Why is mobile social networking worth $3.45b?

In a few years Social Networking on mobile will be bigger than such traditional media industries as hollywood or music. Get your money into it now, be part of the winners in this. This is not a hyped industry wishing to build a revenue model some day in the future. At 3.45 billion dollars, this is a VERY healthy industry today. Jump onboard!

Writes Tomi in his post Like SMS before it: Mobile Social Networking now the megabillion dollar killer app for 3G mobile

I can't count being dyslexic, so my job is to ask why? What are the drivers to all this activity. Because its not about technology. its more about the inter-relationship between biology, social network theory, anthropology, Darwinism, cultural theory, economics, marketing, fan fiction, mobile, the internet, science, game theory, of course peacocks, cheese making and.... trust.

So....

Of those who text voted in the first American Pop Idol, 30% had never sent a text message before.

Why?

You Tube is in fact about folk culture

Why?

400 million people voted for Lee Yuchun in the China's first ever Supergirl (pop Idol) contest

Why?

90% of all Korean teenagers belong to Cyworld - but a staggering 30% of the entire Korean population belong to Cyworld

Why?

55,000 Citizen journalists write for OhMyNews

Why?

6.4 million belong to World of Warcraft, those people pay a sub of £8 per month

Why?

Second Life anyone

Why?

Then of course we have the blogs, and Wiki's, the moblogging, skype, special interest sites and even Yahoo knowledge.

The story, is about people - and what we are - A "we species" - human beings are highly social and are built to be so.

But industrialisation, mass-consumption, mass-media - although providing us with greater prosperity - denied us some of our fundamental rights as people.

Folk culture, culture made by ordinary folk, enables us to tell - retell our stories and be able to place ourselves within moments of history, of time. This happens in every culture on the planet. We are using technology to take culture back for ourselves. Dialogue is used for us to make sense of our place and context in the world - its not a choice it is fundamental. Moreover, we have been given the tools to tell and re-tell our stories, it is the reemergence of a traditional folk culture, reinvented for the 21st Century on steroids

It makes culture more participatory and renders it more transparent to its inhabitants.

When companies realised the opportunity to drive mass consumption, through mass media, folk culture was used as a recruiting ground of talent, but we soon migrated to culture that was defined and created not by the "folk" but by corporations.

Of course makes sense the commodification of culture. We make it - YOU BUY IT - WE MAKE MORE OF IT AND YOU BUY MORE OF IT. And then we stick lots of interruptive ads around the content to make you buy more stuff.

For 80 years, everyone has been seduced into the idea, that we don't want to tell our stories and that we had no relevant role, other than as consumers of culture. This is simply not true.

We have witnessed an evolving historic act of revolution. It is the death knell of the "read only" culture. And the end of information feudalism

Business Week said "this is the biggest change to business... since the Industrial Revolution."

Many existing corporations have been built as rigid hierarchical structures, which was required in a command and control world. For a while it suited us and delivered exponential value. But our world has changed. Living in a postmodern world means that we have to leave our industrial mindset in the past. Our means of production have changed and also our means of consumption.

Web/mobile 2.0 are Pull platforms that harness the passion, commitment and desire to learn of their participants, thereby enabling the formation and functioning of distributed communities that can rapidly improvise and innovate.

In doing so it creates greater meaning for us.

Communities of interest are morphing into communities of creation and communities of production

Look at companies like Spreadshirt or Howies or ebay that clearly demonstrate new economic platforms supported technology, but built by people, co-created by people.

As Lukasz founder of Spreadshirt says

We did not create Spreadshirt, the community created Spreadshirt

And beyond folk culture, there is the power of collective intelligence that can leverage the knowledge of our peers and here

Yochai Benkler in his book the wealth of Networks writes

Today we live in a networked society. Digital information technology, the economics of networked information production and the social practices of networked conversations, qualitatively change the role that individuals can play in cultural and knowledge production and dissemination. Communities are sticky in ways that mass media never was, it requires a very different approach to what we create, how we create it and how we market it.

That is why social mobile networking is worth $3.45b.

you can argue over the lose change if you want.

And the cheese? The dutch have a saying that the value in the cheese is in the holes. Rupert Murdoch bought the digital holes in the digital cheese. The inter-relationships between people.

Comments

[Mark Earls]

Think this is spot on, Alan.

The only thing we need to remember is that the technology is revealing what was always the case. We are a networking species - a Super Social Ape as I dub it in my forthcoming Herd book.

While the technology is new and exciting - certainly for those who value the monetising bit - it's really showing an abiding truth about who we are. And that truth changes everything.

M

[alan moore]

Hey Mark,

Thanks for posting. I like the super scial ape analogy.

I certainly shall look foward to reading your book!

cheers.

Alan :-)

[Peter Cranstone]

Great post... one thought, about half way down you mention "interruptive ads"... I think this is a killer to people using mobile devices. Interruptive ads on the desktop is one thing, on the mobile device it's something else entirely.

So what if the web site actually knew what I liked and it also knew where I was at any particular time (all user controlled of course so you can opt-in) - now all of a sudden ads become information and not interruptions. The value of the ad just went up dramatically.

We actually have a working demo of this relevant ad capability. Send me an email if you're interested in learning more.

Cheers,

Peter

[Paul Jardine]

The reason Social Networks are worth so much is because they create trust. If a complete stranger wants to sell me something, I'm unlikely to listen, but if it's someone I know - however loosely - then I'll listen, at least.
The smaller the network, the greater the trust, which is why niche communities will flourish and why the big ones will eventually die or evolve more defined sub-communities.
In terms of marketing, it's pretty hard to determine audience in this new 'channel', perhaps 'influence' is a better measure - though I'm not sure what the means of measurement is.

[Tomi T Ahonen]

Hi Peter and Paul

Good comments and insightful observations, thank you.

Peter good point about interruptive ads and mobile. And yes, the ultimate achievement in what we call "engagement marketing" in our book is precisely, that, when advertising becomes content. Then it is no longer an interruption, the content (ie ad) is welcomed. But that requires a lot of creative work at the "advertising" creative end. Of course it can be done, but for that we need precise targeting and segmentation, leading nicely to Paul's thoughts.

Paul - totally agree here too. The more tight and relevant our community, the more it means to us. For example a car club is good. A car club in Britain is better. An Audi drivers club in the UK is even better. An Audi A4 drivers club in Britain is better still, etc.

And in terms of measuring influence, yes we are already rapidly developing the metrics. Xtract of Finland for example will calculate an "Alpha Score" for every member of a given community. The top 5% or so, with the highest Alpha Score, will be those members of the community who yield the biggest influence on the whole community. Early real customer data reveal dramatic improvements in just about every marketing impact, from more rapid new service adoption (when offered via Alpha users) to higher retention ie lower churn when loyalty of Alpha users is secured, etc.

Thanks for visiting and posting your comments

Tomi Ahonen :-)

[Mark Earls]

Great post Tomi. Keen to know more about Xtract's approach. Could you share?

Couple of questions, though on your post.

1. While I agree with the thrust of the communities argument, I think we need to be careful not to think about communities as selfishly as the old school marketing world thinks about its "audiences".

Human beings are social animals - brand communities are primarily built for social reasons and not for product reasons (although that is where our interest tends to lie in our observations of them).

One test of this would be to see if social and product base influence map on each other in these communities. Do you have any indications of whether or not this is true.

2. One sceptical critque of the "interruptive" conclusion you write of in the book goes like this: good advertising and commercial comms has always been stuff that the audience welcomes as content; bad advertising is just annoying. Is your distinction really any more profound than this? (I suspect you're trying to say more than this but I wondered what you thought...)

Keep up the good work...

[Tomi T Ahonen]

Hi Mark

Oh no! You've read the book? What did we say? ha-ha. very good catch. Yes, we wanted to go further with that thought, I remember, but felt we had done enough "damage" already (remember we wrote several pages of the whole industry and competences also being tossed upside down...)

But yes, good point. I think we do discuss those themes here at the blog, in occasional "thought pieces" that go deeper. I can't pick the first of our 600+ blog postings to suggest where to start, ha-ha, but yes, we do try to celebrate the smart stuff (I am thinking of for example the Nike shoe inside the videogame, or the Rihanna video teaching the dance steps to the fan, etc)

On Xtract - stop by their website and you'll want to read their white paper (or brochure) on Alpha Users, and other social animals if you will, and their roles. They have spotted Omega customers, Sigma customers, Delta customers etc already from how differently we behave just by studying real social behaviour in networks. Xtract's website is at www.xtract.info. I can also put you in touch with their people if you'd like more. Both Alan and I do various workshops and seminars with Xtract from time to time, so we're pretty close.

Thanks for stopping by and posting the comment. And thanks for having our book. Bring it along when you next see Alan or me, and we'll love to sign it for you.

Tomi :-)

[alan moore]

Dear Mark,

You are right our articulation of interruptive marketing goes beyond "good advertising and commercial comms has always been stuff that the audience welcomes as content; bad advertising is just annoying."

Its about, for example the fact that broadcast communications is not about a persistent conversation, which social networking is.

"We are also witnessing the shift from individualised and pesonalised consumption towards consumption as a networked practice." Henry Jenkins in Media Convergence

Engagement is about context, experience, and a valuable experience, shared flows of communication, and co-creation. Its about belonging, reputation and validation. Again these are all things that interruption cannot deliver.

I also agree, with you that to create value for communities, one needs to think about the best end-user experience and work back from that.

That is why - the rules of engagement are completely different. Look at SeeMeTV or Current TV co-creation with different models of incentive and revenue splits. even though in SeeMeTV's case those revenue splits are small they are an indication of the possibilities.

I would like to discuss your thoughts on communities and product based mapping though as Tomi said, Xtract are world class in this area - in many many ways. But this probably would be better done face to face its been a while anyway since we did the IPA thing toogether

I certainly think they would provide real value for you and your work.

Thanks for posting

Kind regards

Alan

[Mark Earls]

Cool. Let's do it soon.

M

[yaromir]

Mobile social networking is ig in Japan, bigger than web=based. Its specific feature is that it is closely linked to real-life. Here is the latest example of niche mobile SNS, targeting young moms:
http://analytica1st.com/analytica1st/2007/01/mobile-social-network-mamasa-targets-at.html

[Tomi T Ahonen]

Thanks Yaromir!

Tomi :-)

[Jenalyn]

Im surprised that it took this much time to blow up. Its a stable investment because the cellphone will always be a staple in everyday life. Going mobile interms of socail networks only makes sense.

[Pete]

This is the reason for it being worth 3.45b: http://www.undertheradarblog.com/wp_blog.html?fb_2042860_anch=2905755. People are making the transition from facebook and myspace. Even these powerhouse social networks are starting to add apps for the phone.