Mobile social networking yields 'endless' monetization

More users accessing social networks via mobile devices, offering boundless opportunities for various players to monetize the uptrend, note industry insiders.

The trend of more people using their mobile devices to access social networking sites carries different implications for the various players in the ecosystem--from network operators to device and OS makers, app developers, and businesses. But one thing is clear: leveraging this growing phenomenon by engaging users will throw up "endless" possibilities for monetization by these players in the ecosystem, said analysts.

Egle Mikalajunaite, senior analyst at research2guidance, a mobile research company based in Berlin, told ZDNet Asia in an e-mail interview that people are increasingly connecting to social networks via mobile devices--in particular, handsets.

Similarly, an ABI report published Jul. 15 stated that nearly three quarters of mobile phone users in the United States use their handsets to visit social networking sites daily.

According to Mikalajunaite, social networking on the mobile brings out a "completely different level of [user] engagement". Consumers use their devices to find and share information with one another, and also become comfortable being exposed to mobile advertising.

For various parties in the mobile value chain, what this increasing trend of mobile social networking means is monetization opportunities by focusing on users--and the possibilities of doing so are "endless", she noted.

However, there is "no one magic formula" on how to benefit from this trend and the extent of monetization depends solely on the creativity of the interested party, she added. That said, she advised businesses to not ignore the smartphone as part of their own mobile strategy.

Mobile operators: Seamless connectivity
Daryl Chiam, Singapore-based principal analyst at Canalys, told ZDNet Asia in an e-mail that the increasing trend of consumers accessing social networks on their mobile devices clearly means more pressure on mobile network operators. But this also brings an opportunity for them to increase data ARPU (average revenue per user).

For emerging markets where there is lower mobile penetration, carriers are already taking advantage of the popularity of social networks to enhance customer loyalty in the low-end device segment. They do this by offering free access to the basic Facebook 0 site or selling prepaid data access to social networks, he explained.

Operators can also upsell to customers with heavy data consumption higher-end smartphones or more expensive data plans, Chiam added.

Mikalajunaite similarly stated that apart from just preloading a package of apps or offer their own appstore, operators should also embrace the surge in data traffic of mobile apps and social networks by working to provide customers with seamless Web connectivity.

Ivan Lim, M1's deputy director of corporate communications and investor relations, said the telco views the rise of mobile social networking as positive, since the company has added opportunities in expanding the take-up of its mobile data plans and growing mobile data revenue. He added in his e-mail that M1's launch of Long Term Evolution (LTE) network in June 2011 would cater to customers' increasing data usage and demands in a faster, more efficient manner compared to HSPA (high-speed packet access).

"Alongside the introduction of attractive tariff plans, we do foresee a continual growth in customers' adoption of use going forward, which will have a positive impact on ARPU," he said.

Mobile device and OS makers: Seamless integration
Mikalajunaite emphasized that when it comes to devices, making access to mobile social networking as seamless as possible is key. She argued that it is essentially a software issue, rather building phones with social media buttons.

"Keep in mind that a significant majority of smartphones are touch screen [devices], so such a Facebook button would merely be the same icon people already have in their menus," she pointed out. "Manufacturers can place any button on the device, but the actual function of it is software-driven."

She added that if there is such a button, there must be a "systematic solution on how to actually integrate it seamlessly and rationally into the user interface, to make tasks as easy as possible".

To that end, there must be better dialog between original equipment manufacturers (OEMs) and OS providers to avoid situations where the mobile device cannot leverage some of the OS features such as low-processing power, she noted.

That said, Chiam pointed out that mobile device vendors have been tuning in to the social networking trend for some time to increase their outreach to consumers. For instance, HTC launched in June the HTC ChaCha and HTC Salsa, which have dedicated Facebook buttons. In addition, INQ offers phones integrated with Facebook and other social networking clients, while Apple's iOS 5 update has Twitter integration, he said.

But it is no longer a matter of "simply pre-bundling a social networking client on to the device", he noted. The social network features and capabilities must be well-integrated into the device user experience, such as a single sign-on to eliminate the need for repeated logins.

Darren Sng, senior director for Asia product marketing at HTC, said in an e-mail its "socially-connected phones" ChaCha and Salsa offer new ways for users to experience Facebook on mobile devices. The dedicated Facebook button is meant for ease-of-use, with a one-touch access to the key functions of Facebook that is already integrated throughout the entire user experience, he added in an e-mail.

Brands and app developers: Stickiness and loyalty
Amid an increasingly competitive mobile app landscape, social network integration is a definite way to significantly increase app stickiness and usage and also creates a more conducive environment for mobile advertising, according to Mikalajunaite.

For brands, the mobile platform increases the importance of using social media to engage with customers, she added. Customers are turning to social networks on their mobile devices to browse and share information when on deciding or making purchases, so besides brand-centric mobile apps, businesses can also have branded mobile social networking accounts for easier access, she suggested.

Mobile app developer and CEO of Stream Media, Chua Zi Yong, said that the mobile social networking trend is a sign that mobile devices are now integrated into people's lives. They have become comfortable not only in consuming information and services, but also creating content such as posting on Facebook and sending tweets via their mobile devices. This makes it much easier for developers to create use cases that could end up being widely adopted.

Developers, he noted in his e-mail, can create services that either are tightly integrated with a social network or complement it, such as photo-sharing app Instagram and newsfeed management app Flipboard.

They should also take advantage of mobile social networks to increase viral distribution and again more users, Chua added.

Chiam also advised both mobile app developers and brands to consider how their apps relate to social networks as well as ensure the app user experience is well-integrated with relevant social networks, especially when it comes to consumer-related applications. Integration done well can foster stickiness and user loyalty, and attract new customers as users are more likely to promote the app or product within their social circles.


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