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“If you talked to people the way advertisers talked to people, they’d probably punch you in the face” is a phrase that seems to accurately sum up the differences in format and etiquette when it comes to advertising to consumers across personalised platforms like the mobile phone or social media networks. Get the message wrong and you can cause considerable offence and probably lose community members, but get it right and the rewards could be enormous.
On the face of it mobile advertising and social networking appear two distinct areas of the new media landscape, however, there is an undoubted sweet-spot lying between them which companies are now looking to exploit in more and more innovative ways. This is why Bango has decided to sponsor AIME’s next Knowledge & Networking Seminar about Mobile Advertising and the Impact of Social Networking early next month and supporting the opportunity to learn from key industry visionaries as well as networking over drinks.
“The business model for social networking is predicated on advertising but is it a happy marriage?” asks Anil Malhotra, SVP Global Alliances and co-founder of Bango. “It appears as if mobile social networking is moving more quickly into both ad-funded and premium level services compared to their PC-Internet cousins. There are some key reasons for this, not least greater personalisation, but also because it’s easier to pay via mobile phones.”
The web’s big social networks have gone mobile, taking millions of users with them. But it’s the ‘pure’ mobile communities that are driving all the innovation.
Matt Dicks, Commercial Director for Flirtomatic, says his approach to mobile advertising is about marketing entertainment and content services as part of its mobile social network.
“It’s about integrating ads and brands into the fabric of a social networking service – enabling premium gifting between users and using advertising to support content,” says Dicks.
With contributions from top analysts such as MSearchGroove’s Peggy Salz, as well as industry insights from companies like Flirtomatic, Bango, Inside Mobile and the GSMA, this seminar takes a timely review of the reality of the mobile advertising marketplace and the impact that social networking is having.
The seminar will also take a close look at the situation now and how things have improved in the value chain, making cross-platform integration of campaigns a viable proposition for brands, agencies and content providers. Presentations will also take a look at the delivery of key metrics from the market and examine the impact of initiatives from both Service Providers and MNOs to improve the measurability of mobile advertising.
Even though the likes of Facebook, Bebo etc. are now targeting mobile and with no little success in terms of traffic and PR, one gets the impression that the real creativity is still occurring among the pure plays many assumed they would squish. However, it has been shown that if you have a large enough and strong enough community, you can offer targeted campaigns with valuable results.
You can see where this is going: ad revenue is nice, but augment it with a Google-style auction for placement and the ability to do micro-transactions and a compelling new revenue stream is opened.
Impressively, Flirtomatic’s revenue grew four times last year, with a 55 per cent rise in ARPU. The firm is active in the UK, US and Germany. This activity suggests the market is now at a tipping point and big web companies like Zed and Buongiorno are tweaking their business models accordingly. Buongiorno will monetise its Blinko mobile advertising platform by sharing data revenue with operators, advertising and selling premium content. It’s very similar to the strategy of Zed, which pioneered the social media concept on mobile with its Zed Station concept in 2007.
“The focus is on making mobile social networking sites interesting and valuable by offering new content and collecting the data,” says Bango’s Malhotra. “We’re concentrating on providing the relevant CRM tools to help service providers meet brand advertiser objectives and enrich the understanding of these two powerful channels.”
Nick Lane, Chief Analyst at D2Mobile and author of a report on mobile social networking says: “‘Free’ opens the door for ad-funded services; however, to truly captivate advertisers, service providers must provide Meta data in addition to traffic. But, while some pureplays do collect such information, the data provided by web stalwarts like Facebook and MySpace is limited at best.”
This is keeping a very low ceiling within PC-based social networking sites - generally less than $5 – on the CPMs that advertisers are prepared to invest, though there are examples of higher rates on more targeted offerings, adds Lane. Either way, social networking site traffic is growing at an exponential rate. According to the comScore World Metrix, 580.5 million internet users (aged 15 years and older) network socially on the internet.
As of June 2008, Facebook had 132.1 million users, with MySpace at 114 million. Both are expanding fast into mobile, with the MySpace wireless base at approximately nine million in the US alone. That equates to 12 per cent of its US online user base (73 million).
But if MySpace can eventually encourage 20 per cent of its PC-based followers to embrace mobile as a complement to their PC-based experience, that would equate to 14.6 million US mobile users.
Facebook has an even larger audience. Then there are the likes of Bebo and YouTube and numerous others around the world too plentiful to mention. If the mobile industry can entice half of all social networkers on to mobile, it would connect with over 290 million users – equal to the population of the US.
The revenue possibilities are even more exciting. 290 million people paying a $3 per month subscription would generate $10.4 billion per year. Or $7.92 billion based on an ad-funded free model with a CPM of US$3 on an average of 25 page impressions per user per day. However you approach it, there is a vast untapped market just needing that little incentive to make the leap ‘over the air’.
The mobile industry has long been focused on unlocking those users who only use their device for voice and messaging. Perhaps it’s been looking in the wrong place.
There’s an army of potential mobile data users out there. They can be simply reached by typing www.facebook.com or www.myspace.com into any PC.
For more information about the AIME seminar and full speaker line up, please visit: www.aimelink.org/KN/MobAdvSocNet.aspx
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