As a central element of glamorous consumer services like MySpace, Facebook, and Second Life, and as the most readily identifiable Web 2.0 attribute, user-generated content (UGC) is getting a lot of attention in the B2B media and information services arena.  The excitement is understandable.  Still, there is reason to question the degree of UGC’s value and importance for providers of more professionally-produced and consequential content to businesspeople and professionals.  On the media side, do advertisers want to pay for visibility on UGC pages, with their (typically) more untrammeled opinions and vox populi? The potential for unfortunate juxtapositions (the chief limitation, within the B2B world, of Google Adsense and similar search-enabled advertising networks) could be great.  And do the customers and users of subscription-based information services want to see un-edited or –verified material adjacent to, or integrated with, premium content?

The answers, in my view, are in fact “yes,” and “yes.”  Social media, defined as the sum of the ends and means of blogs, wikis, matching, tagging, polling, conferencing, collaborative search, and virtual worlds, is going to be a very big deal in B2B.  Attention is the trump card in 21st century media, and the business reader/user will increasingly look to the information created by existing and new social networks (of peers, partners, customers, experts, suppliers and the like) as a critical and constant source.  There are early examples, like IT Toolbox, of very profitable, online advertising-supported aggregators of user-to-user advice and comment.  Some established trade publishers are successfully monetizing UGC-based traffic at run-of-site rates, which is compelling, at least near-term, given that most B2B trade publishers’ online revenue growth is presently limited only by the amount of inventory (i.e., audience traffic) they have available to sell.  Furthermore, advertisers are beginning to recognize that the presence / accessibility of UGC contributes to increasingly important “audience-engagement metrics” like session length, frequency of visits, and depth of content interaction.  Among the chief publisher challenges will be the ability to maintain a high quality media environment by nurturing community while policing the merit, relevance, and appropriateness of users’ contributions.

In the subscription world, the smartest, most capable publishers will deploy value-added ways of organizing “raw” UGC (following pioneers like Nielsen Buzzmetrics and Newstex Blogs-on-Demand) to create must-have information for audiences in industry market segments both broad and narrow.   Social media extensions of more traditional sources of business information and intelligence (e.g. Hoover’s “Connect” Service with social networking partner Visible Path, and Generate, Inc., a start-up that Red Herring described as “LinkedIn meets Factiva meets Hoovers”, provide another model.   Online forums in UGC-intensive special interest areas show potential to generate uniquely credible quantitative data on product awareness, interest, and ownership.  Online communities and user-generated content have generated the most information content from the early evolution of online networks (e.g., Minitel) through their entry into the mainstream (AOL) and the flowering of the Internet (newsgroups and listservs), to the generous valuations placed on today’s consumer social media plays.  The emerging “Web 2.0” business models for monetizing community content and connections represent a fresh opportunity for B2B media and information providers to capture a greater share of new value creation. By Steve Sieck, President, SKS Advisors, Inc.  ssieck@nyc.rr.com

BIIA Newsletter May – 2007 Issue