The next big trend for social networking is the rise of the mobile social network. Gen Y’s cell phone addiction has given way to a proliferation of these mobile networks, each one trying to be the MySpace of the mobile web. The number of users on these services is growing fast – in fact, a new study by InStat is predicting that by 2012, there will be nearly 30 million “millennials” in the U.S. using a mobile social network of some sort, and a ComputerWorld report confirms that worldwide, that number will soar to 975 million by 2012.
While these numbers seem to point to a vast, untapped market where there’s great potential for financial success, businesses wanting to enter this space need to be savvy. On mobile social networks, adoption rates may high, but the problem here isn’t in finding users – it’s finding a way to make money.
According to Jill Meyers, an In-Stat analyst, “there are three primary methods of revenue generation for mobile social networking applications– advertising, subscription services, and premium upgrades.”
Although the subscription services and premium upgrades may work for some of these networks if what they offer is truly high-quality or unique, the businesses that choose to support themselves with ad revenue instead may have the most luck. It appears their customers won’t mind, either – so long as the ads help subsidize the cost of the service.
Another study, this one by U.K.-based Mobixell Networks, showed the possibilities for growth in the area of ad-supported mobile social networks. They reported that 35% of 16-35 year-olds would use more ad-funded multimedia messaging services (MMS), if those were offered for free or at a discount and 29% would use more video services. The demand is there – now it’s just a matter of businesses finding the right balance of ads and content.
Even though mobile advertising is still in an experimental phase at this point, the revenues generated in 2008 are predicated to be over $1.5 billion. By 2011, it’s reported that number could be closer to $150 billion.
The mobile social network industry is certainly one we should all be watching. If you want to check out some of the more promising mobile social networks, go here to read a review of four of our favorites.
Mobile Networks image, courtesy of Rudy De Waele’s presentation given at the Plugg Conference.
