Mobile Social Networking Aims to Mimic Growth of Wired Nets
If 2007 was the year of social networking, led by Facebook, MySpace and the announcement of Google’s OpenSocial, 2008 promises the emergence of mobile social networking as a mainstream application.
According to a recent report from Current Analysis, Social Networking and the U.S. Mobile Space, the developing market bodes well for wireless carriers who see a new opportunity to increase data revenue.
Analyst projections of a $3-billion social networking market by 2012 have led to a number of partnerships between wireless carriers and social networking companies. A premium mobile version of MySpace is enabled on wireless devices from AT&T, Helio and T-Mobile and has recently launched an ad-supported version for devices on all carriers. Meanwhile, since opening its platform for developers, Facebook has had thousands of Facebook apps launched for mobile devices. Verizon offers a mobile version of YouTube to its users, while numerous smaller social nets have sprung up on various devices.
Currently, most wireless providers require users to pay an additional subscription fee (averaging $4 per month) for each social network they wish to subscribe to via their phone. While this increases average revenue per user, it acts as a drag in the growth of these applications. Ad-supported offerings, such as that from MySpace, should drive adoption.
In addition to subscription fees and advertising, Current Analysis sees a third revenue opportunity for carriers in the ability to package demographic data about users to advertisers for advanced targeting.
Mobile social nets, in some ways, become more attractive advertising venues than their wired counterparts, as advertisers can combine the demographic information from the social network with location-based services on GPS-enabled devices.
The next logical model will be mobile commerce, which is just beginning to emerge today. Mobile users have already shown a propensity to use their devices for purchases of ringtones and wallpapers; new services such as mShopper and ShopText bring the promise of increased m-commerce.
There are many potential pitfalls along the road, however, and mobile carriers will need to be cautious that they do not overload the user with distracting advertising. Mobile advertising has been slow to take hold so far, in part due to the lack of analytics that online advertisers have become accustomed to. “Advertisers that are used to full accountability are left in the dark,” says Farhad Divecha,
Current Analysis encourages carriers to retain a two-tier offering where users who prefer an advertising-free environment can continue to pay for a subscription, while the larger audience gets free access with advertising.
The full report, Mobile Social Networking, Prospects for a Fledgling Industry, is available for purchase.
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