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2007 - There appears to be a growing trend in the social networking industry. Marketers appear to be targeting site’s with smaller, niche memberships more so now than ever before. According to eMarketer, last year advertisers spent $920 million on advertising within social networks - and of that amount, 8.2 percent went to niche networks. This year it is estimated that spending will increase to $2.1 billion, and the take for smaller networks will rise to 10%. This is due to what is perceived as an improved return on investment for an advertiser’s marketing dollar through secondary social channels. Think of it like this. If a company wants to market a $250,000 sports car, would it seem more worthwhile to entice the eyes of millions of heavily-indebted undergraduates on Facebook? Or would it be better to seek clicks from a smaller supply of people, such as Webbercast.com., that are generally in their 30's to 60's? Sometimes it seems like there is already an overwhelming number of social networks out there, and it seems to just keep growing every time you look. But with data now showing that marketers are willing to look at the general demographic of a membership before purchasing ad spots, don’t be surprised to see even more niches getting a network this year.
2008 The Nearly Never Ending Market for Niche Social Networks Written by Marshall Kirkpatrick / November 19, 2007 1:17 PM / 18 Comments « Prior Post Next Post » A niche social network for people recovering from addiction, called SoberCircle, hit Del.icio.us popular this morning and it made me think - "my goodness, the market for niche social networks must be nearly infinite." SoberCircle has never been profiled on any of the top web 2.0 blogs and we haven't received any press releases announcing their support for OpenSocial - but the site is yet another social network that made a mark on the web today. Most people who follow new developments in web applications closely contend that MySpace, Facebook and LinkedIn are so dominant, and their tiny challengers so numerous, that launching Yet Another Social Network is among the most foolish things an entrepreneur today can do. I disagree. What is a social network? Typically, it's just a website that offers users a profile page, the ability to publish to the web, to add other users as friends and to send user-to-user messages, or sitemail. That's simple but powerful stuff; it's functionality that countless real-world organizations will benefit from in the coming years as turnkey solutions become increasingly visible. Here's my 6 reasons why I believe that SoberCircle and many of the other seemingly random, obscure niche social networks online are in fact viable businesses in a huge, untapped market. There are huge numbers of users in play. The sheer number of people online already and coming online every day cannot be ignored. Many niche content sites, from sites about street drag racing to obscure medical conditions to drag racing while suffering from obscure medical conditions, that already receive traffic on more than monetizable levels. I talk to companies regularly that see substantial traffic to sites few of us here have likely heard of. If your niche website is not receiving significant traffic, and I know that many startup web app companies are not, then there's something wrong with your marketing, your product or your luck. It's probably not that your target market is saturated - there's very few that are. In-group communication is key People will share information with groups of people they know they can relate to that they never would share in a general public forum. We all seek empathy and many of us have life experiences that cannot be meaningfully discussed outside of a context of shared understanding and a base of common experience. People in recovery from substance abuse is one such huge market, people with communicable diseases another, the insanely wealthy yet another - and the list goes on. Groups on existing social networks may satisfy some of this demand, but not the way that dedicated, topical "walled-gardens" will. Privacy is in High Demand Talk to the people at Vox, at Multiply, at Tumblr and elsewhere and they will tell you that there is substantial demand for social networking and content publishing functionality behind a wall of permission. The idea that "privacy is gone" is itself an illusion. People choose what they publish to the open web and many choose to publish to closed pages for family, friends or even just personal consumption. Sex sells - on a plane, in a train, among stamp collectors and cheese aficionados. The page that drove so much traffic to SoberCircle today? A prurient tale about "the most dangerous drug in the world," used in various crimes related to sex. (Not linking to it here, but you tried to click, didn't you?) Every niche that has its members has its scandal. People will come to your site if they can find that scandal and if they are interested enough in the niche, they will return. Fetishes themselves are infinite. I swear though, I read Valleywag daily for research purposes only! Many people don't want to participate in general interest social networks. They will for work or a particular hobby, though. Data portability can enable a scalable soc net ecosystem. From OpenID to OAuth to Open Widget - I mean Google's Open Social - many, many people are working to make it easier to move from one social network to another. When, in the glorious future, you can explore a new network with an existing login - knowing that if you choose to leave it you can take your new friends, writings etc. with you back to your home base, then social networks will flourish. When I can easily post one blog post to both my Facebook notes and my SoberCircle profile (example only!) and another post to SoberCircle alone - then market conditions will have arrived for niche networks to truly thrive. Let's go forth and network! I really believe that this industry is just in its infancy. None of the incumbents are guaranteed total domination into the future and there's no reason to believe that the long tail of niche social networks won't prove economically viable, individually as well as in aggregate. Of course most startups in this sector will fail, that's the case in any sector, but as startup tech markets go I think it's a very smart market to be getting into right now.
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