UNIVERSITY OF WARSAW

UNIVERSITY OF WARSAW Faculty of Journalism and Political Science Department of Journalism Monetization Strategies for Social Media
Bachelor’s Thesis
Yevstakhiy Biletskyy
Album: 311816
*
Supervisor
Prof. Dr hab. inż. Włodzimierz Gogołek
Warsaw, June 2013
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2 ABSTRACT
Growing popularity of Social Media tend to reflect commercial potential of online
communities. This study focuses on the specific monetization strategies of two case channels
– Text and Video Blogs. The objective of the author is to present different commercialization
approaches for entrepreneur and non-entrepreneur actors, elaborating coherent business
framework for global and local market of Poland within selected Web 2.0. platforms.
Considering innovative character of the thesis most of the empirical studies were conducted
abroad (Germany, United States). Trying to assemble international trends with Polish market
approach, at the end of each case chapter author presents opinions of polish experts. Thus,
this study will not only analyze the most profitable monetization models, but also investigate
applicability of strategies for the local market.
Key Words: Social Media, Web 2.0. Monetization Models, Blogosphere, You Tube
Title in Polish: Strategie Komercjalizacji Mediów Społecznościowych: Blogi Tekstowe i
Wideo.
3 Table of contents
Abstract…………………………………………………………………………………...........3
List of Contents…………………………………………………………………………...........4
1. Introduction…………………………………………………………………………...........6
1.2. Research Problem…………………………………………………………………............7
1.3. Motivation of Research……………………………………………………………............7
1.4. Methodology………………………………………………………………………............8
1.5. Structure of the Tesis……………………………………………………………...............8
2. Theoretical Perspective on Social Media and its Monetization…………………............9
2.1.Introduction………………………………………………………………………………...9
2.2. Concept of Web 2.0……………………………………………………………………….9
2.3. Defining Social Media…………………………………………………………………...10
2.4. Social Media – Issues and Challenges…………………………………………………...13
2.5. Social Media Economy……………………………………………………………..........14
The List of Definition……………………………………………………………………...…16
3. Monetization of Text Blogs…………………………………………………………...….17
3.1. Introduction………………………………………………………………………………17
3.2. Defining a Weblog…………………………………………………………………….....17
3.3. Defining the Blogosphere………………………………………………………………..17
3.4. Who are the bloggers?........................................................................................................18
3.5. Trends in Blogosphere…………………………………………………………………...19
3.5.1. Blogosphere as a new channel of mass communication……………………….……....19
3.5.2. Blogosphere as a commercial platform………………………………….……………..20
3.5.3. Blogosphere as an academic research platform………………….…………………….21
3.6. Strategies for blogosphere………………………………………….…………………….21
3.6.1. Traffic Strategies…………………………………………………………….………....21
3.6.2. Monetization Strategies………………………………………………………………..23
3.6.2.1. Indirect methods……………………………………………………………………..24
3.6.2.2. Direct methods…………………………………………………………………….....26
4 3.7. Assessing effectiveness of the monetization process………………….…………………30
3.8. Expert opinion……………………………………………………………………………30
3.9. Conclusion……………………………………………………………………………….31
The List of Definitions………………………………………………………………….…….32
4. Monetization of Video Blogs. The case of You Tube.......................................................33
4.1. Introduction………………………………………………………………………………33
4.2. Defining the User Generated Content…………………………………………………....33
4.2.1. Monetization Model for UGC……………………………………………………….....34
4.3. Monetization strategies of the UGC within You Tube…………………………………..36
4.3.1 You Tube. The Profile of platform……………………………………………………..36
4.3.2. Optimization…………………………………………………………………...………37
4.3.3. Monetization……………………………………………………………………...……39
4.3.3.1. Strategies for non-entrepreneur actors……………………………………………….40
4.3.3.2 Strategies for entrepreneur actors…………………………………………………….42
4.4. Expert Opinion………………………………………………………………….………..44
4.5. Conclusion……………………………………………………………………………….45
The List of Definitions……………………………………………………………………….47
5. Conclusion…………………………………………………………………………...........48
5.1. Assessing revenue……………………………………………………………………….48
5.2. Applicability of models to the local market………………………………………….….49
References…………………………………………………………………………………....50
List of Figures……………………………………………………………………………...…53
List of Tables…………………………………………………………………………………53
5 1. Introduction
Over the past few years the online market has changed out of all recognition. Proliferation of
the new web services combined with technological improvements and growing popularity of
the Internet gave a rise to a new phenomenon – Social Media (SM). After the era of static and
relative primitive User Interface within Web 1.0., websites adjust their appearance and
services to the expectations of users within ever changing global web. Whereas in the first
decades of the history of the Internet, users were just consumers of the online-based content,
in the Social Media their roles have significantly changed. From consumption of the content
to co-creating of the data.
The Social Media create a new model of mass communication which is based on the structure
many-to-many. Through this kind of sites people can easily build relationships more
efficiently, interact and communicate with other users, create and distribute their content
within Global Web. Thus, this trend could be considered as a establishment of a new online
community with billions of users worldwide1.
This potential arouses interest of marketers, who recognize commercial perspective in the
Social Media. In the era of global crisis of traditional advertisement Web 2.0. platforms offer
a new dynamic and innovative approach to the B2C and B2B communication. Social Media
sites offer a wide technological field, which can be adjust to each commercial campaign
seperately, being optimized depending on the preferences of the client. In Social Networks
marketers can combine traditional advertisement instruments such as Direct Banners Ads or
Product Placement with indirect commercial programs e.g. Affiliate Campaigns or Bloggers
engagement. On the other hand social element of the Social Networking contributes in
building positive marketing environment around the brand. Social Media give an unusual
opportunity not just to promote a business, but also to tell the story of the company, showing
a human face of the commerce.
The Social Media promote also democratization of the online environment. Social Networks
are the best example of the equalization of internet users, where the marketer have the same
1
Catherine M. Ridings, David Gefen, Virtual Community Attraction: Why People hang out online, „Journal of
Computer-Mediated Communication”(2006).
6 rights as an average user. Thus, Social Media should be also a great commercial opportunity
for non-entrepreneur actors in terms of monetization of their content within SM platform.
Social Media Start Up doesn’t require a high outlay, which means that commercialization of
the Social Media Content can be performed by every user.
1.2. Reserach Problem
In this paper we will investigate the complex of monetization models for Social Media,
examining different commercialization approaches for entrepreneur and non-entrepreneur
actors. This study is focused on business models for Blogosphere. In terms of this paper we
comprehend Bogosphere as a comprehensive conception of Text Blogging and Video
Blogging. Thus, it is conducted on two case platforms – Independent Blogs and Video Blogs
within You Tube.
The aim of this research is to analyze monetization process of Social Media channels,
elaborating comprehend business models within the Social Media Network for business
representatives and
average users. First group uses Social Networks as an additional
marketing instrument. Second group monetizes User Generated Content, trying to earn money
on Social Networking. This paper formulates a new business framework for selective Web
2.0. platforms, trying to describe the most effective methods of the Participatory Economy.
The study objectives can be summarized in three ones. First, we will give a wide theoretical
description of the channel. Second, explain optimization and monetization methods for two
types of actors. Third, we will compare effectiveness of models in terms of revenues.
After detailed description of specific monetization models for Text and Video Blogs,
considering empirical examples of commercial campaigns within Blogosphere and conducted
interviews with leading Polish bloggers and representatives of Social Media Agencies we will
explain, why Text blogging in comparation to Video Blogging has better market position in
terms of monetization.
1.3. Motivation of research
Among hundreds of social media channels, there has been only a few of them which are
commonly used in commercial discourse. Leading position of Facebook and Twitter
supersedes other Social Media Platforms. In this paper we will try to focus on the third most
7 important social media platform – Blogosphere, trying to emphasize commercial potential of
this channel, describing new solutions for entrepreneur and non-entrepreneur actors. After the
research on the literature of subject, it is important to point out relative lack of academic
articles on this topic in Poland. Positions such as „Jest Blog” by Andrzej Tucholski, „Bloger”
by Tomasz Tomczyk „Kominek” or Hatalska’s Report on Blogosphere in 2012 were written
by professional active bloggers, presenting empirical guideline for freshmen in this business
or statistical research on the local market. However, in this literature authors do not discuss
the topic from the academic perspective. This paper is attempt to investigate this topic from
scientific approach and could be an inspiration to start a research on this specific topic on the
academic level in Poland.
1.4. Methodology
This study is based on the pragmatic approach. The author uses mix of literature review and
empirical studies (face-to-face interviews, expert opinions), examining topic from multiple
perspectives in order to interpret the results.
1.5. Structure of the Thesis
This paper consists of 5 chapters. In the first chapter we wil introduce research problem,
focusing on the main objectives of this study. Second part investigates the study subject from
theoretical perspective, conceptualising Web 2.0., including definitions of the Social Media
and monetization in terms of the Participatory Economy. Third and fourth part will tell us
about case studies on Text Blogs and Video Blogs. In the conclusion we will try to examine
applicability of business models and their commercial effectivenes. Each part is completed by
graphics, tables and list of definitions.
8 2. Theoretical Perspective on Social Media and Monetization
2.1. Introduction
Trying to understand commercial potential of the Social Media and specific strategies of
monetization, it is important to define this phenomenon and introduce different scientific
concepts of Web 2.0. In this chapter we will try to present theoretical paradigms, elaborating
definitions of Web 2.0. and Social Media. We will also try to understand specific model of
mass communication promoted by the Social Media sites. Finally, we will investigate how
SM are used by business actors in terms of commercial dialogue with potential clients.
2.2. Concept of Web 2.0.
The term Web 2.0. first used by Tim O’Reilly2 was elaborated to describe transformative
process within global Web. Observing ever changing online market it is important to point
out, that even though discussed in this chapter term is pretty popular, there is no
comprehensive legal definition. Some of the scholars define it as as a process of Web
transformation, others – as a part of of the Internet History3.
For the purposes of our paper we will adopt first definition elaborated by Tim O’Reill:
„Web 2.0 is the network as platform, spanning all connected devices; Web 2.0 applications
are those that make the most of the intrinsic advantages of that platform: delivering software
as a continually-updated service that gets better the more people use it, consuming and
remixing data from multiple sources, including individual users, while providing their own
data and services in a form that allows remixing by others, creating network effects through
an "architecture of participation," and going beyond the page metaphor of Web 1.0 to deliver
rich user experiences”4. Paraphrasing the author Web 2.0. can be described as technological
improvements within global Web. „The term "2.0" comes from the software industry, where
new versions of software programs are labeled with an incremental version number. Like
2
Tim O’Reilly – founder of O’reilly Media and supporter of open source movements. In 2004 during O’Reilly
Media Conference he described new technological improvements within Internet as a Web 2.0., so-called new
version of World Wide Web.
3
Jim Petrassi, Web 2.0. – Potential Impact on Business, p. 1, „CSC Global Business Solutions” (2008).
4
Tim O’Reilly, Web 2.0. Compact Definition, O’Reilly Radar (2005), http://radar.oreilly.com/2005/10/web-20compact-definition.html [28.04.2013].
9 software, the new generation of the Web includes new features and functionality that was not
available in the past”5.
Web 2.0 provides also a new model of user interaction within Internet. Web platforms
become much more dynamic comparing to Web 1.0. sites. It promotes development of
internet-based relationships between users and thereby establishing online communities.
2.3. Defining Social Media
The term social media consists of two parts. „Social” refers to the instinctual need of human –
the need of connection with other members of the group. „Media” is here a tool, which makes
this connection possible, easy and interactive. The difficulty in finding right and sufficiently
complete scientific definition of SM is based on transparency and broad semantic field of this
phenomenon. Trying to define Social Media we will use definitions provided by social
scientists. Based on their unilateral definitions we will evaluate our own term of this
phenomenon6.
Figure 1. Tag Cloud presenting main characteristics of Web 2.0
Source: http://en.wikipedia.org/wiki/File:Web_2.0_Map.svg [28.04.2013].
5
Web 2.0., Techterms.com, http://www.techterms.com/definition/web20 [28.03.2013].
Lon Safko, David K. Brake, The Social Media Bible: Tactics, Tools, and Strategies for Business Success, p. 3
(2009).
6
10 Social Media as a Communication Technology
According to Safko’s definition, SM can be considered as a set of tools and technologies,
allowing people to connect with each other, building relationships more efficiently7.
Social Media as a Communication Model
In accordace with a definition provided by Lehtimäki, SM are considered as an online
environment. With the combination of community, Web 2.0. tools and User Generated
Content it shapes a new way of mass communication model8.
Social Media as a Content
In Brian Solis’s terminology scientist focuses on the importance of User Generated Content,
defining SM as a „Democratization of information, transforming people from content readers
into publishers. It is the shift from a broadcast mechanism one-to-many to a many-to-many
model, rooted in conversations between authors, people, and peers”9.
Social Media as a Service Provider
Katri Lietsala’s definition describes Social Media as a service provider, supplying online
platform, where users can communicate, interact and share their content for free10.
Social Media as a business
Phenomenon of Social Media can be also understood as a developing part of the online
business. As reported by „Social Media Marketing Industry Report” more and more marketers
consider SM as a new tool of interactive marketing, which helps to build indirect commercial
dialogue with clients. „88% of respondents use Social Media networks and 81% of them
reported gaining business exposure as a result”11.
7
Op.cit. Lon Safko, p.10.
Lehtimäki’s definition is quoted in Master Thesis of Xiaoyan Hu, Social Media Business Model Analysis - Case
Tencent, Facebook, and Myspace, p.9, Aalto University School of Economics (2011).
9
Brian Solis, Defining Social Media: 2006-2010 (2010), http://www.briansolis.com/2010/01/defining-socialmedia-the-saga-continues/ [28.03.2013].
10
Katrin Lietsala&Esa Sirkkunen, Social Media. Introduction to the tools and processes of particiatory economy,
University
of
Tampere
(2008),
http://tampub.uta.fi/bitstream/handle/10024/65560/978-951-44-73203.pdf?sequence=1 [28.04.2013].
11
Zake Camusion, Social Media Networks as a Marketing Tool (2009), http://www.startupnation.com/businessarticles/9457/1/social-media-network-marketing.htm [28.03.2013]. 8
11 Definition of Social Meda
Taking in consideration all of the scientific perspectives mentioned above, for the purposes of
this paper we will try to elaborate our own definition of Social Media.
The Social Media is an online network phenomenon. Web 2.0. platform, which shapes a new
communication model, allowing people to communicate online (both: real-time and non- real
time), build relationships more efficiently, create and share their content within Web 2.0.
Social Media are also an effective marketing instrument, which is used by businesses in terms
of establishing indirect commercial dialogue with their clients within social networks.
Table 1. Categories of Social Media
Category
Focus
Examples
BLOGS & PODCASTS
Informing of current
Traditional
novelties
podcasts, videocasts
Content sharing
Facebook, Myspace,
SOCIAL NETWORKS
blogs,
vlogs,
LinkedIn
COMMUNITIES
Content sharing, discussion You Tube, Picasa, Wikipedia
of mutual interest
VIRTUAL WORLDS
Substitute for the real world
Second
Life,
World
of
Warcraft
Source: Xiaoyan Hu, „Social Media Business Model Analysis – Case Tencent, Facebook and
Myspace”, Aalto University School of Economics (2011).
12 2.4. Social Media – Issues and Challenges
Popularity of the Social Media, the level of daily traffic and growing amount of users arouses
issues especially in terms of identity, privacy and legality crimes12.
Identity Issues
One of the main problems connected with the Social Media is an identity theft. Due to the
relative freedom in creating accounts within Social Networks Internet users can steal
someone’s identity, „Carring out objectionable acts in that name without others knowing
about the true identity of the perpetrator”13. However, as Petteri Kangas points out „The more
time people spends in the virtual world and the more different the virtual identities are from
real life, the greater the risk of damage to one’s own mind”14.
Privacy Issues
Problem arouses also privacy issues. One of the most important commercial product of Social
Networks is a personal information of its users. „Since people would like to find friends,
dates, or build any relationship with others on those sites, they willingly reveal their personal
information to others who are assumed as potential friends”15. This kind of data Social Media
websites analyze and process in terms of personal targeting, which is used by commercial
institutions in their marketing campaigns. However, this information can be used in improper
way by third parties, infringing personal rights of social networkers. Giving an example,
Social Media considered as a perfect environment for government investigation and market
research. As pointed out by Susan B. Barnes „Internet software can be used as parasocietal
mechanisms for the observation of online interactions. Online social networks allow for high
levels of surveillance. Users may think that their Facebook or MySpace journal entries are
private but they are actually public diaries.”16.
12
Op.cit. Zake Camusion, p.11.
Ibidem.
14
Kangas, P., Toivonen, S. & Bäck, A., Ads by Google and Other Social Media Business Models, „VTT
Tiedotteita- Research Notes 2384” (2007).
15
Ibidem.
16
Susan B. Barnes, A Privacy Paradox: Social Networking in United States, „Peer Reviewed Journal on The
Internet” (2006), http://firstmonday.org/ojs/index.php/fm/article/view/1394/1312 [29.03.2013].
13
13 Legality Issues
There are also several problems with copyright and trademark issues connected with the
usage of the Social Media within Web 2.0. platform. First, Social Media are commonly based
on the User Generated Content and there are some legal limitations connected with sharing
this kind of content in the Web. Second, culpability issue. For example, Internet users may
plan to perform a crime on the Facebook. Considering huge loopholes in terms of the Internet
law, it is hard to decide which party is liable for this act - service provider or user.
Mobile Social Networking Trend
One of the most important current challenges for Social Media websites and e-marketing is a
growing popularity of smartphones, As pointed out by J.P. Morgan ”Facebook will have
approximately 1.14 billion monthly active mobile users by 2014, of which 486 million will
only access the network from their mobile device”17. Thus it shows us, that Social Media
companies need a new strategy framework for expanding their business within mobile
network. This involves adapting of the webiste’s interface to standards of mobile devices.
One of the most popular current trend is to create mobile apps, which allows users to have a
real-time access to Social Networks from their smartphones (e.g. Twitter app, Facebook app
etc.). However, there are also mobile-based social communities such as Instagram or
Foursquare. The biggest advantage of them is a mobile functionality. According to statistics,
in 2012 more than 46% of users accessed social media from mobile devices18. This trend
continues to grow.
2.5. Social Media Economy
Considering the main issue of this paper, it is important to discuss business respective of
Social Media. Even though Social Networking boom is a relative new trend of last years, in
academic literature we can find a lot of scientific sources, which investigate commercial
potential of the Web 2.0.
The term, which defines “Commodities that are produced, distributed, shared and consumed
in social media” is the Participatory Economy19. Other scientists describe it as a Sharing
17
BizReport, Social Media Access via Mobile on the rise, http://www.bizreport.com/2013/01/social-mediaaccess-via-mobile-on-the-rise.html [19.05.2013].
18
Ibidem.
19
E. Melakoski, „Himottaa, Mutta Pelottaa“, Suomalaisen Sisältötuotantoala näkemyksiä (2007).
14 Economy, Peer-To-Peer Economy, Wikinomics or Networked Economy20. In other words it
refers to business models and strategies used by marketers to earn money on the Social
Media. As highlighted in Hintikka’s report, „Participation economy is related to the new
concepts that evolve in the fields of innovation, production, development, distribution,
exchange, competition and consumption of material and immaterial commodities avaliable
within Social Media”21. Figure 2. presents basic commercial models for online business (incl.
SM).
Figure 2. Business models for online services
Business Models Advertising Informediary Merchandising AfBiliate Programs Community Subscription Utility Source: Michael Rappa, Business Models on the Web,
http://digitalenterprise.org/models/models.html [29.04.2013] 22. Graph.: Own Development.
20
Op.cit. Lehtimäki, p.11.
Op.cit. Brian Solis, p.11.
22
Advertising
Traditional Advertisement within online Media.
Informediary
Data Mining Strategy, which is based on the personal targeting.
Merchandising
E-commerce programs within Social Media.
Affiliate Programs
Cost Per Action type.
Community
Refers to the potential of crowdsourcing. The power of the online open-source community relies on the
voluntary work performed by internet enthusiasts (f.e. on going process of updating Linux Operational
Program).
Subscription
Each usage of the online-based content is charged.
Utility
Fees are based on actual usage of service, so-called Pay-As-You-Go.
21
15 The list of definitions
Web 1.0. – an early period of conceptual evolution of World Wide Web. Internet Users act as
consumers of the Internet-based data, not contributing to the content of website.
Web 2.0. – technological improvements within global Web after 2001, allowing Internet
Users co-creat content of websites. The term was defined by Tim O’Reilly.
Social Media (SM) - an online network phenomenon. Web 2.0. platform, which shapes a new
communication model, allowing people to communicate online (both: real-time and non- real
time), build relationships more efficiently, create and share their content within Web 2.0.
Social Media is also an effective marketing instrument, which is used by businesses in terms
of establishing indirect commercial dialogue with their clients within social networks.
Participatory Economy – economic paradigms, models and strategies used by marketers to
earn money on the Social Media.
16 3. Monetization of Text Blogs
3.1. Introduction
By the end of 2011 there were more than 181 million blogs online23. The amount of them is
rapidly increasing. Growing potential of the blogosphere as a new platform of the mass
communication has also an important impact on the online business24. Whereas in the past
blogs were considered as an only free time activity mainly for hobbyists - nowadays more and
more marketers notice potential of the blogosphere as a new channel of commercial
communication with clients. What is a weblog? How succesfully gain traffic and monetize it?
In this chapter we will try to answer these questions. Focusing on development of the
blogosphere, we will discover the blogger’s profile, topics they discuss and strategies they use
to earn money. This chapter presents entire path of the monetization strategy for entrepreneur
and non-entrepreneur actors, providing comprehensive examples of methods and analysis of
the incomes.
3.2. Defining a Weblog
A weblog (world wide web + log, diary) can be defined as a periodically updated site,
presented in reverse chronological order with hyperlinks to other internet sources25. By the
usage of medium blogs are distinguished into a Textblog, Photoblog, Videoblog, Audioblog,
Microblog (e.g. Twitter, Tumblr) or Link Collection (without original content). By the content
blogs can be classified into a personal journal, news blog, watchblog (e.g. opinion blog),
warblog (e.g. citizen journalist), eventblog and hobbyblog26.
3.3. Defining a Blogosphere
Since 1999 the number of blogs has grown at an astronomical rate. Whereas in 1999 global
blogosphere had only 15 blogs, within one year this number increased to the one thousand27.
Three years later in 2003 – from 2,4 mln to 2,9 mln blogs28. By the end of 2011 more than
23
Number of Blogs Up From 35 Million in 2006 to 181 Million By The End of 2011,
http://www.dazeinfo.com/2012/03/10/number-of-blogs-up-from-35-million-in-2006-to-181-million-by-the-endof-2011, [08.03.2013].
24
State of the Blogosphere 2011, Technorati, http://technorati.com/social-media/article/state-of-the-blogosphere2011-introduction/ [08.03.2013].
25
Daniel W. Drezner, Henry Farrell, The Power and Politics of Blogs, American Political Science Association,
University of Chicago, George Washington University, July 2004, p.5.
26
Anja Ebersbasch, Markus Glaser, Richard Heigl (red.), Social Web, Teil 2. Völlig überarbeitete Auflag,
Konstanz 2008, p. 65.
27
Rebecca Mead, Digital Culture: You’ve got a blog, „The New Yorker”, November 2000, p. 102.
28
Phil Wolff, Blogcount, http://dijest.com/bc/2003_06_23_bc.html#105638688729256217 [08.03.2013].
17 181 million blogs online29. And this amount continues increasingly growing. The main reason
why blogosphere proliferates so fast is the low barrier to entry.
Whereas in the 90. the most common issue was finding appropriate and user-friendly
software, nowadays any individuals with the access to the Internet can create its own blog
(e.g. on the Wordpress or Blogger.com) less than in ten minutes. The average age of hobbyist
bloggers not suprisingly is usually lower than general age ranks of the internet user (20+)30.
Trying to define the term blogosphere, Daniel W. Drazner notes – „Blogosphere is a network
phenomena that rely on hyperlinks and include lengthy commentaries. All blogs by definition
link to other sources of information, including - most pertiently - other blogs. The universe of
blogs is conventionally referred as a blogosphere”31.
Significant here is an important role of links in the blogosphere. Due to the nature of the
hypertext - the most reliable way to get a traffic (i.e. popularity, readership) is to cooperate
with other bloggers, adding links to their pages and creating ipso facto the coherent and
interconnected network of blogs32.
3.4. Who are the bloggers?
3.4.1. Methodology and Classification
For the purpose of our paper, following sociological methodology proposed by Technorati’s
survey 2011, we will provide distinction of blogs into following categories: 33
Hobbyist
More than 60% respondents of the survey34. Hobbyist bloggers consider blogging as a free
time activity and do not report any income. On their blogs they usually express their personal
musings, spending less than 3 hours blogging daily. The main goal of writing a blog for this
specific group is a personal satisfaction, hobby.
29
Op.cit. Dazeinfo.com, p.17.
Op.cit. State of the Blogosphere, p.17.
31
Op.cit. Daniel W. Drezner, p.17.
32
Rebecca Blood, The Weblog Handbook, Cambridge 2002, p.98.
33
Ibidem. State of the Blogosphere.
34
Ibidem.
30
18 Professional Part- and Full- Timers
Represented by 18% of total group35. Independent professionals, mostly freelancers. They use
blogging as a part time job (supplementation of incomes), rarely as a full-time job. Most of
them do not consider blogging as the primary source of income. The most common topics
discussed on their blogs are personal musings and technology.
Corporate
These bloggers represent 8% of respondents36. Blogging for them is one of the duties of their
full-time job (f.e. social media manager, PR manager, journalist) or they are hired as a full
time bloggers. They primarily write about technology or business. Sometimes the blog is also
used as a platform of corporate communication within a big international companies. This
kind of blogs help to strength identification of employees with their company. It’s values and
philosophy.
Entrepreneurs
Entrepreneur bloggers make up 13% of the blogosphere. They usually blogging for company
organization they own. 84% of them discussed topics related to the industry they work in.
46% of which writing about business and 40% about thechnology. The main goal of their
blogging is sharing an expertise (76%), gaining professional recognition (70%) and attracting
new clients for their business37.
3.5. Trends in Blogosphere
3.5.1. Blogosphere as a new channel of mass communication
As reported by Technorati, more and more people use blogosphere as a major channel of mass
communication. The japanese earthquake and tsunami (2011) generated the greatest amount
of pageviews in the blogosphere since past years. Over 38% of respondents get news about
the catastrophe in Japan from the blogs 38 . Some sources describe
blogging as a new
journalism. First, bloggers are more spontaneous than traditional media and have more
freedom to express their personal opinion. Moreover response time of the blogosphere is
much faster than it occurs in traditional media. Through the viral effect the information
35
Op.cit. State of the Blogosphere, p.17.
Ibidem.
37
Ibidem.
38
Ibidem.
36
19 spreading very fast within different Social Media channels, reaching millions of users
worldwide within 10-15 minutes39.
3.5.2. Blogosphere as a commercial platform
With the development of the Internet big changes in media industry are being observed. Since
2009 budget of commercial campaigns in the Internet has increased, exceeding advertisement
costs for traditional media40. This trend continues to grow. There are several aspects which
explain this tendency. As reported by the blog for online marketing Flint Studio, online
campaigns are much more affordable (low costs=big effect) 41. Furthermore, the interest of
advertisement industry causes also demographic targeting, brand engagement and relatively
easy brand building opportunities avaliable online. With a support of advertisers in the near
future blogosphere could be the most effective commercial platform42. As noticed one of the
marketer during Technorati’s survey: „We see blogger outreach as the opportunity to leverage
influencers and connect with a new audience. We recognize that there are conversations
happening in the blogosphere that are applicable to the brands we represent and we believe it's
valuable for our brands to join the discussion”43.
Trying to understand business potential of the blogosphere, marketers pointed out several
aspects. First, blogs encouraging and enabling sharing of promoted content across social
media platforms. Most of the bloggers have a patent of trust among peers. Being promoted on
the blog it’s also opening up for a new target group. In this case the main goal of colaboration
is creation an online-based discussion around the promoted brand.
„We have worked with several brands where it made sense given the target, such as certain
types of women (either health-conscious women for a January promotion, or moms dealing
with changes for the back-to-school routine) – to reach out to them in places where they were
already seeking this type of information. We found they were visiting blogs to get advice and
39
The Speed of Social Media, http://www.whitefireseo.com/infographics/infographic-the-speed-of-social-media/
[19.05.2013].
40
IAB Reports Full-Year Internet Ad Revenues for 2010 Increase 15% to $26 Billion, a New Record,
http://www.iab.net/about_the_iab/recent_press_releases/press_release_archive/press_release/pr-041311
[08.03.2013].
41
Flintstudio, In the boxing ring: Traditional media VS Online Media, http://www.flintstudio.com/blog/in-theboxing-ring-traditional-media-vs-online-media/#.UXFE1WBqD17 [08.03.2013].
42
Business Week Online, What Tumblr Can Tell Us About the Future of Media,
http://www.businessweek.com/articles/2012-10-29/what-tumblr-can-tell-us-about-the-future-of-media
[08.03.2013].
43
Op.cit. State of the Blogosphere, p.17.
20 tips from peers and experts, so we wanted our products to be included in those
conversations.” – explains one of the surveyed marketer44.
Blogosphere is one of the three most common social media channels used as a marketing tool
after the Facebook and Twitter45.
3.5.3. Blogosphere as an academic research platform
It is important to point out significant role of the blogosphere for the academic research
studies. More and more academics use potential of blogs to discuss their work and get an
outside feedback. Not only senior professors, but also students use blogosphere as a informal
outlet for their ideas. Giving an example, Warwick University in the UK has elaborated the
largest academic blogging edu-project in the world46.
3.6. Strategies for blogosphere
3.6.1. Traffic Strategies
In terms of the topic of our paper, the most important aspect, which should be taken under
consideration is a readership, target audience focused on the blog and statistics of the page. It
is relatively easy to find businesses wishing to advertise their products/services on the blog
with a good ranking. We can suggest, that the main product in commercial transaction
between Blogger and Advertiser is a frequent reader of the blog - target audience.
Among hundreds of strategies on gaining a traffic to the blog, we can note following methods:
Targeted Content and Social sharing potential
It is important to have in mind, that the new generation of readers have ability to spread the
word, using social patent, sharing interesting content on their social media channels. The most
common shared content includes photos, video, infographics or short texts. The key issue is to
get to know target audience – what readers like in the blog? What kind of content have the
best ranking? What kind of data they share the most? Thus, having this basic information, it is
advised to customize content to the profile of the reader. Since the content satisfies audience,
44
Op.cit. State of the Blogosphere, p.17.
Ibidem.
46
Warwickblogs, http://blogs.warwick.ac.uk, [08.03.2013]. 45
21 blogger will observe a growth of social sharing, which en passant can expand a readership and
thus gain a traffic47.
Comment marketing
The key goal of this aspect is to be close to readers, showing them presence of the blog
everywhere, where the blog’s topic is discussed.
It is important to stress that a new
generation of the Internet users frequently read several amount of blogs and participate in a
discussion on the Social Media channels, forum groups or special online communities.
Commenting and active participation in a discussion with an active back-linking to the blog
will make the page not only visible for potential readers, but also creates the vision of the
blogger as as an expert in specific field48.
Graphics with link-back licensing
One of the most important element of the blog are images. It is important to stress, by
uploading and hosting pictures blogger reaches another traffic source for blog via Google
Image Search. It is higly recommended to note in description of the image that by reusing
link-back is required49.
SEO
Search Engine Optimization has become the most popular and easiest way of gaining traffic
through the Google Search. It is based on the offsite (e.g. tags, content, pictures, links) and the
onsite (e.g. web design, hyperlinks, meta description) optimization mechanisms, which make
blog/website more Google-friendly, enabling Google crawlers correctly indexing the
content50. Among hundreds of SEO methods, in terms of our paper it is important to point out
that Google is incredibly blog-friendly search mashine and back-links on other blogs are
strongly advised. Thus, two-sided cooperation with other bloggers through linking each other
is a good way to gain a perfect position in SERP (Search Engine Result Page) and this way –
gaining a traffic51.
47
21 Tactics to Increase Blog Traffic, Seomoz.com, http://www.seomoz.org/blog/21-tactics-to-increase-blogtraffic-2012 [08.03.2013]. 48
Ibidem.
49
Ibidem.
50
Description of the Google algorithm can be reached on the googleguide.com [19.05.2013].
51
Guest Blogging Strategies, Seomoz.com, http://www.seomoz.org/blog/guest-blogging-strategies-whiteboardfriday [08.03.2013].
22 3.6.2. Monetization Strategies
Writing a blog it’s something more then just updating an online journal. Blogging it’s a
creation of relations with online readers and community management. By writing an useful
and high quality content regularly, blogger establish a close relation with his audience,
gaining their trust and becoming a personal brand. After achieving this level the traffic
generated by the blog can be monetized succesfully52.
There are several successfully implemented strategies, which can bring money to the blog.
For the purpose of our paper we divide strategies into two groups: direct and indirect
methods, which can be used by two types of actors – marketers and independent bloggers.
Figure 3. The most popular commercial programs for bloggers
Product Reviews Focus Group Brand Ambassador Programs Sponsored Posts Traditional PR Source: State of the Blogosphere 2011, Graph.: Own Development.
http://technorati.com/social-media/article/state-of-the-blogosphere-2011-introduction/
[08.03.2013].
52
How to monetize Your Blog Traffic – The 7 Best Ways, Smartbloggerz.com
http://www.smartbloggerz.com/2011/05/best-ways-on-how-to-monetize-your-blog-traffic/ [08.03.2013].
2011,
23 Figure 4. Brands using blogosphere for commercial purposes
Source: State of the Blogosphere 2011,
http://technorati.com/social-media/article/state-of-the-blogosphere-2011-introduction/
[08.03.2013].
3.6.2.1. Indirect methods
Indirect Blog Monetisation based on the model of earning money because of the blog, not
through it. This method is being used by bloggers who have already achieved a good traffic
and have established a stable relation with the targeted group of readers. However, for this
method the key element, which is being considered by commercial partners is a blogger’s
authority, personality and credibility. Statistics are not that important. „Blogs with smaller
audience sometimes are even better siuted to the subject of the specific commercial campaign.
First, the life of a single post on the top blog is short. Usually up to two days. Therefore the
resulting number of its page views may be much lower, than the simmilar publication on the
less popular blog” – explains Norbert Kilen from „Think Kong Intermedia Agency”
(Poland)53.
53
Milward Brown 2012, Natalia Hatalska (red.), Blogosfera 2012: Badanie Opinii Marketerów na temat
wizerunków blogerów, reklamy na blogach i przyszłości działań reklamowych w blogosferze, Warszawa 2012.
24 As a building of million-page-views-monthly traffic is a longterm strategy, indirect methods
are considered as a good way to earn first money from blogging. As Neil Matthews, CEO of
„Your Wordpress Help Blog” points out, 95% of his incomes are from indirect methods54.
Consulting
When blogger acts as a specialist in the topic, there are always a lot of companies willing him
to pay for advices or participating in their events. As pointed out by the blog specialist Darren
Rowse, there are bloggers who charge themselves out even at 600 $ per hour to give an advice
to a large company55. There are also some VOIP service companies, which hire bloggers as
online consultants on demand. This system has per minute rate. Good example to this strategy
is a blog of Chris Garrett. First he has created an influential blog on the blogging and new
media niche. Afterwards he started to provide commercial consulting service in this field56.
Employment through a blog
More and more companies note growing potential of the blogosphere. Thus, there are some
businesses, which hired bloggers to create and manage its company blog as a full-time or parttime social media manager. Good example here is the company blog of Vespa managed by
professional well-experienced bloggers57. Furthermore, there are dozen of examples when
bloggers were hired as specialists-columnists in print or online media (e.g. „Manolo’s Shoe
blogger” was hired by a „Washington Post Express”) 58. Otherwise, there are some blogger
professional websites, such as Bloggerjobs, where this type of job can be found59.
Merchandising
Some bloggers open up their own e-commerce stores with products or services they provide.
Two key aspects, which militate in favour of this method are: good traffic (blogger has
already popularity and doesn’t spend a budget on the advertisement) and the trust patent of
readers. The sale product could be e-books, seminars, courses, consulting service or second
hand clothes60.
54
Indirect Blog Monetisation, Wpdude.com, http://wpdude.com/indirect-blog-monetisation [08.03.2011].
Making Money Because Of Your Blog – Indirect Methods, Problogger.net,
http://www.problogger.net/archives/2006/02/22/making-money-because-of-your-blog-indirect-methods/
[08.03.2013].
56
The blog of Chris Garett, Chrisg.com [08.03.203].
57
Vespa Company Blog, Lavespavita.com, [08.03.2013].
58
Manolo’s Shoe Blog, [08.03.2013].
59
Bloggersjob.biz [08.03.2013].
60
E-commerce store of Maffashion fahion blogger Staffbymaff.pl [08.03.2013].
55
25 Data Mining
Companies interested in direct contact with potential client via e-mail offer incredibly high
rates for the contact database of targeted reader group. The key aspect, which arouses
business interest is a natural targeting. It is obvious that readers of fashion blogs are interested
in fashion. That is why their email addresses are incredibly valuable for fashion companies,
wishing to send them customized ads. This strategy is pretty popular in the blogosphere and is
succesfully implemented by dozen of bloggers. Giving an example, Yaro Starak generates
five figures in revenue each month from his email newsletter base61.
3.6.2.2. Direct methods
Using Direct methods of commercialization, blogger earns money directly from the blog
through advertisement campaigns or affiliate collaboration. In case of direct methods, the key
aspect, which should be taken under consideration is a quantity of the traffic
(pageviews/monthly and the amount of Unique Users). Direct methods are taken from online
media marketing strategy, thus direct online campaign on the blog is almost similar with
online campaigns in traditional online media (e.g. news websites, portals etc.).
Traditional Advertising
Blog with a good traffic and qualitative content is a potential platform for advertisers. There
are several methods how to monetize the online space in traditional way:
-
Direct Banner Advertising – the easiest method to monetize the page is to sell space of
the blog for advertisement purposes. The most common formats of online ads are the
leaderboard (728x90), the skycraper (120x600), the button (125x125) or rectangle
(300x250). Blog supposed to have a high and stable traffic. The key issue of this
method is negotiating a rate with advertisers62.
-
Contextual Ads. (Google AdSense) – programms scan the content of the blog, placing
conceptually relevant ads to the content. Payment based on the Cost Per Click form.
For each click on the banner blogger receives fixed amount of money.
61
Alexander M. Orlando, Direct and Indirect Methods to monetize your online presence,
http://www.alexandermorlando.com/?p=362 [08.03.2013]. 62
Ibidem.
26 -
Link Marketing – As we already mentioned in our paper, Google is incredibly blogfriendly search maschine. Links to the website in blogosphere brings a good position
of webpage in SERP. That is why, some of the bloggers used to practise selling links
on their blogs to the commercial partners. Nevertheless it is important to point out,
since Google announced that sites selling text links without no-follow tags would be
banned, this method is getting less popular.
RSS feed ads
With growing popularity of reading blogs via RSS, advertisers find the way of monetization,
placing ads into the RSS feeds. In this method the main goal is not a high traffic, but the
number of blog’s subscribers. Here the most popular programmes are Feedburner or
AdSense63.
Paid Subscription/Paid Content
The strategy of charging readers for the usage of content is a good and fast way to monetize
the blog. Otherwise this method is really difficult to implement. Firstly, readers are used to
derive online content for free. There is a huge danger with this kind of strategy. Since readers
realize they have to pay for using the blog, they will start looking for other free sources. It
naturally reduces blog’s traffic. Before implementation this strategy, blogger should consider
the value of the content. Readers will pay only for high quality premium data (usually
business analysis or statistics). For blogs specialized in entertainment this strategy rather
wouldn’t be successful. Nevertheless, there is a good way to implement this strategy, mixing
premium and free content. According to this model, blog should provide different kind of
information. Basic content is offered for free and exclusive materials are charged. Giving an
example - SEOmoz, online website specializing in the new media and SEO related topics.
Basic content is provided for free. Visitors who are interested in the premium research have to
pay 99 $ monthly for the access64.
Business Acqusition
A lot of bloggers start blogging with the main idea in the back – to create and design a blog,
gather readership, gain traffic and sell the blog to the media company. The largest transaction
in blogosphere took place in 2005 when AOL has acquired Webblogs Inc., platform of blogs
63
Op.cit. Alexander M. Orlando, p.26.
Seomoz.com, [10.03.2013].
64
27 founded by Jason Calacanis and Brian Alvey in 2002. The acqusition price was 25 mln US
$65.
Affiliate Marketing
„Affiliate marketing it’s a selling something you don’t own to people you don’t know and
earning commission each time you do”66. Based on taking commision for referring a reader
who makes an transaction on the website of the partner. This type of advertising is also called
CPA (Cost Per Action) or CPL (Cost Per Lead). Affiliates (in our case – blogger) is sending
potential customers to the merchant, using banners, text links or other types of online
advertisement. The most popular example in this strategy is the Amazon with hundred of
thousands products bloggers can link to. Average blogger can earn up to 900$ for quarter
using this method67. On the other hand for marketers it’s a pretty effective and cheap method
to gain profiled target group.
Sponsorship
This method is usually described as a highly effective one. If the blog has specific columns,
companies can sponsor them individually. Thus, this option gives advertisers possibility to
target specific audience they are interested in. The Argument pro this strategy is that blogger
doesn’t have any commitment in terms of exclusiveness with a sponsor, which means that
blogger can have as many sponsors as he wants.
Product Placement
With well-developed blog, high level of credibility and strong reliable readership focused on
the person of blogger, good way to monetize blogging is a Product Placement, which is an
indirect advertisement of products. There are dozens of tools to implement this strategy. One
of them is location-based social network Foursquare or updating current location of blogger
on the social media channel. By updating status, blogger adds the location and the name of the
visited institution (e.g. bars, clubs, shopping centres). This indirect promotion is pretty
effective, especially when readers have trusting fund towards blogger and follow his advices
65
AOL Acquires Weblogs, Inc.Techcrunch.com, http://techcrunch.com/2005/10/05/aol-acquires-weblog-inc/
[10.03.2013].
66
Missy Ward, Successful Strategies for Monetizing Blogs Ussing Affiliate Marketing, Affiliate Summit Inc.
Presentation, 2012, Presentation can be reached at http://www.slideshare.net/affsum/successful-strategies-formonetizing-blogs-using-affiliate-marketing-14022302#btnPrevious [10.03.2013].
67
Affiliate Programs – Amazon Associates, Problogger.com,
http://www.problogger.net/archives/2005/08/22/affiliate-programs-amazon/ [10.03.2013].
28 in real life. Not to mention also Product Placement in personal articles (e.g.name of the
company) or in photo sessions (e.g. uncovered logos of brands)68.
Sponsored content
This strategy is based on publishing sponsored reviews or sponsored content (articles,
multimedia data) on the blog. It is important to point out that publishing sponsored articles
effects credibility of the blogger. That is why it is strongly recommended to inform readers,
that content they are about to read is sponsored by commercial institution. „The crisis of the
classical commercial persuasion promotes the development of bloggers who act as the brand
ambassadors, reliable users who test products and write their honest opinion” – notes Natalia
Hatalska in her report69.
Downloading option
Offering a downloading option still doesn’t have a popularity in the blogosphere. The key
aspect in terms of this strategy is having a requested product, which can arouse downloading
interest in readers (e.g. music or video data blogger has rights to). The more files for
downloading blogger has, the more sales can potentially generate70.
Table 2. Indirect and Direct methods of Text blog monetization
Indirect Methods
Direct Methods
Consulting
Traditional Ads
Employement through the blog
Business Acquisition
Merchandising
Affiliate Programs
Data Mining
Sponsorship
Product Placement and Sponsored Content
RSS feed ads
Downloading option
Source: Own Development.
68
David Goodman, Now in blogs, Product Placement, New York Times Online, 2010
http://www.nytimes.com/2010/06/13/weekinreview/13goodman.html?_r=3& [10.03.2013].
69
Op.cit. State of the Blogosphere, p.17.
70
Op.cit. Smartbloggerz.com, p.23.
29 3.7. Assessing effectiveness of the monetization process
In context of our paper it is important to point out that majority of bloggers do not consider
blogging as the main source of their incomes71. Due to the expanding popularity of the
blogosphere and its increasingly influenced relations with online business the average number
of blogs per respondent in 2011 has increased since 2010, from two to threee72. Thus we ca
suggest that in the near future blogging could be one of the major professional activity for
people working in the online industry. However it is important to point out that blogging still
considered as a low-paid job. In terms of this, bloggers need to lead more than 2 blogs
simultaneously to achieve an average financial sufficiency. Only 14% of bloggers earn stable
monthly sallary, which in average rate is $ 24, 086 anually per blog, meanwhile when
corporate bloggers $ 33, 577 per year for 1 blog73.
3.8. Expert opinion
„Commercial campaign in the blogosphere is a matter of imagination. Bloggers don’t have
any limitations” - notes Tomasz Tomczyk, the owner of the most popular blog in Poland –
Kominek.in74. Following his opinion, it is important to point out, that the advantage of the
blogosphere is a flexibility of the platform for new custom commercial programs (e.g.
raditional direct banner ads, product placement or product reviews, social media contests or
barter partnership). However, most of the top bloggers try to limit traditional ads on their
blogs. The person of blogger is a brand, which arouses the interest of advertisers. “Nowadays
Internet users looking for something more than just information. They are looking for
emotions, the subiective opinion. This kind of content can not be found in the traditional
media. That is why bloggers becoming more popular and influential”.
“Due to the pression of the advertising market bloggers moving slowly away from their
specific topic toward the lifestyle – writing literally about everything. That is why it becomes
difficult for marketers to specify the targeted audience of readers of the specific blog”. The
important thing is also the model of the commercial communication between the blogger and
reader. “It has been proven that direct advertisement doesn’t work well in the blogosphere”.
Op.cit. State of the Blogosphere, p.17. Ibidem.
73
Ibidem.
74Tomasz Tomczyk – one of the the most famous polish blogger (Kominek.es, Kominek.in), publicist and
journalist. His two blogs – Kominek.es and Kominek.in bring him around 400 thousand PLN income annually. 71
72
30 Thus, experienced bloggers try to eliminate direct banners on their pages. The main objective
of the blogger is not an advertising, but establishing commercial dialogue with a consument
and creating a positive atmosphere around the product.
3.9. Conclusion
Taking into account results of the research, we noticed that blogging indeed is an important
channel of computer-mediated-communication and following mentioned strategies can be
easily monetized. Considering statistics, implementation of this long-term strategy has
finalized 14% of bloggers. Thus, we can claim that blogging is still considered as a hobby
activity. However, it is important to highlight the commercial potential of the platform for
marketers.
As Tomasz Tomczyk noticed, polish market is actively implement social media strategies
within blogging. This confirms also mentioned in the chapter analysis of the polish
blogosphere in Hatalska’s Report75. Analysis shows us, that the most popular commercial
affiliations for Text Blogging are Product Reviews, Sponsored Articles and Banner ads.
In terms of revenues the average annual rate of incomes is $ 24, 086 for managing one single
Text blog76. Trying to increas the revenue, it is strongly advised to manage more than 2 blogs,
which can double or triple this rate.
75
Op.cit. Natalia Hatalska, p.24.
Op.Cit. State of the Blogosphere, p.17.
76
31 The List of Definitions
Blog - periodically updated web page, presented in reverse chronological order with
hyperlinks to other Internet sources.
Blogosphere – the network phenomena that rely on hyperlinks and include lengthy
commentaries. All blogs by definition link to other sources of information, including - most
pertiently - other blogs. The universe o blogs is conventionally referred as a blogosphere.
Computer Mediated Communication (CMC) – the model of communication which occurs
throught the usage of networked computers.
Content Management System (CMS) – program which allows publishing, editing and
modifying content and interface of the webpage. It was designed to simplify the website
development process, making it more flexible.
Hypertext – the text displayed on the electronic device with references to other Internet
sources. It is a key element of the structure of the World Wide Web.
Product Placement - one of the marketing instrument. „Form of audiovisual commercial
communication consisting of the inclusion of or reference to a product, a service or the trade
mark there of so that it is featured within a programme” (Legal Definition in the EU).
RSS (Rich Site Summary, Really Simple Syndication) – one of the web feed format used to
publish frequently updated content (f.e. news headlines, audio, video). It consists of
summarized text and metadata (f.e. the name of the author or the date).
32 4. Monetization of Video Blogs. The case of You Tube
4.1. Introduction
With more than 1 billion unique users monthly You Tube is being considered as the second
most influential website in the Internet and the largest UGC VoD system online77. Videosharing website is a platform of exchanging opinion and developing discussion within Social
Media for billions of internet users around the world. Whereas You Tube networking is still
considered as a free time activity, some of the users achieve unprecedented success, earning
more than 100.000 $ revenue annually for recording and posting self-created videos on the
platform. In this chapter we will discuss monetization strategies of UGC on the You Tube for
entrepreneur and non-entrepreneur actors. First, basing on the scientific research of Hennig
Grosse Ruse-Khan, Nadine Klass, Silke V. Lewinski and Christian Alexander Bauer we will
define and try to understand importance of the User Generated Content in the developing Web
2.0. Then following practical advices of online specialists and vloggers discuss process of
You Tube content commercialization – it’s optimization and monetization models. After the
analysis of commercialization strategies siutable specifically for the You Tube, we will
present opinion of the Polish expert. It will help us to understand the role of the platform in
the commercial digital discourse in the developing market of Poland. We will investigate
specific of the usage, main issues and development perspective of this channel, trying to
comprehend why You Tube vlogging and commercial campaigns there do not arouse the
interest of the local marketers.
4.2. Defining the User Generated Content
User Generated Content plays significant role in the Social Media, having important influence
on the shaping and developing standards of the Web 2.0. Following scientific research of
Christian Alexander Bauer, User Generated Content can be described as a „Set of multimedia
data (incl. text, audio, video, images etc.) generated, modified or shared by the Internet users
online”78. According to the official definition adopted by the „Economic Co-operationa and
Development” there are three main characteristics of the UGC79.
77
Youtube Statistics, http://www.youtube.com/yt/press/statistics.html [21.04.2013].
Hennig Grosse, Nadine Klass, Silke V. Lewinski, Nutzergenerierte Inhalte als Gegenstand des Privatrechts.
Aktuelle Probleme des Web 2.0. p. 3-4. Springer Verlag Berlin-Heidelberg, 2010.
79
Ibidem. 78
33 Publication Requirement
UGC has to be published in the Internet – website or social networking platform.
Creative Effort
It is important that a certain amount of the creative effort of the author is present in the
content.
Creation outside of professional routines and practices
UGC is typically created voluntary, without renumeration.
As pointed out by Wunsch and Vickery in their summary on the UGC „The development of
the UGC is one of the main features of so‐called participative web”80. With UGC websites are
becoming more interactive ans user-friendly. In the past webpages were mostly static, having
a fixed content that didn’t change, unless it was updated by the webmaster. Nowadays more
than 65% of updates is created by users/readers and webmaster plays only the role of page’s
moderator. Some of the websites (e.g. citizen journalism platforms) are based on the UGC on
more than 95%81.
Although it is important to point out - there are a lot of legal limitations connected with UGC.
Some of the files can be protected by the Copyright Law and sharing them without the
premission of the right holder could be illegal.
4.2.1. Monetization Model for UGC
Most of the Social Media channels (e.g. Facebook, Tumblr, You Tube) provide their services
for free, offering Internet users an interactive online platform to create, upload and share
personal content with other people. According to this model, platform generates stabil amount
of site’s visitors, who gradually could be monetized. Thus, it is important to point out, that in
case of You Tube the subject of the monetization is different, than in case of the Text Blogs.
80
Wunsch‐Vincent, S.; Vickery,G, Participative Web: UGC, http://www.oecd.org/dataoecd/57/14/38393115.
pdf. [08.03.2013].
81
Op.cit. State of the Blogosphere, p.17. 34 As Michael J. Toutonghi notes „UGC platforms has two different sources of the revenue. The
targeted User Data and the traditional Ad Store”82.
Describing the structure of this model (Figure. 5), the content arouses interest of users who
have to register on the site to have an access to the UGC. Thus, site has the User Data, which
is a subject of monetization in terms of Data Mining strategy (see p. 25). At the next level the
platform analyze the User Data, cassifiying them into specific target groups (criterium of sex,
location, interest, other preferences). Thus, collected and analyzed data is being a subject of
the behavioral marketing, which uses the potential of targeting to improve the way of
reaching narrowly defined target group (see p. 21).
Figure 5. The structure of the UGC Platform Monetization Model
Source: Own development.
82
Michael J. Toutonghi, Sharing and Monetization of Content, Patent Application No. 11/971,203 (US),
http://www.google.de/patents?hl=en&lr=&vid=USPATAPP11971203&id=FJXGAAAAEBAJ&oi=fnd&dq=ugc
+monetization&printsec=abstract#v=onepage&q=ugc%20monetization&f=false [21.04.2013].
35 On the graphic (Figure. 6) we can compare the amount of the annual profits brought by
monetized UGC in total per site. As we can see in 2010 the UGC located on the You Tube
brought more than 945 million USD revenue, being on the second place on profitability after
the Facebook.
Figure 6. Social Media Sites annual profit from UGC monetization (2010)
Source: Social Times Online,
http://socialtimes.com/user-generated-content-infographic_b68911 [25.04.20113].
4.3. Monetization strategies of the UGC within You Tube
4.3.1 You Tube. The Profile of platform
You Tube is a video-sharing website, which since 2006 belongs to the Google Inc. and
according to the statistics is one of the most popular website in the Internet83. More than 1
billion unique users spend over 4 billion hours watching films on the You Tube
83
The
1000
most-visited
sites on
the
web,
Doubleclick
http://www.google.com/adplanner/static/top1000/index.html [20.03.2013].
ad
planner
by
Google,
36 monthly84. „People can experience varying degrees of engagement with videos, ranging
from casual viewing to sharing videos in order to maintain social relationships”85.
As pointed out by Juan P. Artero, „You Tube phenomenon basically involve three areas:
sociological, technological and legal. Surfers watch videos in search of information and
view and share them for entertainment, shared viewing and social interaction. Yet, even if
web surfers watch videos for more or less the same reasons they watch television, You
Tube has a distinctive social aspect; namely, its social connection to certain networks,
groups or communities. The site has adopted the role of public space, game field and
cultural public sphere. From a technical standpoint, allowing anyone to publish content
suggests that growth will not only exceed that of traditional websites and media, but will
be sustainable as well. In legal terms, the biggest risk to any provider of User Generated
Content is that users might upload content that violates the copyrights of third parties or
content that may be defamatory, obscene or inappropriate for minors. This could be
potentially damaging to the company, but it does not seem to slow the growth of sites of
this type”86.
In this chapter we will focus on the most popular strategies, which are used by You Tube
users and marketers to monetize the content on the platform.
4.3.2. Optimization
The first step of monetization process is detailed optimization of the personal account and
the content. The most important aspect, which should be taken under consideration is a
target audience of the channel. The are two strategic questions vlogger or marketer should
answer before investing into the campaign in You Tube. What is the target group and
what is the strategic goal of the campaign? „The most basic issue for any marketing
professional is to get to know the target group. What is the purpose of your You Tube
videos? What is your goal? Why do you want to market via You Tube? The wrong answer
is - because everyone’s doing it. It’s possible, that there is no strategic reason for you to
use You Tube in commercial way. Perhaps you run a local contracting business and you
84
Statistics of the You Tube (2013) can be reached at the http://www.youtube.com/yt/press/statistics.html
[21.04.2013].
85
Patricia G. Lange, Publicly Private and Privately Public: Social Networking on YouTube, „Journal of
Computer-Mediated Communication” (2007).
86
Juan P. Artero, Modelos de negocios de video en línea: YouTube vs Hulu, p.5 Universidad de Navarra, Spain
(2010).
37 have a very loyal and satisfied customers. On the other hand maybe you do have
something to gain from producing a series of You Tube videos. Perhaps you can create a
video demonstrating some of the options you have avaliable for your customers, using
You Tube as a kind of extended video catalog. Possibly you can also use You Tube as a
after-sale-support by showing customers how to maintain the work you create for them”87.
Having this basic information, it is advised to customize channel’s content to the profile
of the target audience focused around the vlogger.
How the topic of video increases the amount of subscribers?
By choosing the topic of videos vlogger should be always aware of actual situation in the
world, knowing what kind of topics cause discussion in the Social Media? What kind of
information was searched the most recently in Google? Following suggestion of Michael
Buckley, one of the most successful You Tube vlogger: „If the global audience is
interested in the Paris Hilton’s sex tape, you should immediately record the video about
that, commenting the situation. The important thing is to talk about things people are
looking for in the Internet”88.
Inseparable symbiosis of the Google and You Tube provides a good SEO ranking for the
You Tube content in SERP. Since the material satisfies audience, vlogger observes a
growth of social sharing, which en passant, increases the traffic and the ranking of the
channel.
Search Engine Optimization for video data
By uploading and hosting videos, channel reaches Google traffic source via Video Search.
It is higly recommended to follow SEO strategies to make video more Google-friendly.
With a correct and clear metadata (information, which describes the video) content can be
easily found on the You Tube and indexed by the Google Crawlers. As we can see on the
Figure. 7 the topic of two videos is simmilar. However in case of the Example 1
„Shocking Deaths and Fighting” meta-description is not provided. That is why the ranking
of the video is incredibly low (10 page views). In case of the second video „The Masspero
87
Michael Miller, You Tube Online Video Marketing for Any Business, p. 15, Que Publishing, 2011.
Secrets to Youtube Success, Interview with Youtube’s vlogger Michael Buckley, May 2009, Can be reached at
the http://www.youtube.com/watch?feature=player_embedded&v=YZsMgrxGaMA#! [20.03.2013].
88
38 Massacre 9/10/11 What really happened?” vlogger provides full description of the video,
what improves the ranking (21.114 page views).
Important is also originality of the content. Google is an incredibly UGC-friendly
machine. Hosting of original videos can triple popularity of the channel in SERP, whereas
re-hosting of other videos can reduce it89.
Figure 7. Comparison of the ranking of video with meta tags description (Example 2 - the
right video) and without it (Example 1 - the left video)
Source: You Tube Blog,
http://youtube-global.blogspot.ie/2013/02/context-is-king-share-your-story.html
[20.04.2013].
4.3.3. Monetization
Since You Tube has indisputable position of the leader on the web-based video market,
monetization model of the data located on the platform is well elaborated and have a lot of
comprehensieve empirical examples. As reported by Forbes annual revenue of the site
esimates more than 390 million dollars90. It explains why in the opinion of some analysts
89
Drew Hubbard, 10 SEO tips for Youtube, http://www.imediaconnection.com/content/24745.asp [20.03.2013].
Op.cit. Patricia G. Lange, p.35.
90
39 this platform redefines the audio-visual advertising business, storing most of the video
data in the Internet (60% of the video internet traffic globally)91.
However, as Adrian Ulges and Damian Borth point out only 3 out of 21 bln weekly page
views are monetized92. It means, that businesses are still afraid of investing in commercial
campaigns within You Tube. „Marketers aren’t convinced how to measure efficiency of
campaign on the platform. The cost of the commercial spot designed specially for You
Tube is still relatively high. Only large international brands can afford it. Others – prefer
not to risk” – notes Bartosz Sikora, Invention Director of Mindshare Poland. The problem
is also user’s attitude. Figure. 7 Example 1 shows a typical You Tube video, which is
difficult to monetize. The lack of description and meta tags makes this video unattainable
in the search engine. Thus it can not be a subject of commercialization.
There are different methods wich can be used to monetize content stored on the You
Tube. In this chapter we will provide the most effective strategies for UGC monetization,
which were successfully elaborated within platform. For the purpose of the paper we will
distinguish methods used by non-entrepreneur actors (vloggers) and entrepreneur actors
(marketers).
4.3.3.1. Strategies for non-entrepreneur actors
Product Placement
As it is defined in the You Tube Policy, product placement in videos is legal and can be
used by channel owners in their content as a part of their monetization strategy.
Nevertheless, it is important to point out, that this kind of affiliation should be always
notified. Otherwise the video will be deleted. This methode is usually used by
fashion/beauty vloggers in their product reviews. As the most of vloggers have a trust
patent in their generation, this strategy (also known as an indirecting advertsing) can be
pretty effective93.
91
Innovation - Luck or Judgment? Microsoft and YouTube Make the Right Moves, p. 23 „Strategic Direction”
(2007), http://www.deepdyve.com/lp/emerald-publishing/innovation-luck-or-judgement-microsoft-and-youtubemake-the-right-36sQUwL5yb [23.04.2013].
92
Damian Borth and Adrian Ulges, Lookapp for Ads – Content-based Advertising by Visual Concept Detection,
http://www.dfki.unikl.de/~borth/docs/mckinsey_bt_award_abstract.pdf [21.04.2013]. 93
The Orabush Youtube Story: How to build your brand using video, March, 2011. Can be reached at
http://www.youtube.com/watch?feature=player_embedded&v=L5D8CFtdH2Q [20.03.2013].
40 Affiliate Programs
Definition and the model of this strategy was discussed in the previous part of this thesis
(p. 28). In case of You Tube this strategy works simmilar as for Text Blogging. As John
Chow explains, „Affiliate Marketing is one of the most profitable way to earn money on
the You Tube. The real money comes from sales of the ScanSnap 1300 scanner I
recommend in the video (see the Figure 8.). The affiliate link is embedded both in the
description and in the video itself. When user clicks the link and buys the product from
Amazon.com, I get a commission.” In terms of this strategy it is important to note, that
Affiliate Marketing works only for topic related affiliations. That is mean, that if the video
is a product review, the best way to monetize this content via Affiliation Program is to
embrace the link to the Internet sales platform, where customer can purchase discussed in
video product.
Figure 8. Example of Affiliate Marketing on You Tube
Source: http://www.johnchow.com/how-to-make-money-on-youtube/ [23.04.2013].
41 You Tube Partner Program
The most profitable way toward fast and effective monetization for entrepreneur actors is
to join the You Tube Partnership, which is the special monetization program designed for
the most successful and popular You Tube Vloggers94. One of the benefits of this program
is that You Tube places global (most expensive) automatically targeted advertising
formats to the channel of partner. Partners of You Tube can also use development
programs, additional analytical tools, and community resources, which help to improve
quality of the content.
4.3.3.2 Strategies for entrepreneur actors
Traditional Advertisement
- Display Banner Ads - banners are located across all areas of the site except the Homepage;
- Youtube In-video Ads - one of the most popular and effective strategy used by marketers to
locate their advertisement applicable to the content of the video. The commercial content is
placed in the lower part of the video and marketers are billed for each impression. It is also
important to note, that after Google Inc. bought You Tube search engine also included You Tube videos in AdSense sysytem. From that point on Internet users use AdSens are able to
select contextually matched videos locate their commercial campaigns;
- TrueView in-stream Ads are inserted before, during or after the viewed video;
- Standard in-stream ads are inserted before, during or after the viewed video. There is no
option to skip it95.
94
Benefits of Youtube Partner Program, Youtube Inc. 2013. Guide can be reached at
http://support.google.com/youtube/bin/answer.py?hl=en&answer=72855 [20.03.2013]. 95
Youtube Advertising Formats, http://support.google.com/youtube/bin/answer.py?hl=en&answer=2467968
[24.04.2013].
42 Figure 9. You Tube Advertising Formats (from top to the bottom – Display Banner Ads,
Youtube inVideo Ads, TrueView in-stream Ads, standard in-stream Ads)
Source: http://support.google.com/youtube/bin/answer.py?hl=en&answer=2467968
[24.04.2013].
New Channel for TV broadcasters
Global popularity of You Tube arouses also concern of cable operators, which describe
You Tube as the most powerful competitor on the video market. As notes Juan P. Artero,
traditional TV broadcasters have two options – cooperate with You Tube or fade. Thus,
some of the American broadcasters (e.g. Time Warner) announced a program, which
would allow their clients to purchase a subscription to additional premium content located
on the You Tube. That is how video platform is becoming a perfect content base, where
premium content can be stored and distributed.
You Tube as a Customer Service
You Tube platform considered also as a perfect environment to establish and maintain the
contact with customers. As Meryl K. Evans notes, “It can be used as a highly effective
business tool. You can use it to show off your expertise, share knowledge, market your
43 products and connect with customers, colleagues and prospects”96. The platform can be
used as a customer guide, which visualizes solutions or service problems (audio-visual
FAQ). The intermedial potential of You Tube can be also used as a customer service,
where the client have a possibility to connect with a business via real-time message
system or comments.
4.4. Expert Opinion
Video advertisement is still associated with a high capital budget. Only big international
companies can afford it. Thus, commercial campaigns within You Tube are still not that
popular in Poland. “It’s important to point out, that traditional TV spots in the Social Media
platform are not effective. It’s a basic problem, which we observe on the market now. You
Tube is a community, not a TV Broadcaster. That is why, commercial approach and the
behaviour of users is different” – notes Bartosz Sikora97. In case of the You Tube marketers
should not just locate the product and promote it in traditional way, as they do in newspapers,
TV or radio. “The main goal of the Social Media campaign is to tell the story, which inspires
people to choose this specific brand in real life. So in case of You Tube commercial dialogue
is more indirect. A lot of marketers are still afraid of using this platform. The reason is – they
don’t know how to measure effectiveness. No doubts, billions of page views generated on the
platform monthly is a very tempting offer. Nevertheless, the effect is unpredictable. The best
way to use potential of the You Tube is to cooperate with influential vloggers through
commercial campaigns, affiliate programs or product placement”. You Tube will never be a
first channel of commercial dialogue, but it could be a prefect component of traditional
campaign.
96
Meryl K Evans, 34 ways to use Youtube for business, http://gigaom.com/2009/07/28/34-ways-to-use-youtubefor-business/ [23.04.2013].
97
Bartosz Sikora – Invention manager in international media network Mindshare Poland.
44 4.5. Conclusion
You Tube with his 4-billion-hours-video-user-generated-content and over 1 billion unique
users monthly is an undisputed leader on the global video market. The platform redefines the
audio-visual advertising business, generating video traffic for more than 60% of the videos
avaliable online. In this chapter we’ve discussed monetization potential of User Generated
Content located on the You Tube. Trying to examine the site from commercial perspective,
we have elaborated specific monetization model situable for UGC VoD Systems such as You
Tube. After the comprehensive empirical research on commercialization strategies and
considering 2 types of You Tube actors interested in monetization, we have elaborated
specific methods for entrepreneuer and non-entrepreneuer actors.
Trying to examine, how our methods are reflected on the market, we have interviewed some
of the influental marketers, asking them how Businesses monetize potential of You Tube. As
we found out, advertising market is still afraid of investing in commercial campaign within
You Tube. Particulary in Poland. Despite the fact, that Social Media are nowadays the most
influental global, no to mention the fastest, platform of mass communication, marketers still
prefer traditional advertisement. First, it’s a effectiveness measurement issue. You Tube is
still elaborating clear statistic interface, which can be used to analyze effects of the
commercial campaign. Second, lack of the knowledge how Social Media work. That is why
campaigns within SM have complementary character.
Nevertheless, from the user perspective channel considered as a great UGC monetization
platform. Even though Social Media networking on You Tube is still considered as a free time
activity, some of the hobbyists have succesfully monetized their channels, achieving more
than 100.000 $ revenue annually. Shane Dawson records short amateur comedy skits, earning
on them more than 315.000 $. Dane Boedigheimer creates a short web serial „The Annoying
Orange”, getting annually 288.000$ revenue. Philip DeFranco uploads short comments about
politics and culture, bringing in around 181.000 $ per year98. However, the monetization rate
for average vlogger is much lower. As Kevin Nalty notes „Conservative rate is a 1 $ per 1000
View”99. Thus, taking into consideration the average number of views for the You Tube
98
William Wei, Meet the Youtube Stars Making $ 100 000 Plus Per Year, „Business Insider Online”, (2010),
http://www.businessinsider.com/meet-the-richest-independent-youtube-stars-2010-8?op=1 [08.04.2013].
99
Kevin Nalty, How much money does a You Tube partner make?, http://willvideoforfood.com/2008/04/02/howmuch-money-does-a-youtube-partner-make/ [09.05.2013].
45 channel monthly (99, 160 impr.) it gives 1,188 $ in revenue per year100. All of these examples
confirm that monetization of User Generated Content on You Tube is relatively easy. The
most important thing is to have an idea and wish to fulfill it.
Syomos Inc., Inside You Tube Videos, http://www.sysomos.com/reports/youtube/ [09.05.2013]. 100
46 The list of definitions
Video on demand (VoD) it’s a system, which allows users to watch selected video content
online on demand. Example: You Tube, Hulu etc.
User Generated Content (UGC) - set of multimedia data (incl. text, audio, video, images etc.)
generated, modified or shared by the Internet users online.
Behavioral marketing (targeting) – set of persinalization techniques used by online websites
and advertisers to analyze online behavior of the Internet users in terms of improvement
effectiveness of their campaign.
Vlogger – video blogger.
Meta-data – literally data about data content. It’s a set of descriptions of data located in the
Internet (f.e. tags, image description etc.).
47 5. Conclusion
In the final chapter of the thesis we will try to conclude and summarize the main goals of our
empirical reserach. First we will compare average revenues on the Text Blogging and Video
Blogging business. Second, we will analyze applicability of the elaborated business
framework to the local internet market of Poland, trying to understand which medium Video
or Text has better commercial potential.
5.1. Assessing revenue
Trying to asses and analyze average annual revenues generated by monetization of Text Blogs
($ 24,086) and Video Blogs ($1,181) for non-entrepreneur actors, it is important to point out
that statistics are relative and depend on the popularity and social influence of
blogger/vlogger101. These figures are resulting from monetization of pageviews in terms of
Pay Per View or Pay Per Click rate and are subject of direct commercialization methods.
Incomes generated by indirect models are pretty difficult to measure. This stems from the
fact, that bloggers/vloggers usually do not make public their earnings. Financially, we can see
that average rate of the income from Text Blogging is higher that Video Blogging profit.
Thus, we can claim, that Text Blogging is more profitable.
In opinion of marketers, Text Blogs are also considered as a better platform of indirect
marketing, which bring consumers and ipso facto incomes to the company. As pointed out by
Bartosz Sikora „Cooperation with Text Bloggers is relatively cheap and the effect is pretty
sustained. Average sample blog campaign including product placement, product reviews and
affiliate programs costs 1000 $ monthly in Poland. Similar campaign on the popular website
can cost 3000 $ upwards”102. The interest of marketers arouses also social effect and the
charisma of blogger, who creates a positive aura around the product. All of this elements
speak for Text Blogging. That is why Text Blogs considered as the third (after Facebook and
Twitter) most effective Social Media channel from the commercial perspective103.
101
Op.cit. State of the Blogosphere, p.17.
Op.cit. Bartosz Sikora, p.44.
103
Ibidem.
102
48 5.2. Applicability of models to the local market
As we highlighted in the chapter 3 Text Blogs give a wide field for commercial affiliations.
Dozens of direct and indirect methods of commercialization for both groups of actors
(entrepreneur and non-entrepreneur actors) form Blogs as a business-friendly environment
with high effectiveness development trend. Marketers know exactly how to measure efficacy
of the commercial programs within Text Blogs (Google Analytics, Nielsen Online Campaign
Ratings etc.). On the other hand, bloggers know comprehensive monetization structures,
which were proven by dozens of bloggers before.
Meanwhile commercial campaigns on the VoD platforms such as You Tube are still
considered as an unpredictable game, effects of which are very difficult to measure. „The
actual usage of the You Tube in the commercial field in Poland is really low. Polish business
prefer not to risk, investing in proven traditional ads. You Tube for local marketers limits
campaign, imposing rules of the game” – notes Tomasz Tomczyk104.
Despite the fact, that You Tube still is not a common used Social Media for commercial
affiliations, the market slowly begins to see actual potential of the advertisement on the
Video Sharing Platforms. The most optimal solution for now is to use You Tube as a
supporting medium for Social Media campaign.
104
Op.cit. Tomasz Tomczyk, p.30 .
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52 List of figures
Figure 1. Tag Cloud presenting main characteristics of Web 2.0………………………….…10
Figure. 2 Business models for online services………………………………………….…….15
Figure. 3 The most popular commercial programs for bloggers…………………..…….........23
Figure. 4 Brands using blogosphere for commercial purposes…………………….…………24
Figure. 5 The structure of the UGC Platform Monetization Model…………………..………35
Figure. 6 Social Media Sites annual profit from UGC monetization (2010)…….…………...36
Figure. 7 Comparison of the video ranking……………………………………….……..........39
Figure 8. Example of Affiliate Marketing on You Tube………………….……………..........41
Figure 9. You Tube Advertising Formats………………………………….………………….43
List of Tables
Table. 1 Categories of Social Media………………………………………………………….12
Table. 2 Indirect and Direct methods of Text blog monetization…………………………….29
53