Now that I have recovered from the whirlwind week at the CTIA show in Las Vegas, I can reflect on some of the events of the week. I have to plead guilty to “stirring the pot” and creating some interesting debate in my panel session on social networking.
The topic of monetizing social networks on mobile networks was discussed, with the obvious conclusion that advertising will have to pay a key role in any sustainable business model. The debate ensued on the relative roles and economics of this model as it applies to the network operator and the social network owner. Network Operators have a tremendous database of potentially useful marketing data for third party application providers to utilize in maximizing the ad inventory of their products. In the past, and for good legal reasons, the privacy of this data has been honored and not exploited in a maximum economic manner. Now enter the social networks.
A social networking profile has more information than exists in a carrier marketing database. Profiles are volunteered, are deep with interests, preferences, activities, relationships, friends, etc. The data housed by the social network is a potential bonanza for advertisers. The inability of network carriers to fully exploit their consumer data could become a moot point as the mega social networks integrate their data with mobile ad networks.
The next issue that was debated was the relative power between a social network that may have over 100M members and a network operator that has 60-20M subscribers. Most business discussions with operators have a clear pecking order. In general the carrier is picking and choosing the best partners, from many, that will maximize their revenue and customer’s needs.
There are very few application providers who have this discussion with an operator as an equal or superior level of relative strength. One example that obviously leaps to mind is Apple. The Iphone introduction and partnership appears to be a relationship between “equals”. The existing introduction of large social networking onto mobile devices seems like a partnership of equally motivated and powerful partners, each bringing significant assets to the table. In the future, will the large social networks try to cut similar revenue sharing arrangements as Apple? Will they be able to? And lastly, will it matter.