Here’s the dilemma: You want to create a great new site or community and need to figure out if you should create your own social media platform at considerable expense, but customized exactly as you’d like or spend far less and build off someone else’s platform with less flexibility?

The answer is: it depends.

In fact, there are quite a few factors you need to consider and recent news makes this even more timely and your decision more complex.

What recent news?

First comes from Ning. What was previously a free, ad-supported service for most will now change to only offer paid accounts. If you had a free community hosted on Ning, you won’t starting in July (here’s the announcement from Ning). So, if you built your community on Ning thinking that it wouldn’t cost you anything to host it and you could avoid the big fees to develop the same applications Ning offered for fee, you’re in a tough spot. Ning’s most robust package is $499 per year. To be sure, this isn’t going to bankrupt a pharma brand that might have chosen to use Ning, but it’s going to kill a bunch of smaller communities. While it’s only $499 for now, what if Ning changes this to $499 per month or week? What if they kill a bunch of features that you rely on, but they think people don’t care about? You have no recourse and your community that you spent so much time, effort, and money to build could disappear overnight.

What if your platform (or even entire company) is completely reliant on another for its success? Take the thousands of applications that were created to help people use Twitter in different ways. Without the Twitter API and data, these applications are useless. I’m looking at platforms like Tweetdeck and Seesmic and services like Twitpic. Twitter can decide to kill any of these companies overnight. Don’t think so? Just ask the people at Tiny URL. This used to be the default URL shortening service for Twitter before Twitter decided to switch to bit.ly. Great news for bit.ly, terrible news for Tiny URL. However, bit.ly should have seen the writing on the wall, as Twitter announced that it’ll be using its own shortening service in the future, t.co. In fact, this shortening will replace any link including those shortened by other services. That’s the end of the road for bit.ly.

Maybe tomorrow Facebook will announce something that completely changes the way you can create and use Pages for your brands. Maybe they eliminate the role of “Admin” and allow anyone to post on any Wall (and there’s no way to turn it off). I’m thinking that would be the end of pharma efforts on Facebook.

Of course, Facebook hasn’t done anything like this yet, but you never know. There’s always a risk in relying on someone else’s platform to house your critical marketing efforts. However, there are also good reasons for doing it this way too. Here are some reasons why you might want to use a third-party’s platform:

• Cost – Considerably less than developing yourself
• Speed to market – Launch tomorrow instead of next year
• Established users – No need to attract people to, say, Facebook, they’re already there. You just need to get them to your Page instead of promoting an entirely new site or platform no one has ever heard of
• Bug-free (ish) – Any newly created platform is going to have technical problems, but these have all been worked out on an established platform. This also means you can spend less time and resources monitoring the site to make sure it’s working right.
• “Findability” – Not a real word, but a real thing. Search engines will sooner (and more generously) index your site on third-party platforms (in most cases) making it more visible, more quickly in search results than building from scratch.

On the other hand, there are also reasons not to use a third-party’s platform and build your own:

• Customization – You’re only limited by your imagination (and budget) with what you can create and how it looks
• Control – Need a specific feature? Just create it. You can’t add whatever features you want to third-party platforms (if you could, you would be able to pre-moderate comments on Facebook’s Wall, right?)
• Ownership – The site/platform exists forever (or as long as you want). No one can take it away, remove it for violations of terms of service, change the rules of what you can or can’t do, etc. Another key part is that you own the data including critical pieces of information like user contact information (emails, addresses, etc.). On Facebook, for example, you don’t own any of this and can’t use or retain it for any reason.
• Auditing and legal – It’s much easier to be compliant with every legal obligation a major corporation is subject to when you build something yourself. From controlling PII to Sarbanes-Oxley,  you can manage it all on your terms.

So, which is the right answer? Again, my answer is: it depends.

One thing you can consider is doing both. That is, you can start with a third-party platform and then, if successful, move to one you create yourself. There’s nothing worse than investing millions in a platform or community that no one joins. Instead, for example, start with a relatively “free” platform like Ning and if there’s a big interest, start building your own. The plus side of this is that you never waste your money on something that simply won’t work. The downside is that you have to try to move members from one platform to another when your new one is ready, which may be difficult.

To figure out which is right for you, try this simple quiz. Answer yes or no and see the scoring at the end to determine which is right for you.

1. Do you have a substantial, dedicated budget for this project (>$100k)?
2. Are there specific features that are absolutely essential to this site/community that don’t exist elsewhere?
3. Have you had difficulty in getting approval to use third-party platforms in the past (such as Facebook) for similar efforts?
4. Is this a “2.0″ version of a site/community you already control with established members (versus being built from scratch with no members)?
5. Do you have internal (or other dedicated) resources to monitor the ongoing functionality and features of the site/community?
6. Do you have a promotional budget to drive awareness of the site/platform to increase membership?

If you answered “yes” to most of these questions, then building from scratch might be for you. If you answered “no” to most, then you might be able to leverage an existing, third-party platform. There are no hard and fast rules, so it’s a case by case basis. However, the wrong answer is a knee-jerk decision on one or the other. In many cases, what I see is that the default is to build without any consideration for the third-party option. Give each proper consideration.

Need some specific advice, feel free to contact me.

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