The Marketing Opportunity of Mobile Social Networking

Brought to you by Noah Elkin

Combining two of the hottest channels in marketing today, mobile and social, would seem a marketer's dream: rising mobile usage, consumers flocking to social networks, and social networking emerging as one of the fastest-growing activities among mobile users everywhere. But in reality, putting mobile and social together is not a classic one-plus-one-equals-three scenario. In fact, because mobile and social are still emerging channels, when you put the two of them together, you get an even less mature proposition.

Part of the problem is ownership: Who owns mobile marketing, who owns social programs, and who takes responsibility when those lines get not only crossed but also inextricably intertwined? And what steps do marketers take to gain a voice in the conversations taking place across mobile social networks? I go into these and other issues in detail in my upcoming eMarketer report on mobile social networking and location-based services, and it's really in the union of the two where the potential lies for marketers.

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Location-based social networks are not new. Services like Loopt and Brightkite helped establish the mold of "checking in" to find nearby friends, trendy places, and interesting activities. But scale has remained an issue. Unless you have a critical mass of users, the proposition for advertisers and marketers is not that compelling.
More recently, Foursquare emerged out of the ashes of the now-defunct Dodgeball (which Google eventually converted into Latitude after acquiring Dodgeball in 2005). Foursquare has effectively broken the location-based network mold by adding a gaming element that enables users to compete for badges and points based on the number of times they visit a particular location.

Social competition has given location-aware networks new currency and a big boost in potential. Loopt recently acknowledged the competition by acquiring GraffitiGEO, which offers similar game-playing functionality as Foursquare. Is this an emerging trend we'll start seeing more of? Quite possibly, given that social networking and gaming are both big with mobile users, who may jump at the chance to outdo their friends, and especially when these networks wisely offer easy ways to tap into users' existing social graphs.

What's compelling for marketers is that location-based networks like Loopt and Foursquare encourage users to leave tips or reviews for fellow travelers, creating the potential for a powerful word-of-mouth effect or direct marketing opportunities related to favorite locations. As Circ.us co-founder and fellow iMedia contributor Adam Broitman told me in a recent interview, location-based social networks "are potentially an inroad to the kinds of hyper local targeting that we talk about but which we really haven't yet reached." The benefit of hyper local, he said, is that it allows for "more of a direct response play, which many marketers find more valuable," and may serve as a useful counterweight to the current emphasis on awareness-building on mobile.

The looming question is where the majority of consumers will go to get recommendations and offers. In other words, will social networks effectively serve as the search engines for these types of location-based content or will it be the search engines themselves? Recommendations from friends and family, particularly for something as personal (and specific) as, say, a restaurant, arguably hold greater sway than anonymous reviews, but in some cases, anonymous reviews may have an advantage in terms of scale, especially on a site like Yelp.

The big X factor in this equation is Google, 360i's David Berkowitz explained in a recent conversation. "There's a lot Google can do," he said, citing the ability to tie user-generated content and location to search applications and mobile versions of the site, "but they need to make a real point out of it."

Mobile social networking is a fast-emerging space, and yet another example of consumers moving much faster than marketers, meaning there are a lot more mobile users on social networks than there are marketers. With social networks and their business models still maturing, that's not entirely surprising. But the takeaway is that there's tremendous power in place. The trick is finding a way to tap into it and connect it with people and things.

Noah Elkin is a senior analyst at eMarketer, where he covers trends in mobile marketing, content, and commerce.