Profiting from your digital platform(s)


Some days ago, an online editor of a print magazine wanted to know why the magazine was not making money online, despite the many proposals they had sent to corporate clients (who, in his view, should be able to pay). In particular, he was baffled that a competing magazine was having its way with advertisers.

Like some managers/owners of digital platforms I have met, he was desperate for answers.

The digital media is evolving and so are the possible business models.

What works in one environment may not work in another.  Importing business models (hook, line and sinker) that have worked in other places and assuming that they would perform in your environment may be a grave mistake. It is time for a serious rethink.

In this article, I would loosely define a profitable digital platform as one that meets the objectives of its owners. These objectives would differ from business to business.

Within a business, it might differ at different stages of its growth. For instance, at a particular stage, the objective might be to build brand awareness. At later stages they may transit to ensuring consideration, generating leads, signing up new customers/users, retaining customers (retail and or corporate) or increasing the amount of money customers are willing to spend on the brand.

While an ambitious objective might look good on paper, the organisation’s maturity must be taken into consideration.

How is a profitable digital platform developed?

Let us review the case of XYZ (not real name), a mobile social networking platform.

In the beginning

XYZ started as a worldwide product from Lithuania in February 2011 – as a purely digital platform. It has a desktop and mobile version of its website, as well as mobile apps on some of the popular mobile and desktop application stores. It started growing organically in some African countries and in South East Asia. Some of its earliest users were from Nigeria. The site owners have since decided to focus on the West African market with good returns.

Customer demographics

It is one of the most fastest growing mobile social media sites in Africa. XYZ has over 12 million users worldwide with 8 million, 6 million, 800,000 and 350,000 users in Africa, Nigeria, Ghana and Kenya respectively. It is also one of the top 90 most visited websites in Nigeria.

Revenue model

The organisation has user-based (Business-to-Consumers or B2C) and brand-based (Business-to-Business or B2B) revenue streams.

Unique features

 It developed both B2C and B2B features.  XYZ developed separate tools for different industries: brand awareness and top of mind building tools for Fast Moving Consumer Goods, number portability systems and data revenue increase tools for telecommunications firms, data collection and lead generation tools for banks, customer acquisition and retention tools for mobile money companies. All these tools were built into its social media platform organically. The organization also undertakes segmented research for brands.  It recently collaborated with a leading jobs website to launch a jobs section. Its user features allow it to charge for Very Important Person status, earn money from gifts and its internal currency (XYZ coins). To use certain features on the site, users had to have a certain number of coins. The currency or “coins” were paid for from airtime on their phones.

Customer targeting

Like most mainstream social media sites, this platform has all the traditional demographic targeting options. In addition, it allows targeting of users by city/town and in larger cities it also does district and local government targeting. The platform allows pre-campaign research to get more detailed segments such as people driving cars, mothers, mobile operator SIM card of users, level of education, etc. Obviously, it is a good platform for handling campaigns that target specific locations.

Growing response

The rise of XYZ has been phenomenal. The platform has seen a growing interest from the banking, FMCG and food sectors. It has successfully and quietly undertaken a number of marketing campaigns for some of the biggest brands around – helping to make it a profitable brand in the process.

What can we learn from XYZ?

-Its touch points are compatible with the lifestyle of its intended users – mobile

-It allowed users to connect based on country, city/town levels as well as a wide range of interests

-It was clear about how its bills would be paid – by both the users and organisations

-For users, the payment process is seamless – payment is via airtime. To do this effectively, XYZ has plugged that aspect of its platform into those of the telecommunications firms.

-It allows a lot of customisation based on the outcome the client desires – a truly win-win scenario

-Its users fit into the customer segment of the advertisers it targets.

Where required, it conducts research into determining additional user details required

-It focused on attracting the right audience before reaching out to advertisers

-It ensures that advertisers can verify these demographic and psychographic details of users

-Where possibly it customizes solutions for advertisers each time

-It create unique options to enable advertisers target the desired customer segment on its platform with their message/offering.

by Dr. Anderson Uvie-Emegbo

The Punch


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