September 29, 2006

LiveJournal pushes ad sponsored communities, features

Marshall Kirkpatrick

25 comments »

LiveJournal just announced that they will soon begin offering sponsored communities with benefits to participating users and sponsored features provided by companies other than LiveJournal. The SixApart owned social networking site has slowly rolled these plans out over recent months but just made the official announcement tonight. Early feedback from users is decidedly negative. Update: Here’s the newest from the company on this, it appears that they backed down on much of the original plans.

Sponsored communities will be groups sponsored by advertisers who are offering group members things like exclusive movie trailers, behind-the-scenes footage, travel advice, tips and tricks, special deals. It’s funny, I thought most of that was already freely available all over the internet. There is some potential here, and this is an increasingly common direction for social networks to move in, but it will be a difficult strategy to pull off in a compelling way.

The second part of the plan seems much more viable. Sponsored features will be technical add-ons that LiveJournal hasn’t offered its users so far. The first will be an SMS integration service sponsored by Amp’dMobile. This make some sense and it will be good to see what kind of creative features are provided by partners.

Two concerns that arise: the baby could get thrown out with the bath water in that users could be so upset at seeing their alternative to MySpace growing increasingly ad driven that they don’t care about the ad sponsored special features. LiveJournal offers paid accounts already and some users will undoubtedly feel that if they’ve paid for an account, they don’t want to see ads. The new sponsored SMS service, though, will be available only to paid members. That makes sense to cut down on abuse, but we’ll see how those users respond to both paying and seeing ads.

With social networking sites becoming either a dime a dozen or worth a billion dollars, depending on how you look at it, there’s an interesting balance being sought between the need to profit and the need to keep allegedly fickle users happy.

A second concern is that the sponsored features strategy seems to conflict with the spirit of open APIs. LiveJournal uses not the MetaWeblog API or the Blogger API, but one of its own. It’s been praised as good to work with, but not a lot of people apparently do. Is there some kind of artificial scarcity of access to LiveJournal that will be required in order monetize integration with the platform? Or is it just a matter of anyone being able to program against the LiveJournal API but only sponsors having their applications integrated directly into the service and offered by SixApart to the customers. It will be interesting to see if this is an issue.

Online social networking obviously drives a lot of page views, but it’s been questioned by many people whether those users click on ads very often. Hitwise says MySpace drives more retail traffic than MSN Search, but the conversion rate is another question. Sponsored communities are something that many if not all social networks seem to be moving towards, but the sponsored features sound very interesting. If this works, it could well be a model we see employed more often. Perhaps someone will sponsor a MySpace IM that funcitons.

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Comments

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  1. Startups.in/India

    Honestly, I think I’m now a tad bored reading the news about these (dime a dozen) social/video networks. No matter what they say, eventually, everyone seems to be doing the same stuff and it doesn’t interest me any more and I can’t even see how it is going to benefit the end user. It just seem plain useless. I would be more interested in learning about new innovations.

  2. Drama 2.0

    Startups: I agree. This model, however, is a step in the right direction. I believe the only way to monetize social networks effectively over the long-term will be through models that include integrated promotions. Unfortunately, the LiveJournal offering seems too generic and cookie-cutter. Their first sponsored community is for a movie called Science of Sleep. Take a look. Nothing to write home about.

    There is no doubt that there is value here for the brand. Getting users to interact around your brand is a company’s wet dream. The problem is that LiveJournal is not looking at the other side of the equation that is required for success: providing value to the end user for this interaction. So I can go to the Science of Sleep community, or a community for Pepsi, Toyota, etc. What’s my incentive? Where is the motivation and value? For there to be a successful marriage between brands and users, both must feel that they’re getting something out of the relationship. This doesn’t cut it, and I don’t know whether the LiveJournal community is conducive to this.

    Part of the problem with LiveJournal is that it’s such a nebulous network filled will all kinds of disparate content. You can post about anything. There’s no core subject that connects the entire community. This makes it difficult to come up with a coherent model that can tie the integrated promotions in with something that unites the users. Because of this, it’s hard to position these communities as anything but a commercial initiative and clearly the negative feedback is a reflection of this. Another problem is that they have a community that is used to the status quo and most communities are not initially receptive to these types of changes. LiveJournal’s situation is complicated even further because they have paid users that will obviously feel that their payments should prevent them from having to see anything related to advertising.

    As much as many laugh at Dogster, and as much as I question their need for $1 million in funding, these types of integrated promotions can work much better within a niche community than they can with something as broad as LiveJournal.

  3. Biz Stone

    I think LJers expected something different when the time finally came for parent company Six Apart, Ltd to make money from this community. Especially the paid members who were assured in writing that they “will never see any advertising on LiveJournal as long as they’re logged in to their account.” These users will learn about Amp’d Mobile’s policy of “No credit checks, no bills, no promises to keep.” but they might wonder if that bit about promises being kept is unique to Amp’d Mobile’s marketing slogan. I wonder if LJ administrators could have taken more time to gather consensus from the community and come up with a different sponsorship model.

    When Facebook suddenly announced new features that the community did not like, they told users to “calm down.” Later, they were forced to apologize and deeply address the issue. Similarly, LJ announced this big news and received a resoundingly negative reaction. LJ representative rahaeli responded by suggesting to the users that they are confused and they need to understand that the new sponsorships are about getting “free stuff!” She went on to tell users “You don’t have to use sponsored features” even though they have been asking for this particular feature for years and personally, she can’t wait to use it.

    With passionate communities, communication is important before a major new change is instituted.

  4. biotunnel

    With passionate communities, communication is important before a major new change is instituted. >>>> hey !! passionate cmmunity owner … read this

  5. Jitendra

    Interesting step…Although the idea of ad sponsored community just seems wrong. Why would a user want to participate in such a community unless they are paid? Wouldn’t they go to the company’s web site instead of participating in a company sponsored web site…I understand they are looking for ways to monetize the community but unless a company adds value to the community as it exists, its hard to see how it will succeed.

    LJ needs to come up with better ideas for letting companies to participate in existing communities.

  6. Anil

    It’s probably worth updating the post to reflect this news update, in the same community. I’m glad to see the new interest in LiveJournal’s feature announcements — you might also want to mention the recent, effusively-received addition of system notifications.

    To point out a few inaccuracies: Paid users will not see ads. LiveJournal supports many APIs. Its own, the MetaWeblog API, and the IETF Atom API. LiveJournal is also completely open source, so interested parties can add their own APIs if they wish. And it’s possible to completely import and export your information from LiveJournal.

  7. webduck

    “Ad sponsored communities”….um, you mean like gather.com? If you haven’t checked it out yet, you might want to. If you are a good enough writer, they actually PAY YOU for what you write. If you are just ‘average’ like me, you earn points to cash in. So, I have to look at an ad once in a while? No biggy to me.

    I can see why LJ users who were told they would never see advertising might be a tad angry. I would be. When Pogo.com came out with their game site they had ads and players had no choice until Pogo made it so you could join Club Pogo and not see ads if you paid to play.

  8. beckyzoole

    Anil (who neglects to mention that he is the VP of Six Apart, LiveJournal’s parent company) claims that Paid users will not see ads.

    However, the new sponsored feature, SMS integration, is being rolled out to paid users only.

    What benefit will the sponsor receive, if only paid users can use the sponsored service, but paid users will not see the sponsor’s ads?

    As a paid LJ user myself, I’d certainly like to have somebody explain this!

  9. Weaver

    Events have somewhat overtaken Anil’s post above: the update has made matters worse, with calls for a letter-writing campaign (yes, letters!), and boycotts of the advertisers as well as the billboard. Livejournal’s anti-advertising community has more.

    Some have argued that paid users - people who typically pay $25 per year for a commercial-free environment and other perks - will see advertisements, for they will continue to see the “sponsored communities” through the site. Others are simply against the whole concept of Livejournal as an advertising billboard, and suggest that the sale to Six Apart was a bad move.

  10. Mark Kraft

    Ad sponsored communities are a complete breach of promise with LiveJournal’s users.

    As taken from LiveJournal’s social contract in April 2004:

    We stand firm in saying that we will:

    Stay advertisement free

    It may be because it’s one of our biggest pet peeves, or it may be because they don’t garner a lot of money, but nonetheless, we promise to never offer advertising space in our service or on our pages.

    SixApart knew of this promise prior to their purchase of LiveJournal, but they took it upon themselves to break it, time and time again. I think the overwhelmingly negative reaction they’re getting by users against this — thousands of people commenting on this idea, saying “no!” — is indicative of the fact that the people of LiveJournal feel that SixApart are going too far, and have broken too many promises to its users, without so much as a “we’re sorry” to its users, who they seem to have no true respect for.

    Despite Anil Dash’s statement that “it’s possible to completely import and export your information from LiveJournal”, its customers are still pretty much locked in.

    Just read LiveJournal’s own FAQ on this issue, which says “LiveJournal does not provide any way to add a large number of entries from another site to your LiveJournal simultaneously. . . There is no way for entries that have been downloaded from another LiveJournal or from a journal on another site to be uploaded to a LiveJournal.”

    Indeed, the only way to export LiveJournal entries that LJ itself provides is a monthly archiving tool which provides formatting that you can’t even import into another LJ Code-based site. This despite the fact that users have been requesting the ability to migrate entries to and from LJ for years.

    Sure sounds like a lock-in to me… and it’s one that Anil should probably be more honest about. This, frankly, is indicative of the kind of deceptive doublespeak that people in LJ have had to deal with from SixApart ever since the acquisition.