Thoughts on monetizing an established online community
First, a little backstory
In 2008, when I was about 15 years old, I was obsessed with The Sims games. So obsessed that I actively participated in a number of fan communities, which were typically structured as forums or primitive social networks.
One of the larger fansites at the time—Insimenator—had suffered from operational issues for years. It had been run as a non-profit and funded with voluntary donations from members, until one day, the owners of the site (unbeknownst to the dedicated community) decided to sell the site.
It was purchased by an ‘online marketer’ named Walt. Walt was not a member of the site, had never played The Sims, knew nothing of the community or its politics, and lacked the technical capabilities necessary to run such a high-traffic site.
The first thing Walt did after buying the site was announce his plan to turn the community into a profitable venture. The Insimenator community was broadly opposed to any attempt to implement paywalls, feeling that it would be exclusionary to the site’s younger and less-financially-secure members.
Walt’s announcement was (as anyone except Walt could have predicated) met with fierce opposition. Users revolted and left the community en masse, and within a few days the site had been hacked, cloned, and re-launched on a new domain. Walt lost thousands of dollars and ended up with nothing but an empty husk of a forum.
The full blow-by-blow story can be found here.
Why am I telling you this?
I was reminded of this saga last year, when I made the decision to buy a forum. Aussie Finch Forum has been a fixture of the Australian bird keeping community for over a decade, but has been slowly declining as discussions moved towards social networking sites like Facebook and Reddit.
Nevertheless, Aussie Finch Forum has a loyal band of forum regulars who preferred its format over alternative discussion mediums. To grow the site it needed to appeal to a wider range of users, while still preserving what makes it loved by the current members.
I’m almost a year into the challenge of growing (and monetizing) Aussie Finch Forum, and I’ve enjoyed modest success. The site’s traffic figures are showing small improvements, and the revenue is starting is trickle in.
I’ve put together a collection of thoughts exploring why my attempt at monetizing a community has been so much more successful than Walt’s attempt to take over Insimenator.
How to implement changes without pissing off users
Continuity (with change)
“Continuity with change” is a political campaign slogan from the television show Veep, which was purposefully written to be self-contradictory and ultimately meaningless. (Fun fact: The Australian Liberal party later co-opted the slogan in their re-election campaign.)
The contradictory nature of the slogan does aptly describe what it’s like taking over an established community. The people who form that community are—like most humans—change averse and don’t want to see their online home wrecked by capitalistic greed. They want continuity.
Generally speaking, a community that finds itself under new management typically ended up there because of a significant issue with the status quo. The current owner may not have the money, time, or knowledge to run the website, and so they’re forced to pass it on. Change is needed.
Take it slow
People don’t deal with change very well, so it’s important to tread carefully. Monetizing a previously un-monetized community can easily flare tempers, so build up to it slowly.
After acquisition, Aussie Finch Forum didn’t show its first ad for six months, and ads are still hidden to registered users. It was nine months before a “member deals” page selling merchandise appeared.
Don’t be exclusionary
Don’t make changes that make it impossible for a certain part of the community to participate. If the community is geared towards kids or low-income earners, stay away from paywalls.
The company formerly known as Yahoo is making this mistake with Tumblr, which they purchased several years ago. In pursuit of ad revenue from family-friendly brands, they decided to entirely ban adult content across the platform. The service is now, predictably, suffering a slow and painful decline as users—even those uninterested in adult content—are choosing to take their business elsewhere.
Provide real value to the community
As mentioned previously, a community that suddenly has new leadership and an urgent need to monetize probably has some significant issues. The website hosting might be slow and inadequate, the software powering the site could be riddled with bugs, or the community could be struggling to fend off a deluge of spammers and trolls.
Fix these problems, immediately. Nothing builds goodwill like making the community objectively better right off the bat.
Care about the community
Walt’s effort to monetize Insimenator went so badly in part because he didn’t really give a shit about the community. He saw it as little more than a market to tap, rather than something to be nurtured and protected.
I think part of the reason my acquisition of Aussie Finch Forum is trending towards success is because the continuation of the site is really important to me personally. Finch keeping is a hobby that I enjoy. I’ve made friends and useful contact through my participation there. Keeping it going strong is ultimately more important to me than making money.
Be clear about what’s happening and why. People appreciate honesty and transparency and it goes a long way in building trust.
If you’re new to the community, one of the best things you can do is have the former owners introduce you and announce the change in leadership.
Ways to generate revenue from an online community
Advertising and sponsorships
Ads can produce consistent income, but they’re usually really ugly. A website with too many advertisements starts to look more like a tacky billboard than an inviting community.
On Aussie Finch Forum, the only ad shown is a single Adsense banner that’s only visible for logged-out users viewing a discussion thread they found through Google Search.
A beloved community is often able to cover maintenance costs by sourcing the funds from members. Relying on donations can be tricky, because they depend wholly on the goodwill of the community. If the community doesn’t yet trust you (because you’re a new owner), convincing them to part with their hard-earned money is going to prove challenging.
If the community was previously free to participate in, adding a paywall will almost certainly kill it. It could potentially work if the subscription is wholly optional and doesn’t exclude a portion of the community. This could be accomplished by offering subscriber-only perks like no-ads or special recognition.
Merchandise and eCommerce
This is the most difficult way to monetize a community, because it involves all the same work as starting an eCommerce business. You need software to handle transactions, PayPal/credit card merchant accounts, product suppliers, shipping & dispatch procedures, etc.
eCommerce is my primary monetization strategy for Aussie Finch Forum, however it’s being funneled through another site I own (Aviculture Hub) rather than conducted directly on the forum. This is mostly for technical reasons, as I expected that integrating an online store with PHPBB would be a near-impossible task.