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Increasing Interest in Social Networking on Mobile Phones

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The concept of using social networking websites from a mobile phone is fast catching on in the USA, as all tier I and tier II operators now offer social networking applications. Support from mobile operators expects to directly impact application discoverability, provide marketing support, and drive growth in the U.S. mobile social networking markets.

New analysis from Frost & Sullivan finds that revenue from on-deck mobile social networking services in the U.S. expect to reach $ 412 million in 2012. Additional revenues can also be expected from mobile advertising.

"While the extension of popular online social networking communities onto mobile phones is a major growth driver, it is unreasonable to expect the same level of functionality as is offered through the PC," notes Frost & Sullivan Senior Analyst Vikrant Gandhi. "Mobile social networking services clearly need to be targeted toward mass-market phones in order to gain traction."

Mobile social networking represents an additional monetization opportunity for the mobile communication value chain participants. The convergence of three main trends- emergence of popular social networking services on the Internet, increasing penetration of the mobile web, and emergence of mobile advertising- drives mobile social networking.

For example, popular online mobile social networking services such as Facebook, MySpace, and several others are now accessible through the mobile Internet - penetration of which is at the 15 percent levels. Similarly, mobile advertising has emerged as the prime revenue model for off-deck mobile social networking providers.

The challenge, however, is to develop dedicated and effective mobile advertising models to deliver targeted advertising to the mobile social community. This would require a close cooperation between advertising solution providers, mobile social networking solution providers, mobile operators; as well as willingness of the subscribers to share more data about themselves.

"For instance, the present cost per thousand for mobile advertising within mobile social networking services is not very high," says Gandhi. "Similarly, the fill rates or the ability to monetize the available inventory are also low."

The industry needs to take a balanced approach in this regard. For example, it will hurt in the long run if key industry participants over hype the monetization potential of mobile social networking services. Advertising should also be immersive, simply displaying banner ads within mobile social networking sessions may not be enough.

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Tags: social networking  mobile advertising