Make Money From Social Networks | Ralf Ahamer, Xing | iStrategy, Berlin
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Transcript of Make Money From Social Networks | Ralf Ahamer, Xing | iStrategy, Berlin
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iStrategy Forum BerliniStrategy Forum Berlin
Make money from social networks –example XING
Ralf Ahamer – CMO XING AG
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7,07,5
7,98,3
Members in mio. Premium Members in thousands.
36% 41%
01 XING in Numbers (I)
470513
550
606635
662
Ralf Ahamer – CMO XING AG
Q2 08 Q3 08 Q4 08 Q1 09 Q2 09 Q3 09
6,16,4
7,0
Q2 08 Q3 08 Q4 08 Q1 09 Q2 09 Q3 09
470513
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12,9 *35,3
02 XING in Numbers (II)
EBITDA in Mio € Umsatz in Mio €
37% margin
Ralf Ahamer – CMO XING AG
2007 2008
6,9
2007 2008
19,6
* Excluding one-off costs for M&A
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03 Business Model
5,95 € mth.
6,95 € mth. 3 Months
12 Months
Premium Membership Recruiter Membership
The XING Business Model consists of three main revenue streams: Premium Membership, Recruiting Business & Advertising/ e-commerce.
39,95 € mth.
29,95 € mth. 3 Months
6 Months
1.
Ralf Ahamer – CMO XING AG
5,95 € mth.
4,95 € mth.
12 Months
24 Months
Job Board:
0,59 €/ Click on Job Ad
Advertising/E-commerce
Various models, Best Offers, Enterprise Groups, Opensocial
39,95 € mth.
49,95 € mth.
6 Months
12 Months
Fix-price 395€, 495€ , Corp sol.
2.
3.
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Ralf Ahamer – CMO XING AG
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Social Networks – What? Why? Value?
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Social Networks
Ideas
Jobs
Contacts
Social networks don‘t create something new – they just provide an infrastructure for typical human behavior on the web.
01
Ralf Ahamer – CMO XING AG
Me
Contacts
Employees
Efficiency
Productivity
Friends
Love
Spare time
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Ideas
Jobs
Contacts
Social networks don‘t create something new – they just provide an infrastructure for typical human behavior on the web.
Social Networks02
Ralf Ahamer – CMO XING AG
Contacts
Employees
Efficiency
Productivity
Friends
Love
Spare time
Me
7
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Dating Jobs
Deals
Acquisition
Family
Spare time
Almost 80% of experts and management clearly separate business from pleasure
03 Social networks – professional vs. private
Ralf Ahamer – CMO XING AG
Dating Jobs
Ideas
Sales
Friendship
Party
Source: Forsa Study 01/ 2010
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The Case of the Facebook Fairy
[Intern at a US Bank]:“I just wanted to let you know that I will not be able to come into work tomorrow. Something came up at home and I had to go to New York this morning for the next couple of days.”
04
Social Networks are a source of information for everyone. They are comparable to elephants – they never forget...
Ralf Ahamer – CMO XING AG
morning for the next couple of days.”
[Boss]: “Thanks for letting us know–hope everything is ok in New York. (PS: cool wand)”
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Social networks in real life05
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Viral Gene: Social Networks06The virality lies in the added value that every additional member brings to the community.
The viral growth in social networks is a function of:
the added value a member gets through another member.
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through another member.
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Value of social networks07
Value socialnetwork
Registered Members
ActivityX=
The value of social networks heavily depends on two values: number of members and activity.
Ralf Ahamer – CMO XING AG
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network MembersActivityX=
If one of these is zero – the whole value is zero!
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Ralf Ahamer – CMO XING AG
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Shift of reach to social networks
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01 Social Communities – a success story
• „Republic“ Facebook is the 4th biggest country behindChina, India and USA. 300.000.000 facebook users changetheir status message every day.
• In the last 60 seconds 15 hours of video material has beenuploaded onto youtube. If you add all videos material together it equals 3.500 years of content (and growing)
Ralf Ahamer – CMO XING AG
Source: Sueddeutsche.de 19.09.2009
together it equals 3.500 years of content (and growing)
• Twitter had 1000% growth last year
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02 Social Communities – a success storySearch queries reflect demand
Google Search queries reflect trends …
Facebook vs.eBay
Ralf Ahamer – CMO XING AG
Source: Google trends: Graph above shows search queries worldwide. Graph below shows search queries in Germany
Facebook vs.Spiegel
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03 Social Communities – a success storyBack in time ���� 2006 vs. 2009 (1/2)
IVW Page Impressions October 2006: Portals portals everywhere…
Ralf Ahamer – CMO XING AG
Source: IVW, Page impressions x1000 for October 2006
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04 Social Communities – a success storyBack in time ���� 2006 vs. 2009 (2/2)
IVW Page Impressions October 2009: Invasion of the social networks
Ralf Ahamer – CMO XING AG
Source: IVW, Page impressions x1000 for October 2006
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On XING there are up to 25% of all employees of one industry in Germany.
Reach of XING05
Ralf Ahamer – CMO XING AG
Source: XING internal statistics for DE– Q4 2008
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Usage of Social Networks
Brand Communities:
Social Book-marking Communities:
Micro-blogging Sites:
Podcasts:
Internet Usage Frequency
Social Networks are already the 2nd most popular entry point to the web
06
Ralf Ahamer – CMO XING AG
Source: Ralf Schengber, 2009.
Search engines:
Social Networking Sites:
Forums:
Web-blogs:
Video-Portals:
Photo-Portals:
Special Interest Communities:
Everyday Several times / week Several times / month
Seldom Never / I do not know that
No Answer
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Social Networks – Context to information
Why bother “Google”…. ..when your peers are just a click away?
Our Friends, colleagues, family give context to massive information overflow.
07
Ralf Ahamer – CMO XING AG
Unidirectional(search function)
Volume(search results)
Standard(Portal site)
Bidirectional instantaneity(comment & tweet features)
Value (recommendation power)
Personal(personal profile site)
= where information LIVES.“The warm Internet”
= where information ACCUMULATES.“The cold Internet”
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Exkurs: Community Make or „Buy“ or both
¾ of all brand communities fail. Using existing social networks & infrastructure could lower costs and increase speed.
08
- Over 2k Ikea employees on XING.com
- Over 90k users are fans on facebook
Ralf Ahamer – CMO XING AG
Ikea community „Hej“ recently started
- Over 90k users are fans on facebook
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Chancen und Risiken von Social Networks fürUnternehmen
Social networks and business models
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Subscription fees: Professional Networking 01Professional Networks have a huge (perceived) value that directly translates into “money”. Members are willing to pay for that.
Ralf Ahamer – CMO XING AG
ConsultingMedia -Print Internet and New MediaSales Public RelationsScience and ResearchTrainingHuman Resources
Real Estate Arts and EntertainmentTelecommunications Media - Broadcast Advertising Financial Services IT
Hotel and Travel Education Restaurant and Food Beverage and Tobacco University Customer Services Accounting
Source: >82k tests on mynetworkvalue.com
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Advertising: Web 2.0 in the marketing mix
100% 7-12% 30%
88-92%
ca.60-65%
The value chain of media planning must be disrupted. New scales ofratings need to be defined.
02
Ralf Ahamer – CMO XING AG
Advertiser Media Agency PublisherAdvertising medium
Kickbacks
Results:• Marketstructure and value system constrain marketing• Advertisers have (too) little Know-How for Web (2.0)• Media Budgets go mainly in “traditional” online media
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Virtual products
The expected market size of virtual goods (US) is 1,6 Mrd $*. Social games share will be half of it.
- 65.000.000 Farmers*** - 26.000.000 are feeding their cows every day for 2 hours- 100 Mio $/year revenue*
03
- 90 Mio $ in 2009 with virtual gifts**
Ralf Ahamer – CMO XING AG
*Inside Virtual Goods - The Future of Social Gaming** C’t Magazine 2010
*Source: Business Week*** check on facebook feb 2010: 78Mio already
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Conclusion04
1. Clear goal and topic for your community• „Having influence on your target group“ as a goal leads you in the wrong direction• Set-up a clear topic for your community – e.g. “Professional networking”
2. Members and Activity• Value of a social network = registered members X activity• Viral growth in SN = function of value a member gets through another member
Ralf Ahamer – CMO XING AG
3. Keep in mind: First of all - your community serves its members• Consequently listen to the community and serve their needs first• See the community as living organism – it’s a socio-psychological challenge
4. Use existing infrastructure and reach• Use XING, facebook etc. to leverage your business• Community work needs resources in your company
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Thank youfor your kind attention!
Ralf Ahamer – CMO XING AG
Presentation Titel | Author | City, 11/02/2010 27