Facebook, Twitter, Google – these are all websites that we as users get to enjoy for free. So how do these boys make money, if we’re not paying anything for their services? Advertising, of course! But this no longer refers to internet giants simply selling media space on their online hubs, these guys are selling something a lot more valuable – consumer’s real thoughts and feelings. As TechCrunch puts it in this interesting article, think: “Word of mouth, sponsored. Trusted recommendations, promoted. Reviews from friends, endorsed.”

Again, this is a great example of convergence of media – taking earned media and letting marketers pay to augment the visibility (and overall potential) of this media. For example, say Mary likes Nike’s Facebook page. Nike can then pay Facebook to sponsor this story and boost its visibility on newsfeeds or have it come up in the sidebar, encouraging more of Mary’s friends to take similar actions. This is a lot more valid than simply buying media space on Facebook because consumers are more likely to listen and be interested when they see their friends, or people they know are too.

If we look at all these social media networks, we see the key to monetization is in the data, i.e. everything we as consumers say and do on these websites. To some extent this is used for more effective targeting (see my blog post on Lookalike audiences), but as seen above, we’re shifting more towards this new model of harnessing what’s true and authentic in all the positive actions consumers take towards your brand (earned media) and boosting it with ad dollars (paid media) for the world to see.

To me this means advertising that is more real and relevant in the utilitarian point of view, though the implications behind privacy are a whole other ethical debate.