The webs big social networks have gone mobile, taking millions of users with them. But its the pure mobile communities that are driving all the innovation...
"We sold 10,000 boob jobs in two weeks.” Now, this is not the kind of comment you’d expect to find in a mobile trade paper.
But then any discussion of social networking takes you to strange places. And here we have Mark Curtis, CEO of Flirtomatic, describing how his network’s wheeze of giving members the chance to send each other comedy breast enhancements paid off handsomely.
It’s another example of the many virtual gifting ideas that seem to have caught the imagination of mobile social networkers, without yet doing the same for the fixed giants such as Facebook, Bebo and MySpace.
These companies are now targeting mobile, of course, and with no little success in terms of traffic and PR. But one gets the impression that the real creativity is still occurring among the pure plays many assumed they would squish. Perhaps this is why the mobile incumbents are being so gracious about their new competitors.
Curtis says: “Facebook is doing a great job of educating people about the mobile internet. And we’re all benefiting.”
The figures show how great the impact has been, traffic wise. According to the browser company Opera, Facebook is the number one mobile destination in South Africa, number two in the UK and number three in the US and Indonesia. But notice how prevalent the pure mobile communities are. There’s Peperoni at number four in South Africa and India.
Meanwhile Mocospace, though not in the top ten in Opera’s November report, has been as high as number three in the highly competitive US market. Justin Siegel, CEO of Mocospace, sees no reason to fear the major web brands.
“I always wondered what would happen when Facebook and the others came in", he says. "Truth is, we kept on growing. We now have five million users making two billion page views a month.”
Indeed, Siegel now detects a tipping point being reached for his network, adding: “We’re starting to see real anecdotal shift in awareness. We hear about people having Mocospace parties. A waitress even asked me recently if I was Justin from Mocospace!”
This success has been achieved with very little marketing. Mocospace is almost entirely off-deck, reached via search or typing in the URL; it doesn’t even have a shortcode.
As an ad-funded project, Mocospace might seem to be under pressure from the current macroeconomic downturn. But again Siegel sounds a positive note. “So far in 2009 I haven’t seen any change in advertising activity. 2008 was a great year. We’ve been making good returns. People say mobile social networks can’t survive on ad revenue alone. That’s wrong. It’s working fine for us.”
It’s not doing too badly for Singapore’s BuzzCity, whose MyGamma network is carving up developing markets. BuzzCity has such reach now with MyGamma that it runs an ad platform along the lines of AdMob to feed ads into its own vast network plus 2,000 affiliate publisher sites including Dada and Jamba. It claims to have delivered 7.5 billion banner ads in Q4 2008, up 38 per cent from the previous quarter.
KF Lai, CEO of Buzz City, believes that such is the power of this network that the web giants are potential customers, rather than competition: “Friendster is the only one of them to really break through in the East, but even so it’s working with us. We always felt that being a social network would not be enough for us, and that there was an opportunity to move into ad sales. Because the community is so large and strong, we can now offer targeted campaigns – and it’s becoming very successful.”
While BuzzCity and Mocospace offer a brand of mobile social network that’s all about profile building and making friends, there are others that mimic the content-oriented formats of YouTube and Flickr. A case in point is Mobango, which gives 4.2 million members a platform through which to create, store, share, download and play every type of mobile content.
Giles Richardson, SVP of sales and marketing of Mobango, says: “Mobango is built on the principle that content should be free and ad-funded. That still applies. Our members download six million items a month, mostly UGC. But this has alerted developers and now companies like EA, Herocraft, Opera and Nimbuzz use the network to market demos and trial versions of their products.”
You can see where this is going. Ad revenue is nice, but augment it with a Google-style auction for placement, and a compelling new revenue stream is opened. This is something Mobango’s competitor GetJar is also pursuing. And it’s telling that the Lithuanian firm recently opened a US office and hired Glu’s marketing chief Patrick Mork to drive it to the next level.
The realisation that there’s more to revenue than ad-based income dawned long ago on GoFresh, the German firm that runs the high profile itsmy community. After years of building its user base beyond one million and exploring ad-funding, it is now looking at ‘social entertainment’ as a means to drive revenues from users themselves. This is partly because of the strict rules it imposes on itself over the kind of advertising it accepts.
Antonio Vince Staybl, CEO of GoFresh, says: “Ad revenue is not doing as well as people say. We turn away advertisers that offer subscription services, even though our ad revenues would be five times greater if we accepted them. It’s been painful. But ultimately, we’d lose the users. They’d be signed up to subscriptions, get pissed off and might even think it was itsmy selling them.”
The firm has started selling rich media ad ideas like MMS-to-TV that blur the lines between marketing and entertainment. Advertisers love them, but Staybl admits the space is embryonic. So instead, GoFresh is focusing on social gaming. One example already launched is a snowball game that lets users attack each others’ sites. It’s free to play for a day, but users can pay for re-fills and shields. If they get onto the leader board, play is free.
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Such sentiments are enthusiastically endorsed by Flirtomatic’s Mark Curtis, who believes this goes to the heart of why mobile communities may have found it easier to monetise their users than those on the web.
He says: “The key distinction is between social networks that are ‘one to one’ and those that are ‘one to many’. If you say ‘I love you’ to one person, it means more than if you get on a stage and say it to a group. This puts genuine value on the conversations that take place in our community, and it’s the key to ARPU. It’s very important to us that we remember this. It’s why we’ve always resisted the pressure to set up user forums for example.”
Impressively, Flirtomatic’s revenue grew four times last year, with a 55 per cent rise in ARPU. The firm is active in the UK, US and Germany. This activity suggests the market is now at a tipping point. You can see it too in the changing direction of some of the world’s leading D2C companies.
ME has been reporting the shift from ringtone subscriptions to social media among giants like Zed, dada and Buongiorno for two years. But it’s still arresting to hear them say it so forcefully. Here’s Luca Pagano, UK MD of Buongiorno, talking about its community concept Blinko, which is rolling out now: “Blinko is the strategic focus for the whole business. In five to seven years, it will be all we do, along with B2B work and operator partnerships.”
This from a company that built a global business on content subscriptions. In its new vision, Blinko, which will be available as a client or via WAP or web, will become a hub for building profiles, sharing content and (crucially) accessing free IM and SMS. Buongiorno will monetise it by sharing data revenue with operators, advertising and selling premium content. It’s very similar to the strategy of Zed, which pioneered the social media concept on mobile with its Zed Station concept in 2007.
Another obvious reason for such radical strategic shifts is the targeting of subscribers in emerging markets for whom the mobile is the dominant comms channel. How telling that, for BuzzCity, it’s Kenya, Nigeria, RSA, Egypt, India and Indonesia that make up its top markets. Also interesting is the revelation from Mocospace that a third of its members are Hispanic and a third Afro American.
“I think it’s probably because these groups have a higher proportion who are in jobs where they don’t have access to a PC,” says Siegel.
For newly-connected users all over the world, mobile social networks could open up a dizzying new vista of opportunities. Who knows which way it could go. They might even mimic the loftiest heights of their Western counterparts and send each other comedy knockers.
