Most of the revenue generated exists in ad placement for targeted audiences, right? After all, it is widely believed that advertising is the wheel that keeps most internet sites, especially large social networks, turning.
But in a recent report generated by AdWeek, studies reveal that although advertising is indeed a cash cow, the real profits exist in the information that is gathered from the high-profile websites. In places where content is king, in social media, data is king and companies are willing to pay big bucks for it.
Surveys show that Internet users spend over 22% of their online time in a social media venue like Facebook and Twitter. Of this time that they spend online, they are sharing a lot of personal information about themselves; likes and preferences on movies, music, food, travel and all sorts of other things. This is the information that publishers and advertisers want. They want and need to know what the online community is searching for so that they can tailor their marketing campaigns to be more in line with their searches.
For the unbeknownst consumer in a social networking forum, it is just another day. Perhaps they are discussing their latest wine choices, or where they plan to go on vacation in the summer. For the online company who wants to cater to a certain demographic, this information is valuable. They may gather the social data on a daily, weekly or even quarterly basis to gauge the needs and uses of their potential customers.
Social data-gathering is a huge profit maker. Customers are found through data-gathering based on their sharing and communication habits. For example, if enough users are on Twitter talking about the new CD released by a an artist from a popular label, chances are that the label will release another CD from another artist not too long after the first one. Studying the habits of consumers and social chatter is what drives sales and shapes marketing pitches.