My thoughts from a panel session at SportBusiness – Sport and New Media Conference in Manchester.

Topic Two – Show me the money? We all do Twitter, Facebook etc. but for a typical organisation how can this be monetised?

This topic was probably the one where the panel, including me, strayed from the question posed into other areas. The reason in my case is that I think that it is probably too early to think about Social media as a revenue generating activity.

There is a difference between how marketing is seen in the UK and other places in the world like the USA. In Britain, the focus is on resource and cost and where the money is going to come from. In the USA, marketing is seen as an investment. More people interacting with you equals more transactions.

Social Media is a communication tool. For most sporting organisations there will be no direct revenue from social media, however if it is done properly then social media tools can help sell more tickets or team kit or merchandise, perhaps even paid content.

If social media can increase the ARPF (Average Revenue Per Fan) by increasing the frequency that they buy or increasing the basket value of the purchase, then it is doing its job. In some cases, it may stem the decline of revenue or allow venues to become more adaptable, like selling last minute seats or targeting specific geo-locations.

There are some areas where Social Media can generate revenue, but consumers need to see real value. Unlike the web, consumers are conditioned to paying for mobile content. Downloadable applications are one way that sporting organisations could make money from emerging technology, but whether or not this is social media is another question.

For sports that are marginalised in the UK, and there are many, monetisation of content may be possible. For sports that are ignored by traditional press and tv but have a demanding fanbase, there is an opportunity to sell pay-per-view coverage or live updates.  Why buy 3 channels of sport that I don’t want to watch when I could use the money to watch the sports I do want to watch online?

This is not monetising Social Media as such, but social media can be used very effectively to signpost the availability of this content.

If Social Media is going to be used to generate revenue, then it will probably have to use micro-payments. Most social media based revenue models are based on advertising which is yet to be proven as viable or up-selling the user to a better experience.

One area where micropayments and social media are generating revenue is gaming. Applications like Farmville and Mafia-Wars are well known, but there are also examples in sport. Massive multiplayer online games are extremely popular in sailing for example, with events like the Vendee Globe and Volvo Ocean Race attracting hundreds of thousands of online players. The mechanism is simple. Anyone can play for free, but for a small fee upgrades are available.

So can Social Media be monetised? Should it? Rather than seeing Social Media as a way to get more money from fans, sport should be using Social Media as a way of keeping people occupied for longer. Making it easier to find out the results, making it easier to find exclusive content, making it easier to offer feedback and feel like they are part of the conversation.

Every click, comment, photo upload, follow, retweet, video view or poke that relates to your brand is a sliver of time in someone’s busy day that they have spent with you. While it might not be pounds and pence in your books, that time spent might be the most valuable thing that social media can give you.

Read Part 3 – Corporate versus Personal Free Speech.