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Most people who have succeeded in business can probably tell you something about the importance of having a mentor who will be able to teach you the ropes in starting your own business. This is because the experience that these successful businessmen can impart is a very important factor in shortening your learning curve and in helping you avoid the mistakes start-up entrepreneurs usually make.

Consider the fact that 90 percent of all start-up businesses fail within five years as opposed to 90 percent of franchised businesses succeeding within the same time span and you’ll begin to appreciate the benefits of not having to reinvent the wheel to make your business work.

Social Marketing Networks
Online social marketing networks have served the purpose of educating new entrepreneurs as well as honing the skills of experienced entrepreneurs. This is because in an online social marketing network, you can ask for a business advice by posting your questions in a new forum and reading the answers given by some successful members. An article about the most common mistakes a newbie makes in any line of business alone can save you from making the same costly mistake. Furthermore, your learning curve will be much shorter as the other members in the network can help you find information, contacts and procedures that you need to start or manage your business.

Conversely, these successful businessmen can also generate leads and business opportunities through these online social marketing networks by providing the new entrepreneurs the tools they need to successfully jump start their business. All in all, social marketing networks benefit every member by making available information, means of sharing ideas, and ways of gathering information otherwise unavailable through other means.

Criteria in Choosing your Online Social Marketing Network
Of course, not all social marketing networks are the same so you must choose wisely. The best online social marketing network for you will obviously be the ones you will benefit from the most. For this reason, if you are a new entrepreneur, choosing the social marketing network with the most active and most numerous successful members will be the best choice. This is because the advice that they will be able to impart regarding your concerns will be ones based on something they have encountered before that has worked and not something they have only theorized about.

Of course, surrounding yourself with successful people in your field of business will also give you the right frame of mind and outlook in overcoming the challenges that will come your way. These people will tend to be supportive and not pessimistic because they themselves have learned to overcome these problems when they were starting out on their own.

Make sure to also choose a group that is well lead and structured as this will prove to be very important in making the transactions and conversations easier to participate in and more beneficial for the members. Beware of some social networks having very lax leadership; this defeats the purpose of creating the group in the first place with some members filling the forums with spams, advertisements, viruses etc. With social marketing networks, learn more, share more and profit more.

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A review of ways marketers can align with these consumer hot spots.

Online social networks are hot. Those who participate in them belong to two, three, four, maybe even more than 10 or 20 different ones. They enjoy their features, upload photos, request business contacts and talk with friends.

For now, consumers get to do this for free. For now.

Although social networking in the offline world may be well-established — monetized through conferences, venues, referral fees and headhunters — the online world seems to just be examining the methods of monetization. The general principle still stands: if you have a large database of active users, you can make money — right?

Here is how it is being done today:

Advertising — A quick review of ad dollar expenditures in the U.S. reveals that only a small portion of the total is spent online — but that is going to change fast. Online advertising is once again booming — and just as public television and print media often can be sustained from pure advertising models, online is no different. The leading social networking sites (MySpace, Friendster and LinkedIN, along with many others) are primarily supported by advertising. Although their aggressive growth strategies mean that some may still be losing money, advertising represents a substantial amount of revenue.

Revenue Share/Per Transaction Fees — Someone clicks on her friend’s profile on Friendster and sees that he loves HBO’s hit series “Deadwood.” Clicking on the term ‘Deadwood” brings up all the other members who have the same interest — and an easy-to-purchase link for the “Deadwood” Season One DVD through Amazon. It’s essentially a focused advertising arrangement — marketers now have precision targeting through social networking profiles, tapping into user interests — and offering purchase options within very specific filters.

Events — Although revenue numbers generated from MySpace-style events are difficult to come by, these events are known to be well attended and a driving force behind MySpace’s impressive growth. In general, while it’s unlikely that offline events account for more than 10 percent of any social network’s revenue, events do make for great content and word-of-mouth advertising.

Moving forward, compelling new ways to monetize social networks will continue to emerge. The downside, however, is that some of these methods may not be in the user’s best interest — and they might end up taking the “cool” edge off these communities.

The Buying Club/Affiliate Revenue Models — With Buy.com’s purchase of Metails, a major offline and online retailer has recognized the power of social networking and made a commitment to the space. Yub.com enables users to develop their own social network focused around products, product ratings and, more importantly, a point-based rewards system that lets members benefit from a friend’s purchases. While Yub.com feels like heavy retail — with a full online mall that has grown rapidly in the last few months — the site is building a large user base and enticing members to recommend products to friends.
Although the buying club mentality might work only within certain types of social networks, the notion of a point system that rewards users for certain activities should be embraced more broadly. By developing a currency system, a social networking site can create very real incentives (promotions, giveaways, contests, fundraisers) for specific actions, from which everyone can benefit.

Corporate Sponsorship — Does being a fan of a brand mean that you want the owner of that brand to have all of your personal profile information? Practically speaking, the answer has to do with the type of brand and the reward the user receives for sharing that information. Corporations will take notice of these social networks and begin offering competitive services with products and (if they are smart) experience-based rewards. Just as Icelounge (described as a “MySpace for skaters”) was launched, larger brands will begin to do the same. Increased brand loyalty and sales opportunities will lead directly to monetization.

Country Clubs/Membership Fees — The SNS world can be a field of dreams — albeit for a price. As social networking site ASmallWorld.com has recently demonstrated, if you build a great social network — making it “invite-only,” with restrictions on activities — well, everyone wants to join. Naseeb likewise has proven that a focused social network, aimed at a specific niche, can justify an admission charge. From where I sit, I’d much rather be part of a social network with fewer members, no advertising, and no corporate sponsorship but that charges for entry.

Overall, social networking sites are experiencing hockey stick growth and, in the process, influencing new types of two-way brand experiences and community building on the web. Although the approaches to monetization outlined here just scratch the surface, revenue models abound. Any repository of personal data and contact information on a large group of users (perhaps better to call them “consumers”) inevitably translates to profit opportunities.

Let’s just hope that all our email accounts and personal profiles don’t end up in a spam database though a dot-com SNS auction.

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