Thinking Strategically About Mobile Social Networking

Editor’s Note: Welcome to Reality Check, a feature for RCR Wireless News’ new weekly e-mail service, Mobile Content and Culture. We’ve gathered a group of visionaries and veterans in the mobile content industry to give their insights into the marketplace. In the coming weeks look for columns from Mark Desautels of CTIA, Laura Marriott of the Mobile Marketing Association and more.
So social networking is hot-or so you may have already heard. Well, you heard right. Social networking is becoming the de facto communication method of choice for more and more people. It’s addictive, media-rich, focuses on messaging and it has potential for content distribution, all of which make social networking a natural fit for the mobile space. Carriers are jumping at the chance to get in on this massive trend in personal communication.
That is good news for consumers, brands, advertisers, content providers and social networking service (SNS) providers alike. But the evolution of this ecosystem must be deployed with great care and consideration of future strategic goals in order to harness the maximum potential for carriers, consumers and content.
Social media is more than a massive trend. It’s a sea change in the world of entertainment and communication. We’ve all been to YouTube and seen cats flushing toilets and ill-advised backyard science projects involving Coke and Mentos, and we’ve decided to call it entertainment. That shows us that the old media broadcast model is dying. The idea of a media-consuming public that sits passively in front of a TV set is fast being replaced by a vibrant, active community of shared upstream content providers. More than ever before, consumers understand that content is communication. They have wholeheartedly embraced the model that they are both producers and consumers of a media fabric that is as effective at keeping them in touch with close friends as it is in connecting them to potentially millions of other “friends” populating thousands of social networking sites.
The new content distribution model represents a panoply of overlapping personal networks. As perfectly suited for this new distribution model as the Internet and social networking sites are, the mobile space is even better suited given the fact that the mobile phone is a constant companion equipped with a camera and is continually connected to a network for which the inherent existence is to connect people and share content.
Where does your friend list live?
So we’ve established that social networking really is perfectly suited for, and stands to become the next big thing in mobile, but for whom? Simply enabling access to a social networking site is a win only for the social networking site. Here’s why: In the long run, carriers compete with social networking providers. It’s safe to say that wireless carriers want to be the personal communication service provider of choice for all. So do social networking sites. That’s a conflict. The question is whether this is a zero-sum competition to own the consumer or if coexistence is possible. The answer depends on the deployment.
For now, tactically minded carriers, very reasonably, see a short-term opportunity. If kids on social networking sites are sending a lot of messages, and messaging is a high-margin source of revenue for carriers, then doing a deal with even just one large social networking site will help drive next quarter’s revenue upward.
That’s fair enough, but this approach also has the drawback of only facilitating communication between users’ friends who exist on various social networking sites. That means the subscriber is not using their mobile address book but is instead using a “friend list” that exists on someone else’s server as their address book. This turns the network operator into a “dumb pipe” providing only a vehicle to communication value that exists on a third-party service. This “ISP approach” drives carrier ARPU down in the long run because the communication value to the consumer is no longer in the carrier network. It is outside the network and consumers will seek out the lowest-cost path to access it, including non-carrier wireless alternatives.
How can mobile add value?
The strategic-minded carrier recognizes that owning the customer relationship in the long run means facilitating communication and adding value to the personal communication equation. Yes, this absolutely means providing subscribers access to their favorite SNS providers, but it also means doing it in a way that differentiates the mobile social networking experience from the web-based experience and in a manner that coexists meaningfully with the carrier network.
Where a carrier can add the most consumer value is by integrating social networking categories into the device and network services, starting with the phone’s address book, gallery and camera. The uploading and sharing of content are important cornerstones of social networking, and carriers are in a unique position to add this value on top of social networking sites while tying the consumer behavior to a carrier-provisioned service. Every carrier already enables each subscriber the ability to interact with their existing mobile social network, which can be defined as the contacts in their phone’s address book. Address-book integration, if done properly, not only allows users to share content from a web-based community site with their friends, it also allows them to invite their friends from their phone’s address book to the social networking site of choice. This is a win-win for carriers and social networking sites because it benefits both while preserving the relationship between the carrier and its customer.
A key strategic imperative in the mobile space is to recognize that social networking is not a fad-it is an evolution of communication that the entire mobile industry was hoping would happen in some form when it invested so heavily in broadband, namely that more people would transact more data. Well, here it is, and every carrier already has agreements with myriad service providers to offer high-value silos of value like mobile media, instant messaging, video, audio, etc. You have to think far beyond mobile web access.
Layering these high-value mobile services on top of third-party social networking sites is not easy. It requires a backend platform that can facilitate the seamless transactional integration, which benefits not only consumers-who essentially become storefronts for one another, (much like they do on the Web, but in this case with mobile content)-but also the carriers and SNS providers who together will generate and share in the additional revenue streams created by this integrated approach.
The bottom line is that social networking can represent a positive strategic shift for the cellular telecommunications industry and how it recognizes the changing communication desires of consumers. We must embrace social networking properly by taking the extra steps necessary to deeply integrate it into the mobile customer experience. This approach preserves the importance of the mobile link on the value chain and creates a win-win-win scenario for carriers, consumers and SNS providers.
You may contact Shawn at shawn@intercastingcorp.com. You may contact RCR Wireless News at rcrwebhelp@crain.com.