Chapter 8.8, Problem 8.4ARQ

Explanation of Solution

Monetize:

Monetize is defined as to convert non-revenue creating moneys into source of revenue. In economic terms, monetize is to change any objects or events into a form of currency.

Reason for generate revenue is difficult for social media:

The users expect to use social media applications with free of cost. The social media companies need to build up a big network of users rapidly, but they have to suggest a free product in order to attract users. So, the social media companies have a dilemma to how do they make money from their service, or applications.

Example revenue models for social media:

• Social media companies generate revenue in two ways that is advertising and charging for premium services.
• For example, Facebook, Instagram are creating a company pages as free of cost, but they charges a fee to advertise to communities that pages.
• Google gets revenue in making digital advertising revenue with search like searching Gmail and YouTube.

Pay-per-click:

• Pay-per-click is an internet advertising model which is used to advertiser pays money to the publisher when the advertisement is clicked.
• The publisher gets money when every time an ad is clicked.
• It is used to assess the cost efficiency and productivity of internet marketing. Every click is a way to measure interest and attention.

Conversion rate:

• Conversion rate measures the percentage of the users who visit the website and complete a transaction out of total number of users.
• Simply a conversion rate is number of users who have completed a desired goal divided by the total number of website users.

Freemium:

• Freemium is a combination of “free” and “premium”...