Thursday, May 08, 2008

MeM Cannes: Making money from social networks

Here's a few hasty notes from the panel that Gerard Grech of Orange led this morning in Cannes. The topic was communities and social networking and making money from them.

Panel includes Marco Argenti from Dada, Olaf Kroll from Myspace, Antonio Vince Staybl, itsmy and Mark Curtis, from flirtomatic and Arunachulam Nagappan, Newbay.

Question: Is there a difference between old social networks going mobile and starting mobile.

Antonio: mobile only social networks have advantages: itsmy's average age of uploaded content is within the last 24 hours.

Gerard: the more mobile the community the more instant and fresh?

Mark: mobile users log in 8 times a day, web users 3 times a day. usage patterns re times are similar, more use when travelling on mobile.

Mark; 40% have added their location to their profile with no prompting. Only 15% on the web.

Olaf: the big social networks can rely on their user base. myspace on mobile is used for basic communication. pureplay mobile have to add features like easy upload and lbs, which are pretty tricky and won't take off for a while, but that's the value add that the new guys can give.

Antonio: mobile is a new world, we have new isps, we have new operatiing systems, we have new companies.

Mark: It is because you (Olaf/MySpace) are seeing mobile as a subset of users is why you are going to struggle for the next few years. The revenue models are there from mobile social networks. Fixed line social network guys are still trying to find the revenue models to fly!

Marco: we believe the sustainable business model for social networks is a mix of mobile and web.

We make more money than facebook, and facebook is about 100 times bigger. Ads on community have lower click thru rates on line. on mobile the powerful micropayment mechanism works well.

Olaf: we started with a subscription service. didn't work, we then moved to ad-funded model. The cpms are much better, double or three times on mobile compared to online.

antonio: our main revenues today are advertising.

Mark: basic usage is free and we sell premium services, extra fun that people want to pay for. 15% paying for this on mobile - way higher than ads.

Ad models change when a new medium emerges. Internet advertising is currently the model we are using on mobile, it cannot be the end medium. we need to innovate and experiment. Hard to do because the advertisers aren't sold on mobile full stop yet.

Arun: operators were good at making lots of money, they did this even when people knew they could get stuff free on the internet. The big internet players are slowly getting into mobile. When the big boys come in and make everything free the small boys are going to have to change their models.

Mark: when a new medium emerges new companies emerge. there will be new champions. when you go on to an old medium you tend to design with the old medium in mind. facebook myspace etc will get it wrong in the first few iterations but finally will get it spectacularly right.

Re viral: Antonio: With mobile we have the first screen people can show to each other anytime anywhere - that's the real viral power of mobile. We can show what we are doing right there and then and rave about it.

In short a great session. And I'm on Mark and Antonio's side for what it's worth!

The rate of change is so rapid it's difficult for one person to keep up to speed. Let's pool our thoughts, share our reactions and, who knows, even reach some shared conclusions worth arriving at?