Why we can’t monetise social media

If you haven’t heard of Farmville then you’re obviously not on Facebook. If you are on Facebook and don’t play Farmville, Facebook - Kerry Gaffney_1257932908034 it’s either because you did and gave up due to the neediness of the game or because you’re taking a principled stance against the news feed spamming application.

For those that are blissfully unaware of the game, FarmVille is a a Facebook application in which you play the role of a farmer (obv), the aim of the game is increase your experience. As your experience grows you can access more and better crops and each time you level up, you’re rewarded with Farm cash. Farm cash, which can also be bought with real life proper cash, is the only way you can increase the size of your farm and get goodies like extra fuel for your various farm vehicles.

It’s a simple game, though the creator, Zynga, is continually enhancing it by adding seasonal goodies, new crops and extra tasks. All of which seems to be working as there are currently over 63 million active players, up from 30 million at the end of August, approximately one fifth of all Facebook users, one half of all daily active uysers  and a number not short of the population of the UK. Personally I find it scarier that it has roughly six times the number of players that World of Warcraft does, which took four years to get to 11.5 million subscribers.

So how does this relate to monetising social media? Well FarmVille encourages every player to send gifts to their friends, a gift consisting of a tree, animal or decorative item, like picket fence. When you receive the item, the note accompanying it asks you to reciprocate. I think some items are only available via gifting and you can certainly get higher level items than your current level from affluent Farmer friends. While you are encouraged to spend cash to get farm coins, I don’t actually know of anyone who has done so, and therefore I think it is fairly safe to describe it as a ‘gift economy’ which reflects the economy of social networking as a whole.

In a gift economy goods and services are exchanged with no expectation of immediate reciprocity or indeed an explicit agreement of such, which compares to a market or barter economy where there is an explicit quid pro quo. Farmville would like to be a market economy but as users can get everything need by spending only time and giving gifts, I doubt it will achieve significant levels of non-advertising related income. Advertising in its own way is more like a barter economy, users donate some of their attention in return for receiving a free service, the advertiser gives some form of entertainment, offer or knowledge in return for that attention. Obviously the advertisers are hoping that the attention will turn into a transaction in the real world related market based economy.

So finally to my point, the internet, currently, is a largely gift giving economy, social networks particularly so. We pass on information we feel will be of use, respond to requests to fill in surveys, vote for people and generally never expect a direct return. Rather we hope that we will receive the same in return.

Which is what will make it difficult, if not impossible to monetise, or make it into a market economy. Just like FarmVille, why would we pay for something when we know we can get it for free?

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