Social Networking Going Mobile, Nielsen Finds

By Jason

A growing number of mobile phone subscribers worldwide are taking online social networking to the streets, research conducted by The Nielsen Company reveals. The findings, released by Nielsen Mobile, a service of The Nielsen Company, show that the U.K. leads Europe in mobile social networking on a percentage basis -- with the U.S. boasting comparable numbers.

In the U.K., approximately 810,000 mobile subscribers, or 1.7 percent of all mobile subscribers in the country, visited social networking websites on their mobile phones in the first quarter of 2008. That reach percentage was twice as high as it was in other major European markets-though similar to the U.S., where 1.6 percent of all mobile subscribers (4.1 million in all) accessed social networks via their phones in December 2007. For more details on mobile social networking access by country, see the chart below.

Mobile Social Networking Reach - US and Europe

% of mobile subscribers who Number of mobile subscribersaccess social networks over who access social networks the mobile Internet per month, over their phone

United States - 1.6% -- 4,079,000
United Kingdom -- 1.7% -- 812,000
Italy -- 0.6% -- 293,000
Spain -- 0.8% -- 291,000
France -- 0.6% -- 255,000
Germany -- 0.2% -- 141,000

Source: Nielsen Mobile; EU data Q1 2008, US data December 2007.


Leading PC Social Networking Sites are Also Tops Over Phones

In the U.S., MySpace.com, the leading social networking site among PC users is also the most popular mobile Internet social networking site. The site logged 2.8 million unique mobile users in December 2007. Also in December, Facebook, which has the second largest audience among social networking sites, had 1.8 million unique mobile users. In contrast, Facebook led mobile social networking sites in the U.K. with 557,000 unique mobile users per month in Q1 2008, while MySpace followed with 211,000 unique mobile users. While Facebook and MySpace.com were also among the top social networking sites in other European countries during the first quarter of 2008, MSN's Windows Live Spaces led in Italy (154,000 unique mobile users per month) and France (106,000), and ranked second in Germany (45,000) behind MySpace, which boasted 52,000 unique mobile users per month.

"Social networking is already a global phenomenon, and going mobile is the next big thing," said Jeff Herrmann, vice president of Mobile Media at Nielsen Mobile. "In the U.K. and the U.S. especially, we already see millions of users of MySpace.com, Facebook and other social networks interacting with their virtual spaces while they are on the go. Consumer demand for mobile social networking may be a significant driver of mobile service pricing models as evidenced by Vodafone UK's recent move to offer unlimited Internet access as a standard feature of its new monthly mobile price plans."Nielsen's Mobile Internet Reports are available today in France, Germany, Italy, Spain, the U.K. and the U.S. The reports provide detailed audience measurement metrics for mobile Internet and offer insights on how mobile users are interacting with social networking and other mobile Internet content.

About Nielsen Mobile

The Nielsen Mobile service of The Nielsen Company is the world's largest independent provider of syndicated consumer research to the telecom and mobile media markets. The Nielsen Mobile service focuses exclusively on tracking the behavior, attitudes and experiences of mobile consumers; their reports also provide up to seven years of data on Internet, video, gaming, audio and advertising trends for mobile phone users. Nielsen's technology-driven research provides unique and holistic insight into how mobile customers use their devices and what they think about brands, devices and services. For more information, please visit http://www.nielsenmobile.com/.

Frengo Connects Users Across MySpace, Facebook, hi5, Orkut and Bebo Social Networks

Frengo leads industry in creating first interoperable applications amongst leading social networks

Frengo, a leading provider of social mobile services, announced the availability of a suite of applications that run on top of and across Facebook, MySpace, hi5, Orkut and Bebo. Frengo focuses on social applications that are fun, engaging, entertaining and available anytime and anywhere – from a Web enabled PC or mobile phone. These applications not only allow users to interact with friends and friends-of-friends, but more importantly help establish new connections by discovering others across social networks who share common interests.

FLIRTABLE, the most-used mobile application on Facebook and a top 20 application overall, boasts four million members who use the social browsing and dating application globally. This application allows participants to surf profile pictures, send and receive private messages and virtual gifts and make introductions to friends. This is one of the first applications to interoperate amongst leading social networks. In addition to Facebook, FLIRTABLE is now available on MySpace, hi5, Orkut and Bebo.

FLIRTABLE users can now interact with other users distributed across those networks. For example, a MySpace user can interact with other MySpace users as well as users of Facebook, hi5 and Bebo.

Furthermore, FLIRTABLE MOBILE provides access to all of the above features from any Web enabled mobile phone. “We are excited to unlock the potential of interaction across more than 200 million people on these social networks. This is reminiscent of text messaging ten years ago, when you could only message people on your network. The traffic was very small, but when the carriers established interoperability across these networks – the traffic and utility of texting exploded,” said Mahi de Silva, Frengo CEO.

“Applications like FLIRTABLE have already found great traction within individual social networks but we are really jazzed about leading the charge to get users across these networks to connect with one another. We think it adds a whole new layer of vitality to social networks and raises the bar for other developers in this space.”

Another application called LOLz, a collaboration between Frengo and I Can Has Cheezburger? (http://www.icanhascheezburger.com) is also now available on MySpace, Facebook, hi5 and will be on Orkut later this month. It is a unique application that represents the utility that can rise as user-generated content, social media and mobile technology converge. Centered around user-submitted images and captions, this application brings the humor of “LOLCats” to social networks – making it easier to upload content, caption or re-caption popular images, and share with friends as a quick way to participate in a community of users who share a quirky sense of humor. LOLz can also be easily accessed from a mobile phone and includes features that allow users to easily upload and caption pictures from a camera enabled mobile phone.

In addition to I Can Haz Cheezburger?, Frengo powers the mobile services for popular applications from top social networking developers including Slide, RockYou and Frozen Bear.

Crush or Flush Indiana Community Predicts Obama to Win State Primary

Through Crush or Flush's new interactive polling feature called Golden Ticket™, a representative sample of 500 Crush or Flush members in Indiana predict that Obama will win the Democratic candidate nomination in Indiana with a 53:47 percent margin. In Indiana, the Crush or Flush community is 57% male, 43% female, and over 75% are between the ages of 18 and 30 years old.

Quattro Strikes Deal with Skyhook Wireless for Location-based Ads

By Mickey Alam Khan

Location is Everything

Skyhook Wireless has upgraded its software developer kit to include location-based advertising from Quattro Wireless, a mobile site developer and ad network.

Developers using the Skyhook Wi-Fi Positioning System will now be able to embed ads from Quattro in their mobile applications. The idea is to serve ads that are based on the mobile consumer’s location.

“Quattro did this deal because we wanted to get into the space of advertising within mobile applications as well as within targeted mobile applications,” said Eswar Priyadarshan, chief technology officer of Quattro, Waltham, MA.

“Many of the client advertiser RFPs [request for proposals] we’re seeing have a local targeting component to them and therefore we’re constantly looking for ways to expand our local reach and this partnership is right in line with that effort on our part,” he said.

In addition to its mobile ad network, Quattro is known for its GetMobile platform that lets advertisers and publishers build, manage and host their mobile sites.

The upgraded Skyhook software developer kit will enable Wi-Fi positioning customization based on the needs of different location-based applications.

Developers can choose the push-to-fix deployment mode for on-demand location or continuous scanning mode for navigation and other applications that need constant location awareness, according to Skyhook.

“What we’ve done with Quattro is we’ve extended that code so that the developer now requests location from our engine and they also request a location-targeted ad from the engine,” said Ted Morgan, founder and CEO of Skyhook, Boston.

“Quattro will track the number of users, how much the developer gets paid for that ad and make sure they get paid, just like AdSense works with Google,” he said.


Sky-Fi

Skyhook’s metro-area positioning system uses Wi-Fi instead of satellites or cell towers to deliver location data supporting location-based services.

Quattro is Skyhook’s first mobile ad network partner. Other Skyhook clients are AOL for instant messaging and Apple Inc. for the iPhone.

The Quattro ad network includes Procter & Gamble Co., Sony, General Motors Corp. and Thumbplay. Quattro gets paid for facilitating the ads in the network and Skyhook gets paid for providing the location. The developer or the application owner is paid for providing the user.

“Quattro wants to go after higher-value ad inventory, which is more targeted, more relevant ads,” Mr. Morgan said.

“But in order to do that, they need additional elements of the user, in particular, location,” he said. “And right now, Quattro and other ad engines have a hard time getting the user’s location. By working with Skyhook, they can get the location from a large number of mobile devices.”

On-deck Mobile Social Networking Revenue to Reach $412M in 2012: Study

By Mickey Alam Khan

Marketers use social networking to increase credibility for their messages


A new study claims that revenue from on-deck mobile social networking services nationwide will reach $412 million in 2012.

Mobile social networking is gaining more support from tier 1 and 2 operators as well as wireless carriers and additional marketing support, according to consultancy Frost & Sullivan.

“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,” said Vikrant Gandhi, senior analyst at Frost & Sullivan, in a statement.

“Mobile social networking services clearly need to be targeted toward mass-market phones in order to gain traction,” he said.

Three converging trends drive mobile social networking, per Frost & Sullivan: emergence of popular social networking services online; increasing penetration of the mobile Web; and the development of mobile advertising.

The findings were published in Frost & Sullivan’s “An Insight into U.S. Mobile Social Networking Markets” report.

Online social networks such as MySpace, Facebook and LinkedIn now all have mobile versions through the mobile Internet, whose penetration is at 15 percent, the consultancy claims.

Also, mobile advertising is emerging as a key revenue model for off-deck mobile social networking providers.

However, a major challenge is to create dedicated and effective mobile advertising models to offer targeted ads to the mobile social community, Frost & Sullivan said.

What that requires is cooperation between advertising service providers, mobile social networking firms and wireless carriers. Users of mobile social networks should also consent to share more data about themselves.

That said, the ads should be more immersive and not simply banners within mobile social networking sessions, the consultancy said.

But it is the ad model that needs major consideration.

“For instance, the present cost-per-thousand for mobile advertising within mobile social networking services is not very high,” Mr. Gandhi said in the statement. “Similarly, the fill rates or the ability to monetize the available inventory are also low.”

5 Things that Make Your Social Network Monetize

By Andrew Chen

Are the social networks making tons of money?

People have been very excited about the advertising prospects of social networks lately. First you have announcements from MySpace about an 80% rise in CTR through profile targeting, as well as some claims of Facebook's going rate CPMs being $4. Furthermore, the recent gold rush in Facebook apps has led quite a few folks amassing large userbases with dreams of incredible monetization. It's quite easy, with all the profile information that social networks have, to automatically assume that this information is the same type that drives Google-like revenue and monetization.

So let's talk about this... Are social networks making money hand over fist? Why or why not?
To aid this discussion, I'll go through a couple of the critical challenges that affect social network monetization:

1. Engagement is inversely correlated with CTRs
2. Inventory isn't homogeneous, it's a pyramid
3. Don't confuse interest with intent
4. CPMs are driven by underlying value, not just targeting
5. Brands are a big wild-card

Understanding the CPM formula

Before we jump in, let's talk about how CPMs are generated. For the purpose of this discussion, I'm going to focus on direct response advertising, rather than branding (which we'll get into later).

Ultimately, CPM is a simple calculation that is determined by:
CPM = Clickthrough Rate * Price Per Click * 1000

For example:
1,000,000 impressions * 0.5% clickthrough * $0.25 PPC= $1250 per 1 million impressions = $1.25 / 1000 impressions= $1.25 CPM

This is from the publisher side - if you have a good CTR or PPC or Impressions, you make more money. Now from the advertiser side, you need to figure out what the underlying value is. After all, even if you get a ton of clicks, if you can't convert them on your side and have a good transactional value at the end, you won't want to pay a PPC.

CPM = Clickthrough Rate * (Value of Action * Conversion Rate) * 1000

Conversion rate means the percentage of people who do the desired "action" that drives value for you. That might mean the % of people who buy from your e-commerce store, or who fill out your mortgage lead form, or whatever. You could also substitute this for Lifetime Value for your social network, or LTV for your virtual goods-driven casual game, or whatever.

Now let's jump into how different dynamics on your site drive these different variables.

1. Engagement is inversely correlated with CTRs

You know how MySpace and Facebook just encourage you to click-click-click and log in every day and are just incredibly sticky? That's great engagement, and it helps with a lot of things, particularly growth and competing in strategic areas.

However, the drawback is that the more pageviews people have your site, the lower the clickthrough rate gets.

You should read the rest of the article on MikeOnAds, it has some other great data on there. This issue of engagement negatively correlating with clickthrough rate is well-documented, and happens at every network.

So how bad are the clickthrough rates, exactly? I'd guess that across all the social networks, something from 0.01% to 0.05% is pretty standard. You might have some higher CTRs in some very specific areas, for example right after a user completes an action (composes an email, friends a person, etc) but in general, they will be quite low.

There's some evidence for Facebook's CTRs being about 0.04%, doucmented here:


2. Inventory isn't homogeneous, it's a pyramid

Sometimes you might hear the CPMs for one of these social networks is X dollars. And that's true, it's exactly the price that SOME people are paying for the inventory. But in general, that's not how publishers end up managing their inventory. Instead, if you take the impressions for a user across their session, you'll instead get something like this:

• The first US impression in a session has the most value ($10)
• Then impressions 2-5 have some level of brand value or high CTR value ($3-5)
• Then after that, you're hitting ad networks selling on category ($1)
• Then eventually, you hit remnant ad networks ($0.50)
• Finally, you hit pure CPA remnant networks ($0.10)

These are just example numbers. Now the problem is that while people often quote the premium numbers, the majority of the impressions happen in the low CPM remnant numbers. The premium ads happen on the homepage, major channel pages (like Music, Games, etc), but not in the most popular pages like forums, profile pages, etc.

I'd expect the top inventory (let's say 5-10%) end up generating 50% of the overall revenues.
So in your financial forecasting, don't expect to be able to multiply a big CPM against your ad inventory. Instead, you need to be nuanced about the different sections of your site, and how they sit relative to the ad inventory pyramid.

3. Don't confuse interest with intent

Now to the profile data - how much is this worth? You might expect that by looking at profile keywords like "skiing" or "travel" or topics like that, you could make a ton of money on social networking sites.

Every page should be like Google, right? Wrong. (unfortunately)

The reason is that interest in a topic is different than having intent. Having "skiing" on your profile is completely different than searching for "ski tickets." The latter means you're ready to buy, whereas the former simply means that you sometimes buy. This is GREAT for brand advertising, but really doesn't help on the direct response CPM formula.

Having high intent typically drives a higher conversion rate (driving up the PPC) as well as driving up the CTR. Having interest but not intent should theoretically be better than nothing, but there might be other effects, like having more "looky-loos" click on your ad just out of interest, but not actually buy the product there.

4. CPMs are driven by underlying value, not just targeting

Furthermore, you really have to look at the underlying value of the transaction to figure out how the CPMs will turn out. After all, the underlying value drives the PPC, which then drives the overall CPM. In order words:

Mortgage leads trump contextually relevant ads because Mortgage leads can be worth 50X more than a non-transactional site.

This is how a mortgage lead generation site might work: Person enters their contact info, which then gets sold to 4 lenders, which then call the person to work out the loan. Each lead might be worth $10, but because it's sold to 4 different companies, it's worth $40 total.

Now a ski ticket might be more contextually relevant service. Or maybe a music subscription service. Or some other mass consumer good. But the increase in clickthrough rate COMPLETELY offsets the powerful value of the mortgage lead, all you will see is LowerMyBills psychedelic peacock ads.

Now targeting really does help advertisements, but the problem with display advertising which shows as you are using a site is that the effects are not going to be as strong as high-intent areas.
In this case, targeting might increase CTRs and conversion rates, but it's unlikely that it's so powerful it'll completely offset the value decrease. People are mostly interested in things that don't generate lots of money, and because of that, you have to compensate.

5. Brands are a big wild-card

Of course, the real wild-card is brand advertising, because it really follow the CPM formula. Brand advertising is really not priced based on any logical way that follows a formula like that. Instead, it's based on relationships, prestige, audience metrics, and other intangibles. So as the audiences for brand advertisers migrate from TV to the internet, you will see a tremendous amount of brand dollars move as well. These brand dollars will simply follow whatever's "hot" - thus, because the major portals seem to be growing pretty slowly and/or actually losing engagement, you'll see brand dollars chase the social networking sites.

However, unless your name is Tom or Mark, you're unlikely to get your hands on too many of these dollars. And the reason is that brand advertising is sort of a "winner take all" game, where only the largest sites can afford large sales teams that can develop the deep relationships required to sell to Madison Avenue brand ad agencies.

The current hurdle is that advertisers don't like UGC (er, CGM content) because it requires them to let go of their brand. So until that changes, through technological means or an attitudinal change, the brands are preferring buying video on mainstream media sites.

What's next?

Now, it's not all bad for social network ad monetization. The place in the CPM formula that's really driving revenue is that impressions are getting bigger and bigger. What these sites can't make up via advertising efficiency, they are making up through pure bulk. That's why you can build sites with 100s of million in revenue, and it's growing every day. The brand shift is also going in their favor.

More interestingly, I'm looking for native ad units to develop on the site which do work for advertisers. Months ago, I had written about "tag along widgets" which has quickly materialized as the Cost Per Install ecosystem on Facebook. Here's the excerpt from "What's a Facebook user worth, anyway?"

Another option would be for some sort of deeper integration to happen as hooks to another widget. For example, I could imagine a company (let's say Apple) creating their own widget. If you as Mr. Travel Widget, when installed, would try to convince the user to also install an Apple widget, I think that'd be an interesting model. Basically tag-along widgets which advertisers pay some amount for every user that is brought along.

As these native ad units mature, I'd expect some new revenue opportunities to be built from scratch. Let's see how it goes - it can't be worse than display ;-)

Mobile Marketing Association Releases Global Mobile Advertising Guideline

The Mobile Marketing Association’s (MMA’s) Mobile Advertising Guidelines provide global formats, guidelines and best practices necessary to implement mobile advertising initiatives in a variety of mobile media channels including: Web, messaging, downloadable applications and video. The guidelines are intended to promote the development of advertising on mobile phones by (i) reducing the amount of creative effort required for a mobile advertising campaign, (ii) providing an effective and consistent experience on the majority of mobile phones worldwide and (iii) providing an engaging consumer experience.

The MMA’s Mobile Advertising Overview provides an overview of the mobile media channels available to advertisers today, including the benefits and considerations to optimize campaign effectiveness and strengthen consumer satisfaction.

The Mobile Advertising Overview can be located on the MMA Website at www.mmaglobal.com/mobileadoverview.pdf.

The MMA guidelines are the result of ongoing collaboration between MMA member companies and MMA Mobile Advertising Committees in the Asia Pacific (APAC), Europe, Middle East & Africa (EMEA), Latin America (LATAM) and North America (NA) regions. Committee members are representative of all parties in the mobile marketing ecosystem, including handset manufacturers, operators, content providers,
agencies, brands and technology enablers.

The intended audience for these guidelines is all those involved in the commissioning, creation, distribution and hosting of advertising via mobile. The MMA Mobile Advertising Guidelines present a baseline whose widespread adoption will accelerate market development and ensure consumer satisfaction.


About the Mobile Marketing Association

The Mobile Marketing Association (MMA) is the premier global non-profit trade association established to lead the growth of mobile marketing and its associated technologies. The MMA is an action-oriented organization designed to clear obstacles to market development, establish mobile media guidelines and best practices for sustainable growth, and evangelize the use of the mobile channel. The more than 600 member companies, representing over fifty countries around the globe, include all parts of the mobile media ecosystem. The Mobile Marketing Association’s global headquarters are located in the United States and it has established Branches in the North America (NA), Europe Middle East & Africa (EMEA), Latin American (LATAM) and Asia Pacific (APAC) regions. For more information, please visit www.mmaglobal.com.


About the MMA Mobile Advertising Committee

The MMA Mobile Advertising Committee, with active committee member participation across the globe, has been established to create a library of format and policy guidelines for advertising within content on mobile phones. By creating mobile advertising guidelines, the MMA ensures that the industry is taking a proactive approach to keep user experience, content integrity and deployment simplicity as the driving forces behind all mobile advertising programs world-wide.