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February 19, 2008

Not All Users are Created Equal

Last week I mentioned the need to differentiate between the quality of traffic to your social application and the quantity.   Today over at Mashable Co-founder of Developers Analytics, Charles Yong, goes further when he explains:

“Someone with the right social graph can easily result in tens of thousands of installs, whereas a person with the wrong social graph may fetch only a few extra installs beyond their own. Hence, we believe there may be a paradigm shift in the near future as to how credit is distributed in link exchange and ultimately, advertising. As the platform matures, advertisers will slowly move from the traditional “clickthrough” strategy towards the more organic “viral referral” strategy. Hence, an advertiser should pay more for a referral by a user with 1000 friends, than a user with 3. We hope to be able to measure those values in a meaningful and accurate way.”

This idea of measuring the social capital of each user is a game changer in my opinion.  The critical change is the shift from the collective power of the "users" to the power of the individual.  This will lead to significant changes in how applications are developed and marketed.

As the social graph continues to be exposed and sites learn how to monetize the influence of their audience, those same users are going to leverage their social capital to exert their control.  If you as site owner are getting paid because I interact with your site and bring my thousand person social graph with me, I better be taken care of.  I could see this evolving to the point where individual users are able to demand a portion of the advertising revenue they generate.  We might all be micro celebrities with micro endorsement deals.      

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