There are lots of great blogs and other sources of information out there on how to manage online communities. But there is precious little information about generating revenue from online communities. “Monetizing Online Forums,” an e-book out today from Patrick O’Keefe, helps fill that information gap.
Two quick disclosures:
I’ve never met Patrick, but he’s said some nice things about this blog in the past and I’ve said some nice things about his.
The book was sponsored by Skimlinks, a company that inserts revenue-generating links into user-generated (and other) content. My company, Delphi Forums, uses their competitor, VigLink. While we’re very happy with VigLinks, both companies are good at what they do. If you’re considering this kind of link-insertion technology, I’d urge you to research both companies to see which is the best fit for your community.
Generally speaking, this book is for those that are new to the business of generating revenue from forums. But even experienced forum managers can find new ideas here.
Here are some of the key points Patrick made during our chat:
On respecting the community
“It’s a book about monetization, but more importantly, it’s a book about monetizing in the right way, in an appropriate manner that respects your community. When you overmonetize, when you do it poorly, you can do a great deal of damage to your community — perhaps even kill it, and that’s really what I want to prevent. We talk about all of the methods that are available. But more importantly, we talk about how you go ahead and integrate those methods, what the right way to do it is. It’s not about squeezing every last dime from your forum. It’s about monetizing in the most effective way possible while also respecting the community and doing it in a way that ensures that people have a positive member experience and continue to come back. ”
On how the culture of the community determines the monetization strategy
“I think it does play a role, and I think it’s important to consider the audience of your community — the people who are visiting. I’ve run technical communities like phpBBHacks.com, which is the largest unofficial resource for the phpBB forums software, and I run PhotoshopForums.com. Now that audience is Web developers, graphic designers — very technically savvy people, and I’m a part of that group, and we tend to be a little more sensitive toward advertising. We tend to be more critical. I also run KarateForums.com, which is more of a general, consumer sort of website, where people are technically savvy, but they’re engaged in martial arts and it’s a lot more of the average Web user. They will be more allowing of things that the more technical audience won’t.”
On how to get started generating revenue from a community
“My advice would be to take a look at the options that are out there. There are a number of different options out there in addition to display advertising, which is kind of the first place that people go to, and that’s with good reason.”
“So you set up an ad network and put some ads on your site and that is often how people start out. And that’s good because it gives you data — it gives you something to refer back to say ‘well, they’re paying me this, so if I’m going to do more and do it myself, I need to get paid more than that.’ So that’s a good thing to start out with. But look at your audience, how technically sensitive they are, and make decisions based upon that, and experiment a lot. I think that’s really the most important thing: to experiment with different methods, see what works best for you. Don’t be afraid to try new things, but also be prepared to make adjustments — to remove things that don’t work, and continue to improve.”
On the effectiveness of display ads, especially in forums
“I think that they can be effective and that they often are. When people think poorly about display ads, it’s tied to the ads being untargeted…I think part of what you can do to maximize the effectiveness of display advertising is to be targeted, is to work with a targeted ad network, if one exists in your niche.”
On approaching companies about advertising in enthusiast communities
“Try to find people that are already spending the money in your niche. So no matter what topic your community is focused on, there are other Web sites out there, there are Google keyword results. Go to Google and type in whatever your site’s about. See what companies are advertising. Those are some decent leads. And look at trade publications. See who is advertising in whatever trade magazine or online publications that your industry, your topic has, and reach out to those people. You may get a lot of no’s, but that’s also how you get your yes’s — by reaching out to people, making people aware of your site, letting them know that you do sell advertising and you’d like to sell advertising to them.”
On communities and brand sponsorships
“Sponsored brand placement is an opportunity to go deeper than display ads. There are a lot of different options and you’re really only limited by your imagination and what is appropriate for the community.”
On disclosure and transparency
“The manner of disclosure required depends on the method of monetization and depends on how it’s integrated. If anyone is sharing an opinion and they are going to be compensated through any kind of link that’s a part of that opinion, or sales from that product, then that needs to be clearly disclosed.”
“If you are using in-text solutions like a Skimlinks or that sort of service, then a lot of the best uses of those services, a lot of the most successful uses have been hallmarked by an enhanced level of disclosure — going beyond just a disclosure statement but also making an announcement to make sure people are aware that this is the program that’s being used in the community, how it works, and those sorts of things and that helps to make people more comfortable with it and also not be surprised by what it is, or think it’s something that’s invasive or that there’s something wrong with the community, that it is something that you are testing out right now and experimenting with.”