What to build & how to make money out of that

Social Media?

-A Marketer’s Perspectives

By Michelle Zou

November 4, 2009

What to Expect and NOT to Expect From the Presentation

• You will NOT learn what specific features to build on Social Media

• But you WILL learn a framework to think

– how companies use Social Media

– who and why spend money on Social Media

This will help YOU generate new ideas when you build the next cool “stuff”

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Yes, you can build cool stuffs

BUT…

What you built You get PAID

Who use it?

Who can you make money from?

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Who Use Social Media?

Social Media

User publish &

share

Consumers

Marketing

Product Developmt.

Customer Support

Businesses Jumped Into Social Media!!!

Businesses want to take advantages of Social Media’s ability to send just the right message to the right people

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Consumers vs. Marketers

Consumers…

FREE!

Marketers…

TargetingCommunicating

Demand Generating

ROI……

But I will Pay for some “stuff “…

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Help Businesses to Market to Target Audience

• 95% of 1,217 business decision makers surveyed late last year said they plan to use social networks. • 53% of more than 300 marketers planned to increase social-media marketing spending (in 2009)

- From Forrester Research

Marketers Spent on:

Campaigns/ AdsTools to help them to reach target audience (Applications, Widgets, etc.)Business Intelligence / Customer IntelligenceAnalytical tools

Opportunity: Help Marketers to

DO THEIR JOB EASILY

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The Marketer’s Job

Market Segments

Target Audience

Message…

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How Marketers Use Social Media?

Market Segments

Target Audience

FindReachListen

Message…

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Microsoft Example

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Microsoft Example

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Microsoft Example

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Microsoft Example

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How to Make Money From

Consumers?

Think Beyond Ad-Funded FREE SN Services…

Play “NICHE”

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And go VIRAL …

Use those “Social Network Butterflies”

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QQ’S MONEY MAKING SECRETS

The Successful Business Models for Making Money From Consumers

And be CREATIVE…

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How much can you spend on QQ services/year?

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US$ 300,000

And that is $30M for your life (100 years)!

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QQ/Tencent – a BILLION Dollar Company

2008 Result YOY Growth

Revenue $1,047M 87%

IVAS $719M 96%

Mobile VAS $205M 73%

Online Ads $121M 68%

IVAS 69%

Mobile & telecom VAS

20%

Online Ads 11%

QQ/Tencent 2008 Revenue

QQ Services• Information:

– Portal QQ.com

• Communication: – Messenger (QQ IM, Mobile IM

& SMS, Corporate, Web QQ)– QQ Mail

• Social networking/Blogging– QQ Zone

• Entertainment: – QQ Live – TV service– QQ Show – Avatars and

Personal Expression– QQ Pet – QQ Game

• Online auction business– Paipai – C2C Auction

• Search (Soso)• Mobile VAS (the above PC

services on mobile phones)

• Payment– QQ Payment

IVAS

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QQ’s Money Marking Formula

subscription for “add-on” services

($1.5/month for EACH service)

Micro-transactions for “add-on” services ($0.15-$2/transaction)

Free for entry level services

The slides after are a few examples of QQ IVAS business model

# of users exposed

Digital assets you paid to acquire will EXPIRE!

Free to HOOK you in

+ Micro-transactions

+ Monthly Subscription (31.4M IVAS + 14.7M MVAS accts)

+ Ads

------------------------------------------$$$$$$$$

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QQ IM

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QQ Instant Messenger

The buddy’s avatar, paid or QQ membership subscription to acquire from QQ Show.

Ads

Free entry level avatar for female & male

QQ Membership “VIP3”

Ads

• Free IM service monetize by • Ads• VAS services integrated to

the QQ IM platform such as avatar (See QQ Show)

• VIP Membership

• QQ VIP membership: RMB10/month ($1.5/month)• Six VIP ranks: VIP1-6, can

grow by usage or payment methodologies

• QQ membership benefits:– More features: can have large

groups; such as faster growth in the ranking system; exclusive emoticons; QQ VAS discounts; more online storage (non-member 16M, VIP members 128M-1.6G)

– Discounts in real life services: movie tickets, shopping (online & offline), airline tickets, e-learning

– Privilege in QQ games: new games, discount in game avatars, exclusive gifts

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QQ Monetization: VAS services integrated to QQ Platform

VAP services integrated to QQ IM platform

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QQ Show

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QQ Monetization: QQ Show

These components are cost 2-4.5 QQ coins each ($0.3-$0.7), users can buy, send gift, or ask as a gift from friends

To get the whole set on the left will cost 14 QQ coins ($2)

• QQ Show is the avatar (display picture) that represent the user anywhere in the QQ platform. • The default avatar is very plain (almost naked). Personalize avatars is very popular in the QQ world, users can customize almost everything, the face, the nose, the eyes, etc. Users can also buy the clothes, accessories and background to make their online images pretty.

They expire in 3 months

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QQ Monetization: QQ Show Membership Red Diamond

•QQ Show Red Diamond membership through monthly subscription: RMB10/month ($1.5); users lose all the QQ shows acquired once subscription stopped.

•Seven ranks: LV1-7, can grow by usage or payment methodologies.

•Membership Benefits: all QQ Shows are free to get; special sign to show your membership identity; can set change QQ shows automatically; can send free QQ show gifts to friends;

Showing in your contact card

Showing in the conversation window

Showing in your profile

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*Ask others to pay for you

Buy for other people

Buy it• Every small module is personalizable.

• A bunch of choices

• Affordable prices to buy

Always be able to get things with discount.

Add to your ‘wish box’26

Different choice of the background (free or cost 1-2QQ coins)

Show the photo on QQ- need to pay 3 Q-coins

QQ Show: Take a photo with someone

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Q-zone (Blogging & SN Service)

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QQ Monetization: Qzone and Membership Yellow Diamond

Qzone Yellow Diamond membership: RMB10/monthSeven ranks: LV1-7, can grow by usage or payment methodologiesBenefits: all decorations for Qzone are free to get; 1G photo album; special sign to show your membership identity

“Yellow Diamond” sign Showing in your QZone

Qzone “mall” to purchase all kinds of items: Skin, theme, display pictures, flash, music box, etc.

Qzone features are free for entry level; charges for personalization (decoration items) or upgraded services such as playing background music, more online storage for album, etc.

• Every customizable element can be purchased (0.12 -1.2USD/element)

• Songs in the media library for users to put in their music box are for sale (0.3USD/song)

• Q-zone membership (1.25USD per month)

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Q-Zone• Features: blog, music box, album, mini house and garden, personalization and decoration, etc.

• Every element is customizable with many choices. (Flash loading animation, Background, skin, media player, navigation, decoration, photo booth, and etc.)

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http://119489818.qzone.qq.com/

Album

Earn 1 score per one visit

Earn 3 scores per one content adding

Earn 1 score per one visitor’s comment

Earn 8 scores per 1 QQ money spent for QQ purchase.

All the plants are levelized. You

can only buy the plants within you level of score.

• Qzone plant to show how healthy your Qzoneis –need QQ points to get them grow

• Pay to get more storage

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Music boxhttp://93521903.qzone.qq.com/

• Music box can download and play music as background for the Qzone•All the music need to be purchased ($0.3/song)•Green Diamond Membership can download all music: RMB10/month ($1.5)•

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Mini place• User can build different houses by purchasing all the furniture and decoration.

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QQ Game

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Buy entry animation for QQ games

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Pay to play QQ gamesA simple online gamble game, QQ takes away 20% of the money

QQ Dou Di ZhuPromotion example for Blue Diamond members

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QQ Pet

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Features and MonetizationVirtual pet. Users don’t need to spend much time breeding pet on daily bases. But they need to complete the tasks regularly, e.g. breeding.

User can provide things that the pet needs daily by playing small games with it.

User can apply the special QQ pet’s winks in IM conversation to express the special feelings.

User can play with pet on the desktop.

Attend the pets’ community

Monetization:• Buy some goods for pet.• It needs to pay to bring pet from

dead• Join special social network needs

money.

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Even QQ numbers can make $$$!

Monthly subscription fee (10 QQ coins/Month)

+ Initial fee

-------------------------------

QQ sells special numbers (millions of them), they are easier to remember, with lucky “6” or “8” in, associated to mobile numbers, birth day, year, events, you name it!

> $20/year/QQ ID

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Thank You!