Here at Keplar some of our recent advisory work has been for online community sites, helping them to improve their customer proposition while also growing their revenues. In the course of these projects we have started to develop a new technique for guiding the development of these sites which we call “value chain mapping” – a technique that works to improve the way community sites serve their community whilst simultaneously growing their revenue. This blog post aims to explain this technique – articulating the theory but also providing practical advice for owners of social networks. (None of the companies mentioned in this post are current or past clients of Keplar.)

Vertical social networks: a primer

For this post we focus on “vertical” social networks – these are simply community-oriented websites which focus on one content area, interest group or demographic. We use the word vertical to distinguish these community sites from general-purpose social networks such as Facebook and Bebo. For this post we use Mumsnet, the UK website “by parents for parents”, as our main example.

So, what does a vertical social network look like? Typically these sites provide their user community with a set of “soft tools” such as forums, profiles and articles, all designed to support the site’s users in socialising, sharing knowledge and fulfilling specific needs. On Mumsnet, those user needs would include childminding, keeping their child healthy, and finding a kindergarten.

On the monetisation side, vertical social networks generate most of their revenues through advertising – showing users targeted or general banner ads but also directing users towards relevant businesses for a fee (see for example the Mumsnet Mall). It’s a delicate balancing act for the site owners as communities respond badly to advertising which they deem excessive, irrelevant or dishonest.

So, what’s wrong with this model?

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