Advertising to fuel mobile social networking growth

Ad-funded social networks will provide the bulk of revenues in the mobile user generated content (UGC) space by 2013, according to a new report from Juniper Research.

The report says that the total value of the UGC market, comprising of social networking, dating and personal content delivery (PCD) services, will rise from nearly $1.1 billion in 2007 to more than $7.3 billion in 2013, with social networking overhauling dating to become the largest revenue generating segment by 2009.

The report also notes the increasing importance played by advertising, which will account for nearly one third of total revenues in the UGC space by the end of the forecast period, and more than half of mobile social networking revenues.

Report author, Dr Windsor Holden, commented:“It’s clear that we have seen an industry wide shift regarding the implementation of business models in this area. Whereas initially there was a perception that users would pay a small mobility premium to access social networks on their handsets, it rapidly became clear that to achieve truly mass adoption, it would be necessary to offer free membership and then to augment that with advertising and the sale of premium content.”

The Juniper report also observed that while the iPhone had substantially increased public awareness of mobile content services, there was significant scope for improvement with regards to the marketing of such services within the industry as a whole. It also stressed the need for operators to reduce data costs outside of bundles to encourage casual use of social networking and dating services.

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