Monetize your social site without annoying your users

Social sites, whether they are discovery platforms, blogs, or forums, are tight knit communities built on trust. These communities can understandably be sensitive to advertising.
However, even the most buzz-worthy social media darlings need revenue to fuel their growth and help fund administration, support and development. Without revenue (or the potential of revenue for investors), there would be no community.
Luckily, monetization efforts don’t have to be at odds with your user base. If you implement your monetization strategy with care, it’s possible to maximize revenue potential and keep members happy. My personal concern with this problem led me to found Skimlinks, so this is an area near and dear to my heart.
Whether you use sponsorships, ads, affiliate marketing, premium memberships or a combination of these strategies, the following tips will help you monetize your forum or social site.

1. Disclose

Let members know about your monetization plans before you roll them out, so no one is caught off guard. It’s best to explain why you’re doing this, i.e. “we need to earn enough in order to provide all the services people enjoy now and add even more down the road.”
Disclosure is often required to comply with FTC guidelines that state: “The post of a blogger who receives cash or in-kind payment to review a product is considered an endorsement.” Whether you’re legally obligated or not, full transparency is the nice thing to do, and it will help you maintain the goodwill you’ve worked hard to build.
At a minimum, include disclosure text in the “About us” or “Privacy” section of your site. Even better, add a link in the footer or navigation bar to a dedicated disclosure page or acknowledgement of monetization. For example, explains that the links on their shopping site are affiliate links and that the money they make from these links helps fund their service.

2. Don’t intrude on the user experience

While ads may play a role in your business plan, be sure to think about how intrusive monetization schemes, such as glaring ads, will impact the aesthetic of your site and ultimately your user experience. If possible, try to place relevant ads so that they add to the experience, rather than take away.
Google AdWords is a good model. Sponsored links appear next to Google search results. Ads are related to the searches taking place, so they are often of interest to users. Because of this, people aren’t as bothered by the ads, and they’re more likely to click and make a purchase. This creates a win-win solution for Google and a business model that pays them big time — 96 percent of Google’s $37.9 billion in revenue in 2011 came from advertising.
If you choose to monetize in a way that complements the style of your site, you should be in good shape. Facebook has done very well with a clean interface and ads that are more social in nature. Contrast this to MySpace, which was a bit chaotic and overwhelming in their ad presentation.
When implemented thoughtfully, affiliate marketing can be a win-win-win for the marketplace, with sites making money from content, merchants making money from sales, and consumers finding new products, as well as enjoying free services with minimal intrusion.

3. Consider rolling out changes gradually 

If you sense that your community is particularly sensitive to advertising, introduce it in stages and test it first with different groups. 
By implementing your monetization strategy in stages, you can monitor user reactions and identify any issues prior to a full-scale launch. Creative solutions include using only affiliated links and showing ads to non-logged in users, or perhaps only doing so on older posts.
When you roll monetization to a wider community base, encourage users to give constructive feedback, both positive and negative. Then tweak settings as necessary. If you’re monetizing a forum, make sure the moderators fully understand your plans and intentions ahead of time. When questions arise within the community, moderators can respond quickly and provide support for your decision to monetize.

4. Engage, but don’t react

Inevitably, a handful of users will be opposed to any monetization in the community, and it’s important to resist the temptation to react emotionally to a small number of complaints.
Instead, inform your community that you are actively listening to all their feedback and reiterate the importance of monetization to your ability to provide — and enhance — the services they love. Be careful to not let a tiny but vocal handful of individuals affect your company’s decisions.

5. Let members opt out 

If applicable or possible, you should allow members to opt out of certain monetization programs. For example, if you’re using affiliate links in your community, give members the ability to disable links if they prefer. Announce this capability to everyone in your disclosure or privately communicate it to members with complaints.
Often, it’s only a handful of members who object to monetization and giving them an opportunity to opt out can diffuse potential issues. At the end of the day, monetization — whether by advertising, affiliate marketing, or subscription fees — is the only way a site can afford to provide peoples’ favorite services.
If you roll out a solution that allows you to monetize without changing the user experience or compromising editorial integrity, your community will likely accept your decision — as long as you keep them in the loop.
Alicia Navarro is CEO and co-founder of Skimlinks. She tweets at @AliciaNavarro.
Image Courtesy of Flickr user NeoGaboX.