This past Tuesday, we hosted a panel at RocketSpace to explore new strategies to monetization, more info here. Diana Stepner, Head of Future Technologies at Pearson, led the panel discussion, which included: Tyler Singletary the Developer Evangelist from Klout, Matt Sonefeldt the Head of Investor Relations from LinkedIn, Ed Zobrist of Rockyou, Nathan Hull the Digital Publisher at Penguin and Tien Tzuo the CEO at Zuora.
The conversation covered many topics related to monetization, including: business models, utilizing data and privacy concerns, mobile and digital strategy, testing different models of monetization, and finally future monetization models.
Highlights from the conversation:
The conversation kicked off with a discussion to define monetization as well as the purpose. During this discussion, the panel defined monetization as making money from your service and utilizing the defined model to build a business that is sustainable. Matt Sonefeldt suggested aligning the business model with the key value your business creates.
Data and Privacy:
Testing Different Models of Monetization:
Each company seemed to have tried a number of different monetization models. It was interesting to hear from Linkedin and Klout, two companies that experienced a lot of traction early on without defined business models. The takeaway here is that these companies try many different strategies to monetize, they learn from these tests, fail fast, and try out different models. Nathan Hull of Penguin, discussed his efforts to capture the attention of consumers as they are now experiencing and consuming content in different formats which has also changed the competitive landscape.
As the future is moving mobile, the companies had a fascinating discussion around this new frontier. Mobile consumption is dramatically impacting businesses, with nearly 20% of traffic from mobile, but very few companies have actually figured out how to capitalize on this new distribution channel. Penguin offered a great example with one of their products, Monshi Monsters, where 50% of their 7 to 11 year-olds are paid subscribers and in app purchases represent 80% of their revenue.
If companies can get customers who are passionate about their offering they will find a way to make money, it may not be optimized or maximized, but the company will eventually find a way to succeed. Facebook and Twitter are not good examples to draw from because they are such unique companies. The panel recommended starting with the value your customers are getting from your service and then determine how to monetize from there.
Finally, the audience discussed future business models as well as models we will look back on in 5 years and realize they started during this time, including: integrating technology with pre-tech (such as foursquare) and the growing trend in online to offline, companies like pinterest, google glasses, tablets, privacy, and finally companies that capitalize on concepts related to the sharing economy.