Selling the data of social network users could be one way for sites to increase revenue according to a new report from In-Stat.
“Each social networking site collects a plethora of personal and demographic data on each member,” said Jill Meyers of In-Stat “and while selling these data to target marketing groups may be unappealing to site members, it may be the best route to profitability for site operators.”
On the issue of selling users data most site members would find it beyond unappealing. An anonymous source had this to say on the subject. “As an individual who frequents both MySpace and Facebook, the notion of having my personal data sold to the highest bidder is frightening.”
“I understand that dealing with advertising is a necessary evil in order for these sites to continue offering free services to members. When the integrity of personal data begins being compromised, however, it opens up a door that most users would prefer not to step through.”
While increasing revenue is a key factor for success, some social networks growth is stagnant. ComScore Media Metrix found a range of visitor growth of anywhere from 1177 percent (Sconex.com) to 40 percent (LiveJournal.com).
Microsoft has given their input on how to boost social networking ad revenue. They commissioned a Metrix Lab study of how social networkers use the sites. The study found adding brand profiles that can be shared with friends is effective, with a quarter of social networkers posting views on ads and a third forwarding spaces, ads or links.
eMarketer senior analyst Debra Aho Williamson says that the time for branded profiles is probably coming to a close.
“The notion of creating a MySpace ad profile page and collecting friends was popular in 2006 but will likely give way this year, as users tire of collecting ‘friends,'” says Ms. Williamson.
