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iStrategy Forum BerliniStrategy Forum Berlin
Make money from social networks –example XING
Ralf Ahamer – CMO XING AG
7,07,5
7,98,3
Members in mio. Premium Members in thousands.
36% 41%
01 XING in Numbers (I)
470513
550
606635
662
Ralf Ahamer – CMO XING AG
Q2 08 Q3 08 Q4 08 Q1 09 Q2 09 Q3 09
6,16,4
7,0
Q2 08 Q3 08 Q4 08 Q1 09 Q2 09 Q3 09
470513
12,9 *35,3
02 XING in Numbers (II)
EBITDA in Mio € Umsatz in Mio €
37% margin
Ralf Ahamer – CMO XING AG
2007 2008
6,9
2007 2008
19,6
* Excluding one-off costs for M&A
03 Business Model
5,95 € mth.
6,95 € mth. 3 Months
12 Months
Premium Membership Recruiter Membership
The XING Business Model consists of three main revenue streams: Premium Membership, Recruiting Business & Advertising/ e-commerce.
39,95 € mth.
29,95 € mth. 3 Months
6 Months
1.
Ralf Ahamer – CMO XING AG
5,95 € mth.
4,95 € mth.
12 Months
24 Months
Job Board:
0,59 €/ Click on Job Ad
Advertising/E-commerce
Various models, Best Offers, Enterprise Groups, Opensocial
39,95 € mth.
49,95 € mth.
6 Months
12 Months
Fix-price 395€, 495€ , Corp sol.
2.
3.
Ralf Ahamer – CMO XING AG
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Social Networks – What? Why? Value?
Social Networks
Ideas
Jobs
Contacts
Social networks don‘t create something new – they just provide an infrastructure for typical human behavior on the web.
01
Ralf Ahamer – CMO XING AG
Me
Contacts
Employees
Efficiency
Productivity
Friends
Love
Spare time
Ideas
Jobs
Contacts
Social networks don‘t create something new – they just provide an infrastructure for typical human behavior on the web.
Social Networks02
Ralf Ahamer – CMO XING AG
Contacts
Employees
Efficiency
Productivity
Friends
Love
Spare time
Me
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Dating Jobs
Deals
Acquisition
Family
Spare time
Almost 80% of experts and management clearly separate business from pleasure
03 Social networks – professional vs. private
Ralf Ahamer – CMO XING AG
Dating Jobs
Ideas
Sales
Friendship
Party
Source: Forsa Study 01/ 2010
The Case of the Facebook Fairy
[Intern at a US Bank]:“I just wanted to let you know that I will not be able to come into work tomorrow. Something came up at home and I had to go to New York this morning for the next couple of days.”
04
Social Networks are a source of information for everyone. They are comparable to elephants – they never forget...
Ralf Ahamer – CMO XING AG
morning for the next couple of days.”
[Boss]: “Thanks for letting us know–hope everything is ok in New York. (PS: cool wand)”
Social networks in real life05
Ralf Ahamer – CMO XING AG
Viral Gene: Social Networks06The virality lies in the added value that every additional member brings to the community.
The viral growth in social networks is a function of:
the added value a member gets through another member.
Ralf Ahamer – CMO XING AG
through another member.
Value of social networks07
Value socialnetwork
Registered Members
ActivityX=
The value of social networks heavily depends on two values: number of members and activity.
Ralf Ahamer – CMO XING AG
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network MembersActivityX=
If one of these is zero – the whole value is zero!
Ralf Ahamer – CMO XING AG
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Shift of reach to social networks
01 Social Communities – a success story
• „Republic“ Facebook is the 4th biggest country behindChina, India and USA. 300.000.000 facebook users changetheir status message every day.
• In the last 60 seconds 15 hours of video material has beenuploaded onto youtube. If you add all videos material together it equals 3.500 years of content (and growing)
Ralf Ahamer – CMO XING AG
Source: Sueddeutsche.de 19.09.2009
together it equals 3.500 years of content (and growing)
• Twitter had 1000% growth last year
02 Social Communities – a success storySearch queries reflect demand
Google Search queries reflect trends …
Facebook vs.eBay
Ralf Ahamer – CMO XING AG
Source: Google trends: Graph above shows search queries worldwide. Graph below shows search queries in Germany
Facebook vs.Spiegel
03 Social Communities – a success storyBack in time ���� 2006 vs. 2009 (1/2)
IVW Page Impressions October 2006: Portals portals everywhere…
Ralf Ahamer – CMO XING AG
Source: IVW, Page impressions x1000 for October 2006
04 Social Communities – a success storyBack in time ���� 2006 vs. 2009 (2/2)
IVW Page Impressions October 2009: Invasion of the social networks
Ralf Ahamer – CMO XING AG
Source: IVW, Page impressions x1000 for October 2006
On XING there are up to 25% of all employees of one industry in Germany.
Reach of XING05
Ralf Ahamer – CMO XING AG
Source: XING internal statistics for DE– Q4 2008
Usage of Social Networks
Brand Communities:
Social Book-marking Communities:
Micro-blogging Sites:
Podcasts:
Internet Usage Frequency
Social Networks are already the 2nd most popular entry point to the web
06
Ralf Ahamer – CMO XING AG
Source: Ralf Schengber, 2009.
Search engines:
Social Networking Sites:
Forums:
Web-blogs:
Video-Portals:
Photo-Portals:
Special Interest Communities:
Everyday Several times / week Several times / month
Seldom Never / I do not know that
No Answer
Social Networks – Context to information
Why bother “Google”…. ..when your peers are just a click away?
Our Friends, colleagues, family give context to massive information overflow.
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Unidirectional(search function)
Volume(search results)
Standard(Portal site)
Bidirectional instantaneity(comment & tweet features)
Value (recommendation power)
Personal(personal profile site)
= where information LIVES.“The warm Internet”
= where information ACCUMULATES.“The cold Internet”
Exkurs: Community Make or „Buy“ or both
¾ of all brand communities fail. Using existing social networks & infrastructure could lower costs and increase speed.
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- Over 2k Ikea employees on XING.com
- Over 90k users are fans on facebook
Ralf Ahamer – CMO XING AG
Ikea community „Hej“ recently started
- Over 90k users are fans on facebook
Ralf Ahamer – CMO XING AG
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Chancen und Risiken von Social Networks fürUnternehmen
Social networks and business models
Subscription fees: Professional Networking 01Professional Networks have a huge (perceived) value that directly translates into “money”. Members are willing to pay for that.
Ralf Ahamer – CMO XING AG
ConsultingMedia -Print Internet and New MediaSales Public RelationsScience and ResearchTrainingHuman Resources
Real Estate Arts and EntertainmentTelecommunications Media - Broadcast Advertising Financial Services IT
Hotel and Travel Education Restaurant and Food Beverage and Tobacco University Customer Services Accounting
Source: >82k tests on mynetworkvalue.com
Advertising: Web 2.0 in the marketing mix
100% 7-12% 30%
88-92%
ca.60-65%
The value chain of media planning must be disrupted. New scales ofratings need to be defined.
02
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Advertiser Media Agency PublisherAdvertising medium
Kickbacks
Results:• Marketstructure and value system constrain marketing• Advertisers have (too) little Know-How for Web (2.0)• Media Budgets go mainly in “traditional” online media
Virtual products
The expected market size of virtual goods (US) is 1,6 Mrd $*. Social games share will be half of it.
- 65.000.000 Farmers*** - 26.000.000 are feeding their cows every day for 2 hours- 100 Mio $/year revenue*
03
- 90 Mio $ in 2009 with virtual gifts**
Ralf Ahamer – CMO XING AG
*Inside Virtual Goods - The Future of Social Gaming** C’t Magazine 2010
*Source: Business Week*** check on facebook feb 2010: 78Mio already
Conclusion04
1. Clear goal and topic for your community• „Having influence on your target group“ as a goal leads you in the wrong direction• Set-up a clear topic for your community – e.g. “Professional networking”
2. Members and Activity• Value of a social network = registered members X activity• Viral growth in SN = function of value a member gets through another member
Ralf Ahamer – CMO XING AG
3. Keep in mind: First of all - your community serves its members• Consequently listen to the community and serve their needs first• See the community as living organism – it’s a socio-psychological challenge
4. Use existing infrastructure and reach• Use XING, facebook etc. to leverage your business• Community work needs resources in your company
Thank youfor your kind attention!
Ralf Ahamer – CMO XING AG
Presentation Titel | Author | City, 11/02/2010 27