A new invitation-only social networking site hopes to profit by letting marketers reach its young, professional members.
SmallPlanet.net, billed by its CEO as a sort of online AARP for the 18-to-35 set, snapped up more than 1,500 members and seven marketing partners since its soft launch Mar.10.
Social networking sites are one of the most talked-about current trends, with a flurry of deals taking place in early March. The issue remains as to how these sites are going to make money, with different models and plans being attempted. For example, Tribe.net, a networking site with a classifieds model, partnered with CareerBuilder.com to give consumers access to job listings earlier this month.
L.A.-based SmallPlanet.net plans to address this issue by letting marketers offer its members discounts on goods and services such as gym memberships, car insurance, health insurance and other such items, according to CEO Hunter Heaney.
“The providers get business at an extremely low acquisition cost, we get a percentage and our members get a great deal,” sand Heaney.
The site caters to young professionals in the 18-to-35-year-old demographic, who find themselves faced with inordinately high car insurance rates and, often, difficulty finding health insurance, Heaney said. This follows the model of organizations such as the AARP or AAA, which offer group discounts to their members.
Members vote on the site as to what goods and services they want, and the company then finds marketers interested in reaching the group and posts the relevant information on the site. The invitation-only site is free to members, who were initially seeded by friends and associates of its three founders, all of whom fit the age demographic. Heaney’s partners are Diego Reyes and Gabriel Weinert.
“The idea is that if everybody’s invited in by someone else you have a better-quality network. We won’t grow as quickly, but it’s more important to have loyal members,” Heaney said.
In its first week, SmallPlanet.net has negotiated discount contracts with six L.A. gyms, including the upscale Sports Club and Bodies in Motion, for its members. The L.A. office of Andreini Insurance Company also signed a contract.
The meat and potatoes income will come from national providers such as credit card companies, insurance companies and manufacturers of the high-end, cutting edge technologies such as camera phones and music delivery systems beloved by this demographic, Heaney said.
Though ads have a strong presence on many social networking sites, including Friendster and Myspace.com, Heaney said SmallPlanet would accept no advertising.
“We want to find providers who will offer fair and honest deals. We don’t want to seem like we’re influenced by what companies might spend in terms of advertising dollars,” Heaney said.
Nate Elliott, associate analyst with Jupiter Research, which shares a parent with this publication, says it’s a creative idea. “Most social networking sites are looking to create revenue through advertising, which would be a difficult way to build a business, or dating, which won’t work,” he said. “They’re looking at a different idea of making money and that clearly is a first step.”
Businesses near ‘PokeStops’ are enjoying a huge surge in footfall due to the popularity of Pokémon Go, according to our first major ... read more
A new organization, The Coalition for Better Ads, has been launched to “leverage consumer insights and cross-industry expertise to develop and implement ... read more