Yes, this is the great ambition of marketers today who hope to make hay via social networking. The making friends part is easy, the making money part, by and large, remains elusive although there is no shortage of experiments going on today to test various monetization strategies which by and large have missed the mark.

I think that the flaw today with the design of social networking strategies is the temptation to start with the money part first. Don’t get me wrong, the money part is critical (just ask the VCs who are funding the many social networking start ups or the execs who are running them). But the money will only ever come once there is a clear understanding of what the community values and how you as an advertiser can complement and enhance what the community is already getting. Don’t roll your eyes. Sounds really obvious, but it’s amazing how many marketers just turn a blind eye to that simple idea.

Case in point. NetFlixs. Anyone ever clicked on the NetFlixs ad that is now annoyingly on my Facebook newsfeed every day now? NetFlixs may be a nice company and all, but they are not my friend, and I don’t appreciate having to navigate around their big ad to see what my real friends are doing. I didn’t friend them and don’t want their update clogging up my news feed. Someone articulated the problem with social networking quite well. Imagine that you are sitting down to dinner with good friends and all of a sudden a complete stranger pulls up a chair and wants to join in. That’s my NetFlixs experience. So, instead of embracing them, I am a little bit irritated and want them to go away. They invited themselves into a space that I thought was reserved for friends and they aren’t one.

I recently talked to a group of marketing executives who asked a lot of the right questions about pursuing a social strategy. But one of the questions that wasn’t asked is perhaps the most important: how do you engage the network? Check out the [1] PepsiCooler which is Pepsi’s recent foray into social media. Pepsi is trying to “go social” by inviting customers in to help them shape new products. The site is monitored by two Pepsi guys and someone from their PR firm. But this site seems to be missing the mark, at least according to some of its visitors. Their take is that Pepsi/soda is a pretty impersonal product and they find it hard to really get jazzed and connected to a site where all they are doing is reacting to logo colors, shapes of cans, and size of vending machines. Their suggestion is to engage the community around fitness or good eating habits or obesity or something that they can really get engaged around and to connect the Pepsi brand with that in some positive way. There is a real disconnect between what the community believes will add value to their experience (and therefore will engage them, cause the community to grow and offer the opportunity to be monetized) and what Pepsi wants (the sale of more Pepsi products).

Sears is actually doing something very neat in this space that addresses another critical question related to the design of social networking strategies and that is, how do you earn the trust of the network? Sears knew that it had a problem with its brand perception and quality and decided to embrace “social” in a big way. They launched a site “MyS-K.com” which is a community dedicated to improving the Sears experience. They threw it out there and said to the community we know that we have to improve, but we don’t know how or in what areas until you tell us. They actually invited negative comments and then used them to engage the employees around a solution and customers around their brand. They used the negative and turned it into a positive – earning the trust of the network. Today, they have 80k registered users who feel that their views matter, and who can now be engaged around the Sears brand in ways that were never before possible – and who will likely become loyal Sears customers over time.

Social networking is a fascinating area and we are learning more and more each day about what motivates people to join social networks, and how their interactions can be converted into revenue. We’ve got our own take on some of the important principles of building and monetizing a social networking strategy; read [2] The Five Forces of Social Networking if you’re interested to learn more.

But more importantly, what do you think?.

[3]