring Web 2.0 companies on the exponential growth curve before the rest of the market realizes what it’s worth (early exploitation of someone else’s network effects.)
- Maintaining control of hard to recreate data sources. This is basically turning walled gardens into fenced gardens: Let users access everything, but not let them keep it, such as Google providing access to their search index only over the Web.
- Building Attention Trust – By being patently fair with customer data and leveraging user’s loyalty, you can get them to share more information about themselves that in turns leads to much better products and services tailored to them.
- Turning Applications into Platforms: One single use of an application is simply a waste of software. Turn applications into platforms and get 5, 50, or 5,000 additional uses (Amazon has over 50,000 users of its line of business APIs) for example. Online platforms are actually very easy to monetize but having compelling content or services first is a prerequisite.
- Fully Automated Online Customer Self-Service: Let users get what they want, when they want it, without help. Seems easy but almost all companies have people in the loop to manage the edge-cases. Unfortunately, edge cases represent the The Long Tail of customer service. This is hard but in the end provides goods and services with much tighter feedback loops. And it’s also a mandatory prerequisite for cost effectively serving mass micromarkets. In other words, you can’t directly monetize The Long Tail without this.
Lying directly in the primary tenets of Web 2.0 however, are a series of two-edged issues from a revenue perspective. Though the concepts and ideas are powerful when applied appropriately, they can also pose significant short-term and long-term challenges. Below are the basic principles of Web 2.0 along with the positive and negative revenue implications for most companies on the Web today, even ones that aren’t fully embracing it yet.
Revenue Implications for Web 2.0 Principles (not meant to be exhaustive)
- Principle 1: Web as Platform
- Upside: Revenue scalability (1 billion users on the Web), rapid growth potential and reach through exploitation of network effects
- Downside: Competition is only a URL away, often requiring significant investment in differentiation
- Principle 2: Software Above a Single Device
- Upside: More opportunities to deliver products and services to users in more situations
- Downside: Upfront costs, more infrastructure, more development/testing/support (costs) to deliver products across multiple devices
- Principle 3: Data is the Next “Intel Inside”
- Upside: Customer loyalty and even lock-in
- Downside: Lack of competitive pressure leading to complacency, long-term potential antitrust issues
- Principle 4: Lightweight Programming & Business Models
- Principle 5: Rich User Experiences
- Upside: More productive and satisfied users, competitive advantage
- Downside: Higher cost of development, potentially lower new user discoverability and adoption
- Principle 6: Harnessing Collective Intelligence
- Upside: Much lower costs of production, higher rate of innovation, dramatically larger overall content output
- Downside Implications: Lower level of control, governance issues (increased dependance on user base), content management issues, and legal exposure over IP\n
- Principle 7: Leverage the Long Tail\n
- Upside Implications: Cost-effectively reach thousands of small, previously unprofitable market segments resulting in overall customer growth
- \nDownside Implications: Upfront investment costs can be very significant, managing costs of customer service long-term
I hope that helps. I\’m barely on track for 4pm, but let\’s talk anyway and review the latest…\n
\n\n”,0] ); D([“ce”]); //–>: Much lower costs of production, higher rate of innovation, dramatically larger overall content output
- Upside: Cost-effectively reach thousands of small, previously unprofitable market segments resulting in overall customer growth
- Downside: Upfront investment costs can be very significant, managing costs of customer service long-term
While a great many startups are not generating revenue in huge quantities yet, the companies that have been diligently exploiting open APIs such as Amazon and Salesforce are in fact generating significant revenue and second order effects from opening up their platforms and being careful not to lose control. This is actually a large discussion, and as large Web 2.0 sites continue to emerge, we’ll continue to keep track of what the successful patterns and practices are.
What other implications are there by putting users in control of content generation and opening everything up?
Digital Rights Management (generally abbreviated to DRM) is an umbrella term that refers to any of several technologies used by publishers or copyright owners to control access to and usage of digital data or hardware, and to restrictions associated with a specific instance of a digital work or device. The term is often confused with copy protection and technical protection measures. These two terms refer to technologies that control or restrict the use and access of digital content on electronic devices with such technologies installed, acting as components of a DRM design.
Digital Rights Management is a controversial topic. Advocates argue DRM is necessary for copyright holders to prevent unauthorized duplication of their work to ensure continued revenue streams. Some critics of the technology, including the Free Software Foundation, suggest that the use of the word “Rights” is misleading, should be avoided, and replaced by the (in their opinion) more accurate term Digital Restrictions Management. They claim that copyright holders, and industry organizations, are using DRM to curtail existing user rights regarding copyrighted material (via statue or common law) and claiming control not granted by law. Others, such as the Electronic Frontier Foundation consider several DRM schemes to be anti-competitive, and violations of anti-trust laws in one or more jurisdictions, citing the iTunes Store as an example.
Enterprise Digital Rights Management (E-DRM or ERM) refers to the use of DRM technology to control access to corporate documents (Microsoft Word, PDF, TIFF, AutoCAD files, etc), rather than consumer playable media. The technology usually requires a Policy Server to authenticate users’ rights to access certain files. EDRM vendors include Microsoft, Adobe Systems, Liquid Machines, EMC Corporation/Authentica and several smaller companies. There are open source implementations as well. EDRM is generally intended to apply to trade secrets, which are much different from copyrighted material (though there is sometimes an overlap as some material is both copyrighted and a trade secret — eg, the source code for some proprietary software), and for whom the primary issue is industrial or corporate espionage or inadvertent release. In most jurisdictions, there is no notion of fair use for trade secrets as there is for copyrighted material. Trade secrecy confidentiality measures are less controversial than DRM applied to copyrighted works sold to the public in many copies (eg, audio or video recordings, texts, …).
1.1 Content Scrambling System
2 Legal enforcement of DRM
2.1 Digital Millennium Copyright Act
3 Other copyright implications
4 DRM advocates
5 DRM opponents
6 DRM and Internet music
7 DRM and Libraries
8 Controversies, consequences, and examples
9 Copyright law vs. particular techniques
10 European dialogues on DRM concerns
11 Inclusion within GNU General Public License version 3
12 See also
12.1 Related concepts
12.2 Devices that use DRM
12.3 Lobbying organizations
14 Further reading
15 External links
YAHOO and MSN Search have announced that they will support the popular format for XML-Sitemaps which was invented by Google in 2005. In an encouraging act of collaboration, Google, Yahoo and Microsoft announced tonight that they will all begin using the same Sitemaps protocol to index sites around the web. Now based at Sitemaps.org, the system instructs web masters on how to install an XML file on their servers that all three engines can use to track updates to pages. This should make it easier to get your pages indexed in a simple and standardized way. People who use Google Sitemaps don’t need to change anything, those maps will now be indexed by Yahoo and Microsoft.’ve updated the xml-namespace definitions in the new beta version of my XML-Sitemap Generator for WordPress Plugin to the new sitemaps.org standard.
Yahoo has already updated their Site Explorer so you can submit your sitemap to YAHOO and Google. The guys from MSN are a bit slower and will do some internal tests on their own websites before they open the submission for everyone.
What follows below are some of my favorite WordPress plugins and why. Many of them I have in common with Cavemonkey’s excellent Top Ten WordPress Plugins list. Here’s my list, in no particular order:
- PodPress – makes it super-simple to post podcasts; includes an inline media player
- Popularity Contest – offer a leaderboard of your Most Popular posts based on views and ratings
- Google Sitemaps Generator – creates a Google Sitemaps XML file. What’s killer about this is that it uses Popularity Contest’s ratings for the priority scoring that Google uses to determine how frequently to spider your pages
- Akismet – you’d be a fool to run a blog with comments turned on and not use this plugin to stop the flood of comment spam. ’nuff said!
- Adhesive – gives you the ability to flag certain posts as “Sticky” so they float to the top of the category page regardless of whether it’s the most recent
- Ultimate Tag Warrior – creates tag pages and a tag cloud. Great for SEO as I’ve said before.
- EmailShroud – an email address obfuscator to thwart those evil email harvesters. Scans for email addresses in posts, but won’t work on email addresses hard-coded into your theme.
- Transpose Email – another email address obfuscator. Doesn’t automatically scan for email addresses, but can be used from within your theme files.
- WP-EMail – “Email this post to a friend” functionality
- WP-Print – Printer-friendly version of posts
- Subscribe2 – let your readers subscribe to your blog updates via email
- In-Series – link posts together into a series, regardless of dates posted or categories selected
- Permalink Redirect – fixes the canonicalization problem where the same page loads whether the slash is there or not. Important for SEO.
- Gravatars – puts the commenter’s “Gravatar” image next to their comment
- Subscribe to Comments – a commenter can check a box on the comment form so that they get notified of further comments to that post
- WP-Notable – places a row of buttons alongside your posts so the reader can easily add your post to their favorite social bookmarks service (del.icio.us, digg, etc.)
- A Different Monthly Archive – a pretty way to display links to archives by month
- Related Posts – link to related posts automatically based on the content of the post
- Related Posts for your 404 – your File Not Found error page can now suggest related posts to the misguided user. Cool!
What are your favorites? Did I miss any important ones?