BtoB

Can communities provide big revenue boost?

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Social networking isn't just for teenagers and 20-somethings anymore. Following the path pioneered by such sites as MySpace, Facebook and Friendster, b-to-b media companies are setting up networking communities for their business audiences. But as with every new type of online offering—from blogs to podcasts to RSS—b-to-b publishers must come up with ways to monetize these platforms.

At IDG's InfoWorld.com, a community known as IT Exec-Connect was launched last May. Free to people who register and provide a certain amount of personal information, IT Exec-Connect gives members tools to expand their network of industry peers, plan on- or offline meetings, and communicate with InfoWorld editors and other experts. Members also can create their own blogs, participate in chat rooms and discussion groups, and invite friends and colleagues to join the community.

Initially, IT Exec-Connect will be supported by fairly traditional impression-based advertising and lead-generation programs, according to Virginia Hines, VP-general manager of Infoworld.com. In the longer term, Hines sees IT Exec-Connect and other Web 2.0 products under development "as a platform for higher-revenue, higher-margin advertising."

"The community-based business model gives you much more data on the people within the community because they will provide it in order to connect with other people like themselves," Hines said. "We hope to use the data members provide to help us identify people deeper in the buying cycle, whom we believe will be more valuable to advertisers."

Although InfoWorld.com cannot give advertisers personal information about users, the online publisher will be able to serve laser-targeted advertising to specific demographic groups, geographic regions, business types or people who are at a specific stage in the buying cycle.

"These types of data-intensive monetization strategies fill in the space between lead-generation programs and basic impression-based advertising," Hines said, adding that the result should be higher online ad rates. How much more? "I think that's still unplowed ground," she said, adding that IT Exec-Connect probably won't have the volume of members to employ the more data-intensive strategy this year.

While the creation of an online community such as IT Exec-Connect requires an upfront investment in platforms, Hines said there is minimal additional cost as the scale of users grows, resulting in higher margins as well as higher revenue.

Hines expects IT Exec-Connect to contribute as much as one-quarter of InfoWorld.com's increase in online revenue this year. The site is budgeted to be up 30% in revenue this year.

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