Tuesday, October 7, 2008

Effect the Economy Will Have on Community 2.0

The main topic of conversations and thoughts running through everyone's mind, seems to be the economy and how it will affect them. The Community 2.0 industry is not above these concerns. This article, discusses the web 1.0 bubble that burst, and how that may be mirrored in today's time with Community 2.0. As we have reported before marketing on social network sites has not been proven as valuable yet, and, as this correlating article mentions, "social networks are struggling with how best to monetize their millions of users". The article further provides this quote from Debra Williamson, senior analyst at eMarketer, as saying:

"As in many other developing advertising markets, much of the spending on social networks is driven by leading-edge marketers who are willing to take risks"

Since organizations are still unsure of implementation methods that will maximize their ROI, and are taking a harder look at their budgets, do you think that the world of C2.0 will see a large decrease in their advertising revenue? In risky times, trends are generally to follow tried and true approaches as opposed to risking money on new concepts. Conversely, some feel that it is important to take risks at exactly times like these. What are your thoughts?


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2 comments:

Scott Dodds (Lithium) said...

I see ad-revenue supported social media companies in trouble if they can't show a return on those ad dollars spent.

But that is in contrast to those companies who can prove ROI and/or cost savings from network effects in the enterprise.

What may also do well are customer-run sites that companies can support or sponsor to build advocates and engage their markets.

Priya said...

Thanks for your comment. We just did another post on community 2.0 and the economy, regarding whether this could spell the downfall of Facebook. Many are saying that Facebook is one of those companies who can't provide ROI. Check it out:

http://community20.blogspot.com/2008/10/is-end-in-sight-for-facebook.html