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Capitalizing on Virtual Community Opportunities

The Web offers the opportunity for people worldwide to collaborate on any topic they desire; this is the essence of virtual communities. The best virtual communities foster collaboration and cooperation among participants to the benefit of all the members and the participating organizations. But how do an organization’s commercial interests fit in here? How can a business market its product or service within this egalitarian framework?

The answer lies in the marketing strategy employed. Consider three types of strategies: mass marketing, direct marketing and collaboration marketing. In mass marketing, product companies promote their image and generate awareness in order to sell more. In direct marketing, companies provide prospects more product information to create more knowledgeable buyers in order to sell more. In collaboration marketing, companies support prospective customers in understanding and evaluating alternatives, and in finding the right product or service to meet their needs — they help prospects to know more, earn their trust and thereby sell more.

The Web in general, and virtual communities in particular, support direct and collaborative marketing strategies.

Virtual community opportunities can be incorporated into a business’ marketing operations through three different approaches — these are hierarchical, with each subsequent approach requiring greater investment and commitment than the previous one. The first is about direct marketing, the second and third involve collaborative marketing. None are mass marketing strategies; the Internet is not, and may never be, an effective mass marketing vehicle.

  1. Sponsor — advertise in a community or sponsor community content
  2. Participate — provide content as an interactive participant in a virtual community
  3. Build — create and maintain a virtual community of customers

Each of these approaches is discussed below.

Advertising and Sponsorships in Virtual Communities

Virtual communities are made up principally of Web pages that contain various types of content; advertisements can be placed on or integrated with the Web pages delivering this content. (Virtual "worlds" offer more advertising alternatives; these are covered in the next section of this chapter.)

Decisions to advertise or sponsor content in virtual communities are similar to making advertising placement decisions in traditional media. The central considerations are the market focus and the theme of the community--that is what are the demographic/psychographic of a community’s participants? Search for communities that are aggregating people in the business’ target market and whose themes are in line with the image desired. Virtual community services which are focused on one market (e.g., Tripod’s focus on the GenX market, NetNoir’s focus on Afrocentric culture, Planet Out’s focus on the gay and lesbian market) can provide rich sources of prospects for promoting appropriate products and services.

Advertising rates on community sites reflect their ability to aggregate people with common traits. The "run of the site" banner ads on community sites like Tripod (a Generation X community) and iVillage (parenting and women’s communities) can cost as much as 100 percent more (on a cost per thousand impressions basis) than "run of the site" banners on search or portal sites such as Yahoo! and Excite which attract more diverse audiences. The more targeted the virtual community, the higher will be the ad rates—sites such as GeoCities and, often hailed as virtual communities, garner rates only slightly higher than the search engines because their services are made up of diverse sets of "neighborhoods" which cannot deliver groups with specific attributes with as much precision as targeted community sites like Tripod and iVillage.

Sponsorships differ from advertising in that the sponsor is identified more closely with production of content — for example, an HMO might sponsor the a stress reduction forum and refer its patients to the site carrying that content. Sponsorships do not directly promote the sponsor’s product or service — the promotion is for the community content/service being offered and the sponsor’s name is associated with that content/service. On SeniorNet, for example, MetLife’s Mature Market Group sponsored a "Solutions Forum" that enabled older people to collaborate on addressing important issues and problems. MetLife benefited from publicity generated by the Forum and the "halo effect" of being associated with an innovative project and a good cause.

Sponsorships are familiar in the sports world; examples include cigarette and beer companies’ sponsorship of auto racing, and bank and financial services’ sponsorships of tennis and golf tournaments. Companies choose the sporting events that attract people who presumably would be good customers for their products and services. The same is true of virtual community sponsorships. Examples include a car rental company sponsoring a forum on Driving Tours of Europe in a travel community like Expedia, or an online brokerage service sponsoring a guest chat series in an investment community like Motley Fool. In most cases, the sponsor’s payments for the sponsorship are more a function of the cost of producing the content than the CPM (cost per thousand) of the number of impressions created.

Here is how iVillage, a successful developer of women’s communities on the Web, describes sponsorship opportunities on their site, "our integrated sponsorship model allows marketers to take advantage of the unique attributes of the online medium and to build relationships with consumers in ways that are impossible in traditional media ... sponsorships integrate marketers into our communities making them valued contributors to the dialogues that are ongoing on all our sites."

As an advertiser works with sponsorship opportunities within a virtual community, its staff will become familiar with the content that is of most interest to that community. The organization’s management can then determine whether or not to move on to the next level and become an active participant in a virtual community.

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