Monetizing Social Networks: LinkedIn vs. Facebook by: Sarah Tricha

LinkedIn shows it pays to know your users motivation. Business Insider recently published an article “How LinkedIn Gets TWENTY Times More Money Per User Than Facebook.”  In it they report that for every hour a user spends on the site LinkedIn gets $1.03 compared to 6.2 cents per user/hour for Facebook.  Users spend way more time on Facebook, averaging 6.4 hours per month compared to 18 minutes per month on LinkedIn. But the ability to highly monetize those hours isn’t there. Why? Because Facebook is for everybody, everywhere, at all times.

Facebook started as a way to for college students to socialize, but in its inclusiveness and expansion has resulted in the loss of any niche market it may have once had. As a consequence, it is very challenging to make generalizations about what a given Facebook user may want or know. Certainly by tracking keywords Facebook can work to place ads accordingly and, hopefully, unobtrusively. But there isn’t an ability to productize users and say “Facebook users want/represent/need X.” The ability to know what the users on your social network want is the key to monetization. And while Facebook users clearly want to connect and communicate, there is little else one can say in general about the motivations of Facebook users.

In comparison, LinkedIn users are there for a clear purpose: to build their professional network. There is no ambiguity around what a LinkedIn user wants, needs, or knows. As a result, LinkedIn users can be monetized as a product. LinkedIn’s product offering isn’t resume building or job hunting, its talent. Not surprisingly, LinkedIn makes most of its money from its LinkedIn Recruiter offering for talent scouts.

The lesson? If you want to build a social network that can be productized as a network and not just another communications channel for marketing, you need to build it around a clear, shared user motivation, not simply the ability to communicate.

by Sarah Tricha

July 20th, 2012

Tags: Social Media, social media, Social Strategy