Nowadays it’s hard to name a brand that has no online presence. A social media account is now a must for brands who would like to reach the widest audience possible, as people spend quite a lot of time on social media, especially after 2020.
However, the downtime of Facebook and its apps in October 2021 showed that it may be risky for companies to rely on social media in terms of building a community around their brands. Additionally, being just several hours away from the target audience may cost a brand a lot.
Therefore, communities are a new way to grow your brand, but not only on social media platforms. It is possible to build your own community without the use of third-party tools. Moreover, after you create an engaged community, you can use it as a channel to generate extra revenue.
8 ways to monetize an online community
In this article, we are going to look at different methods of monetizing your online community.
#1: Paid membership and subscriptions
Paid membership involves paying for additional exclusive content. This allows brands to leverage the interest that people already have in their content.
You can start by offering free membership for your community with some attention-grabbing content. As the community will be growing, you can add a paid membership option. The paid content can unlock access to webinars, podcast recordings, case studies, ebooks, online courses, private groups, etc.
For example, you have a mobile app with a collection of books on the topic of the community. Some participants read books, comment directly on the text, add tags to their comments. Others use these tags to search for information. A small portion of the books is available to community members for free. However, they can access new books by purchasing an electronic version of the book. As a result, you as the community owner get profit from those purchases.
Paid membership requires a lot of effort from the brand so that the community members get only high-quality, unique content and thus keep paying.
Subscriptions are similar to a paid membership. However, instead of exclusive content members get special perks and benefits. It can be profile upgrades, extra features, avatars, unlimited lives and extra weapons in games, customization options, events, branded merchandise, tech support, etc.
Examples:
- Harley Owners – events, branded merchandise, free admission to Harley-Davidson Museum, insurance services, tours, etc.
- Peak Freelance – expert interviews, premium products (e.g. signature email template bundle), high paying freelance job boards, Slack group, private conversations with other members
- InterNations – free access to official events (non-members need to pay an entrance fee), ability to join groups and organize own activities, anonymous profile browsing, unlimited private messages
#2: Live events
This includes organizing events such as workshops, meetups, and conferences, and charging a fee for that. In today’s post-pandemic world, it can also be online events in a webinar format, e.g. via Zoom or Zoom alternatives. Such events bring your community members together, no matter which part of the world they are in, and your brand gets extra revenue. To begin with, you can organize small meetups, but with the growth of the community, the events can become more ambitious and large-scale.
Organizing events can be time-consuming, but at the same time, it unlocks new opportunities to monetize your community. In addition to entrance fees, you can sell merchandise, ad space, sponsorships, and VIP tickets.
Example: TED Conferences – workshops, conference video archive, online networking via the custom app, meetups with speakers, extra special events, special hotel rooms, etc.
#3: Donations and crowdfunding
Donations are a sign of appreciation to a brand from its community members. The customers are offered to evaluate the product themselves and pay based on this evaluation and their income. The most popular type of donation recipients is online game streamers who collect donations while broadcasting.
Crowdfunding is one of the forms that donations can take. This is when donors unite their financial resources to collectively support the efforts of other people or brands. It is possible to collect donations via specialized platforms, such as Kickstarter or Indiegogo.
Launching a project on a crowdfunding platform is also a good way to reach a large audience and test a new product. For example, Bonobos, an American designer clothing store, was keen to release a shark costume that could be seen during Katy Perry’s Super Bowl performance. Before the launch of the crowdfunding campaign, the designers decided to get consumer opinion and arranged a survey on Twitter. As a result, the message got 3,700 retweets, and the project was launched on Kickstarter.
Source: clubhouse.com
Another example: In April 2021, Clubhouse introduced a monetization feature for creators. The new function was implemented in the form of tips, that is, quick donations within the app. All the money would go to the author. The user also needed to pay a 2.9% processing fee to the Clubhouse partner, Stripe. The social media platform itself did not receive any fees. Therefore, the purpose of the new feature was to monetize the community members’ content.
#4: Native advertising and sponsored content
Advertising is one of the simplest ways to monetize your online community. You can either partner with an ad network to run ads inside your product or contact the companies directly.
Native advertising is a way to show ads in the most natural, non-annoying way. That is, your community members would see ads in the form of posts in their activity feed inside your app or at your website, similar to ads on social media.
The full power of native advertising is revealed only when the posts look organically against the background of editorial content. Readers easily identify ads in the feed because they are different from regular content and can be annoying. And if the ad matches the style of the activity feed (picture, headlines, presentation style, etc.), the users will read the material, considering it useful.
For example, on the CNN website, there is a list with paid content next to the recommended editorial materials, with the same style, font, colors, and prominent place on the page.
This ad format is often used in mobile apps, when, together with the content produced by the app, the user sees a block similar in style and theme, but marked with an “ad” icon.
The purpose of native advertising is to adapt content to the platform where it is posted, so it is important that the content is really useful for the target audience. Here are some more examples of using sponsored content in communities.
The Mashable blog platform has sponsored material from MasterCard. The article explains how people use mobile devices, how the trends of interaction with them are changing, etc. The material also includes a large number of interesting facts, figures, statistics, and infographics on this topic. In addition, the article contains a block dedicated to the MasterCard digital payment system.
Forbes is a great platform for native advertising. One of the best examples of native advertising in the American Forbes is the FedEx delivery service. On behalf of FedEx, Forbes published an article “Why the first 6 months are extremely important for new employees”. The article touches upon the problem of recruiting skilled employees and offers helpful tips on how to keep specialists in your company. The topic is not directly related to FedEx, and the article does not even mention the service. But there are indirect associations in the text, thanks to which FedEx is shown as a good place to work.
#5: In-app purchases and digital products
The most common example of products that monetize their communities via in-app purchases and digital products is online games. Developers use in-app purchases when they want to earn money but do not really want to distribute the game for a fee.
Players can purchase in-game currency, weapons, and lives as well as unlock new levels and upgrade their characters for an extra fee. Many games provide an opportunity to get various decorative things for money: skins, costumes, hairstyles, accessories, etc. There are also loot boxes – boxes with a fixed value that can contain a random item. They are popular because the player never knows what they will get for their money.
#6: Cross-selling
In e-commerce, cross-selling refers to showing the shoppers products that are related to other products that they have already purchased, thus getting them to spend more money. But what does it have to do with community monetization? Actually, you can show these products marked as “community picks”, to demonstrate that the other members of the community like this product.
Cross-selling can help you expand your revenue stream beyond your internal membership and create new business opportunities by marketing the products to other similar groups of buyers.
#7: Affiliate marketing
Affiliate marketing is commission-based marketing. For example, Amazon provides a referral fee of up to 10% on products that you advertise in your community. If you mention a product in your community, then you can share a specific link through the Amazon Associate program. As a result, Amazon will pay you a commission for anyone who follows the link and buys the product. For instance, Coffeeble, a community for coffee lovers, includes links to Amazon pages of coffee beans, coffee makers, grinders, and other products that they recommend on their website.
Booking.com offers a similar program for travel community owners. If you recommend a hotel to community members by sharing a referral link, you will get paid for each booking of this hotel via the link.
By helping your audience find a product they need, you provide value to both the community and the business you partner with while making a profit for yourself at the same time.
#8: A trading area for members
This is a dedicated place inside your community where members can trade products with each other while you can collect fees from each transaction as a percentage of the transaction amount. For example, it can be a second-hand book trading platform if you own a community for book collectors. A great advantage of this way of monetization is that you need to set the platform up only once, and then it runs on its own.
Over to you
Having an online community is not only a way to unite people with similar interests and boost conversion. Actually, a community itself can be an extra source of income for your brand. You can monetize your brand in one of the following ways:
- introduce paid membership and subscriptions,
- organize live events,
- ask for donations,
- launch native ads and sponsored content,
- implement in-app purchases,
- consider cross-selling,
- consider affiliate marketing,
- create a trading area for members.
We hope that the article has been helpful and now you have all the necessary information to turn your online community into an additional revenue channel. If you’d like to learn more about building and managing a community, download our free e-book!
