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Advertising to fuel mobile social networking growth

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Ad-funded social networks will provide the bulk of revenues in the mobile user-generated content (UGC) space by 2013, according to a new report from Juniper Research.

The report says that the total value of the UGC market – comprising social networking, dating and personal content delivery (PCD) services – will rise from nearly $1.1 billion in 2008 to more than $7.3 billion in 2013, with social networking overhauling dating to become the largest revenue generating segment by 2009. The report also notes the increasing importance played by advertising, which will account for nearly one-third of total revenues in the UGC space by the end of the forecast period, and more than half of mobile social networking revenues.

According to report author Dr Windsor Holden, “It’s clear that we have seen an industry wide shift regarding the implementation of business models in this area. Whereas initially there was a perception that users would pay a small mobility premium to access social networks on their handsets, it rapidly became clear that to achieve truly mass adoption, it would be necessary to offer free membership and then to augment that with advertising and the sale of premium content.”

The Juniper report also observed that, while the iPhone had substantially increased public awareness of mobile content services, there was significant scope for improvement with regards to the marketing of such services within the industry as a whole. It also stressed the need for operators to reduce data costs outside of bundles to encourage casual use of social networking and dating services.

Other findings from the report include:
• The number of active users of mobile social networking sites is expected to rise from 54 million in 2008 to nearly 730 million in 2013.
• The Far East & China region will be most popular in terms of mobile user number for mobile social networking and PCD throughout the forecast period, but the Indian Sub Continent will become the largest region for mobile dating services by 2010
• There will be more than 9 billion downloads from PCD sites by 2013, of which 32% will be ad-supported.

Juniper Research assessed the current and future status of mobile user-generated content based on interviews, case studies and analysis from representatives of some of the leading organisations in the growing mobile user-generated content industry.

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