Government is about to engage international consultants to examine transfer pricing—a means to secure top energy revenues—and to look especially at Atlantic LNG, Finance Minister Colm Imbert said...
You are here
Profiting from social media
The following guide is intended to aid readers in analysing the case profiting from social media. When analysing a case, remember that there are many possible approaches and solutions and the goal is to develop your analytical and problem-solving skills rather than figure out “the one right answer.”
Paula Drakes created a YouTube channel three years ago and started posting videos about how to crochet baby items as a way to share this dying craft with a wider audience in the hopes that others might be attracted to a hobby that she was passionate about.
The response to Paula’s videos was very enthusiastic and she quickly began attracting a loyal following. This led her to join YouTube’s Partner programme which not only allowed Paula to generate income from her videos but also access a set of tools to track her audience and manage the performance of her videos.
Achieving a personal milestone of attracting 1,000,000 viewers to her videos had planted the idea that she could turn her hobby into a career. An article she had read about other entrepreneurs who earned millions of dollars annually from their YouTube channels inspired her to seriously consider quitting her job and focusing on making home videos.
The major question in her mind, however, was did she have what it takes to become a YouTube star?
Q1. What factors have contributed to Paula’s success?
A key contributor to Paula’s success is the fact that she identified a niche audience whose needs were not being adequately addressed. Content reigns supreme on social media in terms of attracting attention and creating positive word of mouth.
The frequency of her posts therefore guaranteed that visitors to her channel would find new and interesting material on a regular basis, which increased the likelihood that they would become subscribers to her channel.
The quality of the videos that Paula uploaded not only differentiated her from other posters but made it more likely that members of her brand community would share that content with their social circles.
Paula also actively engaged with her audience and demonstrated that she was interested in the feedback that they provided.
Providing personal feedback to questions and creating videos based on viewer feedback signalled her commitment to fostering a fulfilling dialogue with her audience. This created a sense of familiarity and intimacy between the viewer and content provider which kept engagement levels high and generated repeat visits to her YouTube Channel. Connecting with her community was thus vital to increasing the size of her audience.
Another important strategy was her decision to leverage the power of other social networking sites to promote her channel and raise the visibility of her content.
By sharing links to her video on other sites such as Facebook, she increased the chance of the video getting noticed and attracting viewers to her YouTube channel. She also carefully chose descriptions and tags for her videos which made them easier to find when visitors conducted a general search on YouTube for videos on crocheting.
Paula’s success can also be attributed to her use of analytics to better understand her audience and determine what videos were most likely to be well received.
Monitoring the performance of her videos allowed her to tweak the type of video being posted and adjust her marketing strategy to optimise her reach. Attracting new subscribers and viewers was vital to ensuring that she could earn sufficient revenue from her video posts.
A final factor that cannot be overlooked is the passion for her hobby that Paula demonstrated in her videos and the fact that she created an appealing online persona as the star of her home movies.
While the content of her videos could be copied by competitors it would be impossible to replace the personality that was responsible for creating a fun exciting interaction with the audience.
Paula’s previous entrepreneurial experience also was an asset in preparing her for the effort required to turn this new venture into a successful business.
Q2. What strategy should Paula pursue in order to grow the business?
Paula’s goal of converting her YouTube posts into a full time career may be ambitious but is certainly not unrealistic.
A number of strategic options are available to her, each of which has risks as well as potential rewards. Paula has to recognise that while she has a loyal following at the moment, fame is fleeting in the digital world and there are very low barriers to entry for rivals who wish to copy her business model. This should prompt her to select a strategy that not only maintains her existing brand community but also expands her customer base.
One option is to open a physical retail store where viewers of her videos could purchase crochet products. A major challenge posed by this approach would be managing the logistics involved in supplying a global clientele. Issues could also arise in stocking sufficient inventory to ensure an adequate supply of product in the event that local demand picks up.
At present, Paula views crocheting as a hobby but a retail store might quickly strain her ability to supply the market and divert attention from what made her successful in the first place. For these reasons this is not an attractive alternative.
Another option is to provide workshops and individual training to subscribers of her YouTube channel. While this is a natural extension of what Paula currently does online, it would require a considerable investment of time on her part and the concerns about her personal safety cannot be dismissed.
The best option appears for Paula to expand the scope of her videos to encompass other art forms which could complement the ones that she already makes. She could even leverage her previous business foray and create videos about the process of making scented candles. This is an area where she already has the knowledge and skill and would allow her to expand the business at her own pace without requiring significant additional resources.
Eventually, Paula might even be able to transition the new videos to their own YouTube channel and create a second source of revenue.
Ultimately, however, monetising social media requires a ferocious focus on creating high quality content as well as audience engagement. Once Paula overcomes the challenge of getting people to watch her videos, she would be well on her way to achieving her dream of becoming a YouTube star.
Dr Barney Pacheco is a lecturer in the Department of Management Studies at The University of the West Indies, St Augustine