Tom Seery

Tom Seery: On a recent press tour I was confronted by a dour line of questioning that amounted to: “when will the economy knock-off ad-supported Internet companies?” A somewhat rude question given that my company is considered to be part of this class of Web 2.0 ventures funded in the past five or so years.

The focus on all-things-gone-sour was to be expected. For over a year, I’ve seen a growing chorus of reporters seeking economic disaster fodder. But at the risk of incurring a recessionary curse, allow me to offer a contrarian point of view. The down economy is opening up a big opportunity for online publishers who bring social media to a targeted set of professionals.

Who are these professionals?

They are doctors, lawyers, Realtors, piano teachers and any other knowledge-based service provider. Their target customers are extremely information intensive buyers, thus benefit from discussions with experts and in connecting to others who can relate to similar experiences. People considering elective surgery, suing a contractor, or buying a downtown condo often lack familiarity with the purchase process and are making an emotional, expensive, and potentially life-changing decision.

If you were to form a focus group of professionals that want to reach these customers, I’m willing to predict you’d hear the common complaint that blogging feels like a time sink and social networks like Facebook are contextually irrelevant.

The professionals are getting a low return on investment from Yellow page providers. They can’t measure the results from print media ads. And they have found that online lead generators produce poor leads. (One surgeon I know prints out the leads and grades them. His break room walls are adorned with “D” and “F” leads—each one costing him plenty!)

Unlike past downturns, where these professionals could do little to change their fortunes other than dial for dollars or wait for an economic recovery, they’re taking control of their fortunes.

Lawyers, teachers and doctors are rapidly adopting social media sites that are designed to connect them with prospective customers. Local resources for these professionals include Avvo for lawyers, TeachStreet for teachers, Zillow for Realtors, and RealSelf.com for dermatologists and cosmetic surgeons (disclosure: I am the founder of RealSelf).

While there are plenty of reports the downturn is a boon to social media sites, these point to how Twitter and Facebook are a coping mechanism.

Professional use of specialized social media sites is driven by the desire to create authentic lines of communication with potential customers, not to bemoan declining fortunes. Social media sites with purpose, as I call them, are seeing accelerating growth in spite of the current economy.

Traffic at both Avvo and TeachStreet is up over 300% since July. Zillow gets over 40,000 user contributions a day. Doctor postings to RealSelf.com nearly double each month. On top of this recession-driven audience growth, social media sites are so highly targeted, they can tap effectively into the deep supply of direct response advertising offered by Google Adsense.

Reliance on automated contextual ads will give way to direct sales as traffic grows. Higher ad rates will come from the fact these sites offer a trifecta of efficiency: local targeting, trust, and relevance. We've seen this with Zillow, and most recently Avvo. Yet, none of these models are entirely recession proof and advertising in many cases is just part of the equation.

Dave Schappell, the CEO of TeachStreet points out that in his company’s case, “it has long been the goal to offer premium tools to small businesses—think things like credit card payments and more customization of TeachStreet profiles and classes.”

Diversification of revenue streams makes good business sense and helps the entrepreneur sleep just a tad better at night.

As has always been the case, companies that don’t solve problems for their customers will quickly go out of business.

Further, in this downturn follow-on financing won’t be easily attained by those “waiting it out.” My personal familiarity with a social media site with purpose has made me a believer that this is the perfect climate to create tremendous value to vertical audiences.

Tom Seery is the president and founder of RealSelf.com. You can follow him at twitter.com/seery. Opinions expressed in guest posts are those of their authors, and don't necessarily reflect the views of TechFlash or its staff.