No Money in Mobile Social Networking? Think Again!

Published: 23 Apr 2010

By Vikrant Gandhi, Senior Analyst, Mobile and Wireless Communications

Over the past several years I have come across many mobile advertising industry participants commenting on the difficulty of monetizing mobile social networking inventory. Mobile advertising networks often find it difficult to achieve good fill rates for the inventory belonging to mobile social networks and, quite frankly, the industry has struggled to generate good advertising revenues from mobile social networks. Cost per thousand (CPM) of under a dollar and Cost per click (CPC) less than a cent are not uncommon for mobile advertising campaigns run within mobile social networks. I think it is mainly due to the following three reasons:

  • Availability of a large amount on inventory
  • Lack of proper targeting mechanisms
  • Concerns with spoiling the user experience

Remember, inventory is a function of parameters such as number of users visiting a particular mobile property, session times, page refresh rates, and others. Accessing popular social networks on mobile phones remains the prime browsing habit of mobile users, and the average session times are also longer for the mobile social networking users. This is quite inline with the trends in the PC world. Proliferation of advanced Smartphones and feature phones with better browsers and larger screen sizes ensures that the available inventory of mobile social networks continues to grow. In fact, Facebook recently announced (February 2010) that more than 100 million people are actively using Facebook from their mobile devices every month – this comes less than six months after Facebook announced 65 million people on Facebook Mobile!

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