Being the Portal for Mobile Social Networking
It seems like a good idea has really catching on with the mobile operators lately. Last year we saw announcements regarding mobile access to social networking sites on their handsets (see Vodafone and MySpace http://www.vodafone.com/start/media_relations/news/group_press_releases/2007/myspace_launches_exclusive.html) and driving of upgraded data plans to support the accompanying activity (revenue was also initially generated with monthly subscriptions for access, but that quickly went away since there was not exclusivity for the carrier and competition drove the subscriptions to zero). This lead to the next round of innovation to partner on special initiatives like a web 2.0 music offering to increase the mobile operator premium (see Vodafone and MySpace part II http://www.vodafone.com/start/media_relations/news/group_press_releases/2007/vodafone_teams_up.html). Now mobile operators are moving even further beyond the “dumb pipe” and taking more control over the social networking interface. Verizon SocialLife and ATT My Communities have launched respectively to provide a starting aggregation portal to access information from a variety of social networking sites (sorry no Facebook as of this posting). The consumer can still directly go to their favorite social networking portals via a mobile browser or downloadable application, but would have to login to each separately.
I have previously blogged about how Orange UK introducing their version of a similar service in July and how it took control of the customer back from the social networking portal while providing adverting and commerce opportunities for itself. While the mobile operator does not get the rich social graph data (more reading http://en.wikipedia.org/wiki/Social_graph) generated from the interactions with the social networking site (the portals only have a view of the data, but does not own the data). However, I feel this is still a step in the right direction to maintain brand importance in addition to controlling the customer experience.
Is this simply buying time for the mobile operators or can they stay in front of the social networking companies in the battle for consumer brand share? I would welcome your thoughts.
Comments
Hi Jeremy:
What’s your take on the business model for these mobile/normal networking sites.
Is contextual advertising (already in vogue in Orkut and Facebook) the only way ahead or do you foresee a much more sensible business model emerging along with the thousands of widgets/applications emerging for social networking on the net?
TIA!
Posted by: Ashutosh | September 30, 2008 10:54 AM
This topic gets more interesting as we are seeing Social Networking through mobile phones is catching up both with Mobile operators as well as the consumers. I read in a recent survey from eMarketer about Mobile Social Networks in which they have forecasted that over 800 million people worldwide will be participating in a social network via their mobile phones by 2012, up from 82 million in 2007.
As social networking has caught up with so many consumers over the Internet, providing access to those favorite networks through the mobile has the potential to drive up data revenues manifold because of a simple reason that the number of people carrying a mobile phone is very high compared to the number of people connected via a PC.
I think carriers like ATT and Verizon Wireless have taken the right step by providing applications that can connect to multiple social networks rather than providing an application to connect to a specific Social Network. This direction will eventually help the carrier attract many users for their Social Networking applications as consumers, especially in the youth segment, have multiple identities in various social networks. Increased adoption of connecting to social networks through mobiles will help the carriers establish their brand identity and customer loyalty as they have control over the customer experience and serve as a conduit to any social networks the users may connect to.
Posted by: Sandeep Chandrasekar Seshadri | October 3, 2008 05:14 AM
Ashutosh,
Good question. Let me address this on multiple levels.
Ad supported is the most obvious and currently in use. There is some value to the marketer since the group can be a bit better targeted due to the user demographic. The second level of this is using referral marketing from members in the network to other members in the network. Widgets can be used here to pass along “what I recommend” and the referrals can be rewarded by the advertising provider. The next step has been the most controversial which uses information from the network to specifically target users. Facebook’s release of their ad platform was not met with much enthusiasm from the community (however much enthusiasm from the ad agencies). This creates the highest value, but the most risk of alienating the community because you are “monitoring” their friends/associates. An adjacent area of value is to offer sites within the platform to the larger brands which help the brands reach out more effectively into that network or even conduct commerce. All of these models involve some form of advertising or marketing.
The next model with widget or application monetization would mirror how mobile operators or mobile application stores share revenue with their content providers in return for placement on the mobile deck. I see this as a potential model, but it does not seem to have enough traction to generate enough revenue to support your business. Just my opinion.
Posted by: Jeremy Kloubec | October 3, 2008 02:37 PM
Sandeep,
Thank you for contributing the stats from eMarketer. We are getting the benefits of the web 2.0 right here in the blog!
That is an incredible amount of growth. The other important thing to note over that 5-year period is that those youth adopters will be moving into other demographic segments and gaining spending power. It will be important to build a relationship with them early to reap the spending benefits later.
Posted by: Jeremy Kloubec | October 3, 2008 02:43 PM