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The Hard Truths About the Fast Rise of Ello The newest social network is all the rage, but not a real threat to Facebook.

By Jason Falls Edited by Dan Bova

Opinions expressed by Entrepreneur contributors are their own.

It seems as if every story or headline about upstart social network Ello has some sort of declaration that it's a Facebook killer or people are "leaving Facebook for Ello."

Nothing could be farther from reality.

Ello, until recently a sort of top-secret social networking project headed by art- and design-centric entrepreneur Paul Budnitz, has exploded on the relevance scene in the last two weeks riding the tails of the promise of an advertising-free social network experience. According to Budnitz, the network launched to open beta on Aug. 9 with 90 users and are averaging about 31,000 new sign-ups per hour since.

There are invites for sale on Ebay. Seriously.

Related: Fast-Growing Ello a Facebook Killer? Not So Fast.

"There's no finger to be placed on what caused the explosion," Budnitz says. "It's a nice combination of word of mouth, influencers trying the network, media coverage and the veil of exclusivity since you have to be invited. It's worked quite nicely."

The Internet and content-marketing lemmings have popped off dozens of posts already discussing how Ello is relevant for your business, how it's the new Facebook and perhaps the "next big thing." Even I got nauseous reading through some of them, and I generally just skim.

But there's relevance to the platform and thus, we need a gut-check on Ello and what you need to know about it.

Ello is not replacing Facebook. One article I came across actually said, and I quote, "Flocks of people are moving from Facebook to Ello." It took me several minutes to stop laughing. I know as soon as I got my invite, I shut down the social network I'd spent years building connections upon. Heh.

Actually, people are signing up to try Ello. Only time will tell if its utility surpasses that of the primary social network for most living beings. Ello's interface is different, but the core features it offers -- follow, be followed, post and engage in threaded conversations -- is offered by nearly every social network on the planet. Until the network can illustrate it offers the same or better utility for users -- including brands -- it will always be at least second.

Ello isn't trying to become the next Facebook. "We are not trying to compete with Facebook," Budnitz says. "We see Facebook as an advertising platform. We see Ello as a social network."

OK, but that's not altogether accurate. Facebook is a social network that has over-laid an advertising platform on it to monetize. Ello just doesn't have a monetization play that is obvious to users yet.

According to Budnitz's statements in other media, the company plans to offer more advanced features in an a la carte fashion. You want to add a Google Hangout-like experience? Pay for it. Organize friends into lists or have multiple users with access to one account? Pay for it. If you want to just have your social network basics, it's free.

Related: Hot New Social Network Ello Knocked Out By Cyber Attack... Already

Ello can and will exist along side Facebook, Twitter, LinkedIn, SnapChat, Path and a multitude of other channels users can choose from. If user data has told us anything, it's that for most people's social-networking activities, it's Facebook and, not Facebook or.

Users don't mind advertisements. It is categorically incorrect to assume that all consumers hate advertising. If they did, the average click-through rate would be 0 percent. It's not.

While some pay-per-click rates do hover in the hundredths of a percent range, many advertisements -- especially social advertisements constructed with relevancy in mind and well targeted -- can climb into the double-digits.

A recent Facebook sponsored post from a client of mine drove 27,000 people to click and interact. It cost about $2 per interaction and each netted the client about $35 per in revenue. So people not only don't mind ads, if done well, they'll click and give you their money, too.

In Edison Research's Social Habit surveys (disclosure: I was an editorial partner for the studies) of 2012, 47 percent of respondents said Facebook was the one social network that influenced their buying decisions the most.

The business model is questionable. Ello deserves credit for coming up with a new way to monetize a social network. The pay-per-advanced-feature approach while leaving the basic communications model free is admirable, but will it prove successful? The company has taken on venture capital ($435,000 in seed money from FreshTracks Capital, according to CrunchBase).

The pay-per-feature plan has to work, or the company is left to sell user data or real estate on the screen. The hope -- even mine -- is the plan will work and enough users will pay to support growth. But at some point, they won't support it enough for growth rates to please investors. That doesn't mean it's destined to fail, but you can't have billion-dollar valuations if you're not willing to monetize that massive user base.

Related: Facebook Clamps Down on 'Clickbait'

That brings us back to the core question: Will users pay for features they get free elsewhere? If I had to guess, I'd say not enough will. But, only time will tell.

The key takeaways. Brands can request invitations to Ello just as anyone else can. I've found a handful of companies -- publishing and otherwise -- already there. (See @castiron, @armitageandmcmillan and founder Budnitz's @budnitzbicycles.) Certainly, the early adopter set is tech-market centric and heavy on design and aesthetics. That will evolve to a more mainstream set. Maybe even your brand can find a niche there.

The early brand play is the old school Facebook one -- share good content and engage with your audience there. Know they may already engage with you elsewhere so duplicating your content may hurt more than help. Listen to the Ello community and see what it is they find useful from you.

And if I had to guess, the site itself may not slap you on the wrist for having a sales mentality, but your followers and fans will. The adopters of Ello will be people seeking a respite from brand bullhorns. Don't be one or you'll be placed on everyone's "Noise" list. That's probably going to be as bad as having your private messages wind up in Facebook's "Other" inbox. No one will see you.

But the biggest takeaway needs to be this: Don't think for a minute that people are moving to Ello and giving up other channels. The network has a long way to go to be the next big thing. And even at that, without a solid play for brands, it won't ever be that anyway.

Giving up your efforts on Facebook, Twitter, LinkedIn or even traditional channels to focus on a network built to avoid brands is social-marketing suicide. Play there if you like. But keep the engines running elsewhere.

Related: How to Build a Strong Social-Media Presence

Jason Falls

Entrepreneur Leadership Network® VIP

Digital Strategist, Industry Analyst, Speaker, Author

Jason Falls is a noted author, speaker and influencer in the social and digital marketing space. He is the senior influence strategist at Cornett, an advertising agency in Lexington, KY. He is the author of three books on digital marketing, including Winfluence — Reframing Influencer Marketing to Ignite Your Brand, from Entrepreneur Press. 

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