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Monetizing Mobile Social Networks
Monetizing Mobile Social Networks
Monetizing Mobile Social Networks
Monetizing Mobile Social Networks
Monetizing Mobile Social Networks
Monetizing Mobile Social Networks
Monetizing Mobile Social Networks
Monetizing Mobile Social Networks
Monetizing Mobile Social Networks
Monetizing Mobile Social Networks
Monetizing Mobile Social Networks
Monetizing Mobile Social Networks
Monetizing Mobile Social Networks
Monetizing Mobile Social Networks
Monetizing Mobile Social Networks
Monetizing Mobile Social Networks
Monetizing Mobile Social Networks
Monetizing Mobile Social Networks
Monetizing Mobile Social Networks
Monetizing Mobile Social Networks
Monetizing Mobile Social Networks
Monetizing Mobile Social Networks
Monetizing Mobile Social Networks
Monetizing Mobile Social Networks
Monetizing Mobile Social Networks
Monetizing Mobile Social Networks
Monetizing Mobile Social Networks
Monetizing Mobile Social Networks
Monetizing Mobile Social Networks
Monetizing Mobile Social Networks
Monetizing Mobile Social Networks
Monetizing Mobile Social Networks
Monetizing Mobile Social Networks
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Monetizing Mobile Social Networks

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Presentation at Social Networking Conference, May 8, 2008, Tokyo

Presentation at Social Networking Conference, May 8, 2008, Tokyo

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  • 1. Monetizing Mobile Social Networks Christopher Billich, Infinita Inc. Social Networking Conference Tokyo, May 8, 2008
  • 2. Japan Mobile Market Key Differences Same cost for On- and “Free” 80% 3G ★ User Experience Level Off-Deck Messaging penetration access Operators Operators control All handsets ★ Operator-Handset Maker handset SIM-locked pay handset Relationship Level makers makers Operator ★ Operator Business Model Email, not Revenue (Open) Level SMS Share favors Standards CPs ★ Regulatory/Government Competition on Network Technologies Level No spectrum license costs © 2008 Infinita Inc.
  • 3. Mobile Social Networking Awareness and Adoption among Mobile Users (in %) No Awareness Awareness, but no Adoption Adoption Source: Impress R&D, September 2006/2007 © 2008 Infinita Inc.
  • 4. Mobile Social Networking mixi ★ Operated by mixi Inc. ★ On-deck on 2 of 3 carriers ★ Mobile and PC Social Networking Site ★ Business Model: Advertising (>90%), Premium features (<10%) ★ #1 service in Japan SNS market ★ More than 13 million users ★ 15-20 billion PV/month ★ More than 60% of traffic generated via mobile (up from under 20% 15 months ago) ★ Key Points ★ Invitation-only ★ Clear mobile/PC differentiation Source: mixi Inc. © 2008 Infinita Inc.
  • 5. Mobile Social Networking mobagetown ★ Operated by DeNA Co., Ltd. ★ Off-portal site ★ Free, mobile-only site combining games + social networking + avatars + mobile commerce (and more) ★ Goal: #1 mobile portal in JP ★ Business Model: Advertising/mobile commerce ★ More than 6m users in 18 months (now more than 10 million) ★ ca. 18 billion page views/month ★ Core Enabler:Virtual currency “MobaGold” Source: DeNA Co., Ltd. © 2008 Infinita Inc.
  • 6. Mobile Social Networking mobagetown © 2008 Infinita Inc.
  • 7. Mobile Social Networking mobagetown: Business Model Source: DeNA Co., Ltd. © 2008 Infinita Inc.
  • 8. Mobile Social Networking mobagetown: Revenues, Registered Members, Page Views Revenues in Reg. Members in 9.87 Page Views in 17,924 6,000 10 9.43 18,000 ¥ million million million 9.03 5,162 9 8.65 16,000 8.13 14,927 5,000 7.79 4,628 8 7.43 14,000 13,383 6.89 7 6.44 4,000 12,000 6.03 10,793 6 5.46 3,135 10,000 9,239 5 4.84 3,000 2,507 8,000 4 2,000 6,000 1,562 3 2 4,000 1,000 1 2,000 0 0 0 FY06 Q4FY07 Q1FY07 Q2FY07 Q3FY07 Q4 Jun 07 Sep 07 Dec 07 Mar 08 Apr 07 Jun 07 Sep 07 Dec 07 Mar 08 Source: DeNA Co., Ltd. © 2008 Infinita Inc.
  • 9. Japan Advertising Market Advertising Expenditures across Major Media 2007 and YoY Changes 2006/(2005) +21.3% (+28.6%) Mobile: only 1% +3% (+0.9%) share, but +59.2% (+35.4%) growth -5.2% (-3.8%) -4% (-1.3%) -4.2% (-1.9%) +10.8% (+11.7%) -0.9% (-1.2%) Sources: Dentsu Communication Institute, February 2008; Production Costs + Media Spendings © 2008 Infinita Inc.
  • 10. Mobile Content vs. Mobile Advertising Revenues 2003-2007 (in US$ billion) Mobile Advertising ★ Mobile Content revenues growing at Mobile Content average annual rate of +17.3% and slowing (last: +10%, est.) ★ Mobile Advertising increasing +56.5% yearly and accelerating (last: +59%) ★ Advertising/Content Revenues Ratio shifted from less than 1:20 to more than 1:6 within past 5 years * Mobile Content and Mobile Advertising Revenues in US$ billion Source: Mobile Content Forum (July 2007), *Infinita Estimate (May 2008) © 2008 Infinita Inc.
  • 11. Mobile Advertising Market Mobile Advertising Revenues, 2000-2011 (US$ million) ★ Mobile Advertising revenues to almost double again within next 4 2007 actual figures exceeded years Dentsu’s own previous estimate ★ Crossing the US$ 1 billion threshold (US$ 556 million) by 12% by 2010 ★ Mobile still undervalued as an advertising medium by a factor of 4 (2006) • Media Usage Share 4% • Advertising Expenditures Share 1% Sources: Dentsu Communication Institute (April 2007, estimates) (February 2008, historical data) © 2008 Infinita Inc.
  • 12. Mobile Advertising on mobagetown and mixi Mobile Examples: Banner Advertising ★ Compensation model: CPM, weekly ★ Pricing: US$ 3,000 to US$ 9,000 ★ Av. CPM: US$ 3-6 ★ Targeting: Operator, Gender ★ CTR (mixi): 0.2-0.4% Sources: DeNA Co., Ltd., mixi Inc. © 2008 Infinita Inc.
  • 13. Mobile Advertising on mobagetown and mixi Mobile Examples: Exit Screens ★ Compensation model: CPM, weekly ★ Pricing: US$ 4,500 to US$ 7,000 ★ Av. CPM: US$ 4.5-7 ★ Targeting: Operator, Gender ★ CTR (mixi): 0.7% Sources: DeNA Co., Ltd., mixi Inc. © 2008 Infinita Inc.
  • 14. Mobile Advertising on mobagetown and mixi Mobile Examples: Mobile Email Advertising (Newsletters) ★ Compensation model: CPM ★ Av. CPM: US$ 10 (Newsletter) to 120 (Standalone Messages) ★ Targeting: Operator; Gender, Age, Region (at premium) © 2008 Infinita Inc.
  • 15. Mobile Advertising on mobagetown and mixi Mobile mobagetown x Coca Cola Tie-up ★ Advertiser: Coca Cola ★ Campaign Date: 05/07-06/07 ★ Campaign Outline • DeNA created special Coca Cola- branded version of mobagetown, accessible only to double-registered users of mobagetown and Coca Cola Mobile • Reach top scores on Coca Cola-branded games to receive branded avatar items • Coca Cola-branded Decomail graphics to use in mobile emails to friends, thus spreading awareness for the campaign • “Coke Character” with avatar and blog Coca Cola/mobagetown Tie-up Site • Campaign extensively promoted via tie-in Source: Nikkei with Coca Cola “The Coke Side of Life” TV campaign © 2008 Infinita Inc.
  • 16. Mobile Advertising on mobagetown and mixi Mobile mobagetown x Coca Cola Tie-up ★ Results (first four weeks of campaign) • Almost 1 million sign-ups for Coca Coca mobile site • 185 million page views • 5.6 million page views on Coke character blog page alone • 350,000 users connected with Coca Cola character as friends • 190,000 comments posted to the Coke character blog ★ ...and the campaign lives on one year later Coca Cola-branded version of mobagetown (above), branded games (top right), branded Decomail (left) Source: DeNA Co., Ltd. © 2008 Infinita Inc.
  • 17. Mobile Advertising on mobagetown and mixi Mobile mobagetown x UNIQLO Tie-up ★ Advertiser: UNIQLO ★ Campaign Date: April 2008 ★ Campaign Outline • Download coupons for apparel retailer UNIQLO and redeem for discounts on relevant items at participating UNIQLO stores • Exclusive avatar items corresponding to the goods purchased via entering the unique product ID from price tag on mobagetown • Branded game, goal: “try on” the outfits that are being promoted as part of the campaign by jumping up to catch clothes flying out of a clothes dryer UNIQLO-outfitted Avatars and Branded Game Source: DeNA Co., Ltd. © 2008 Infinita Inc.
  • 18. Mobile Advertising on mobagetown and mixi Mobile mixi x CC Lemon Tie-up ★ Advertiser: CC Lemon (Softdrink) ★ Campaign Date: May 2008 ★ Campaign Outline • CC Lemon “Corner” set up on mixi Mobile • Branded games (Flash Lite) • Branded profile backgrounds (“mixi Collection”) • “Keitai Soap Opera” (mobile novel) published in daily installments Source: mixi Inc. © 2008 Infinita Inc.
  • 19. Mobile Advertising on mobagetown and mixi Mobile mixi: “Login Jacks” and Promotions ★ Login Jacks: Fully branded versions of mixi Mobile login Page linked to promotions within the site (sweepstakes etc.) ★ Promotional campaigns that feature limited-edition products and branded content mixi Login Screen Jacks (left) and LAWSON promotion (right) Source: mixi Inc. © 2008 Infinita Inc.
  • 20. mobagetown Revenues Breakdown by Segment Banner/Email Advertising Revenues from <18 yrs segment Pay-per-performance Advertising Avatar Item/Virtual Currency Sales 21% 100% 30% 70% 32% 47% 16% 84% Source: DeNA Co., Ltd. FY2007 Q4 © 2008 Infinita Inc.
  • 21. Avatar Items/Virtual Currency Sales mobacasino ★ Launched in early April 2008 ★ Virtual casino featuring multi-player Roulette, Black Jack and Poker ★ To play, users need “Casino Coins” which can be obtained in exchange for Moba Gold ★ User rank rises with play frequency, enables access to higher, more exclusive floors of the casino ★ Goals • Deliver gaming content more appealing to adult audience • Create additional “outlet” for MobaGold currency beyond avatar items Source: DeNA Co., Ltd. © 2008 Infinita Inc.
  • 22. Avatar Items/Virtual Currency Sales mobacasino “Insert MobaGold” Source: DeNA Co., Ltd. © 2008 Infinita Inc.
  • 23. Avatar Items/Virtual Currency Sales Freemium Games ★ From late April 2008, DeNA will release exclusive mobile games developed in cooperation with top- tier games publishers ★ Adopted from well-known role- playing and simulation titles from other platforms ★ Basic play is free - MobaGold necessary to unlock multi-player mode, buy in-game weapons and tools ★ Proceeds from sales shared with publishers (rather than licensing) ★ Goals • Deepen games portfolio • Create additional “outlet” for MobaGold currency beyond Source: DeNA Co., Ltd. avatar items © 2008 Infinita Inc.
  • 24. Mobile Advergaming Dentsu/Robot “TsuiTsui” Source: Dentsu © 2008 Infinita Inc.
  • 25. mobagetown Evolution from Social Networking/Games Site to Mobile Portal... Source: DeNA © 2008 Infinita Inc.
  • 26. mobagetown ...and Mobile Search Engine “For search, too: mobagetown.” “A new experience in mobile search.” © 2008 Infinita Inc.
  • 27. Mobile Search/Content-Matched Advertising Search-related vs. Non-search-related Mobile Advertising Revenues, 2007-2011 (US$ million) Search ★ Mobile search-related revenues Non-search accounted for 16% of mobile advertising last year... ★ ...and will increase 5-fold to reach more than 60% of all mobile advertising revenues by 2011 Source: Dentsu Communication Institute (April 2007) *Note: graph based on 2007 estimate (US$ 556 million), actual Search-/Non-search data for 2007 (US$ 621 million) not released yet © 2008 Infinita Inc.
  • 28. Mobile Search/Content-Matched Advertising ...on mobagetown and mixi Mobile ★ Format: Text ads ★ Compensation model: CPC ★ Pricing: bidding mechanism (price set by advertiser) ★ mobagetown • Search: proprietary solution • Content-matched ads: Overture ★ mixi Mobile • Search: Google • Content-matched ads: Overture Overture-delivered content-matched ads on mixi Mobile communities Top of page (left), bottom of page with Text Ad (right) © 2008 Infinita Inc.
  • 29. Mobile Search/Content-Matched Advertising Local Search Advertising on mobagetown ★ Formats: Text ads relevant to search area ★ Compensation model: CPC ★ Pricing: bidding mechanism ★ Location-based advertising network “AdLocal” service provided by Cirius Technologies, Inc. ★ Advertisers can specify proximity (during an address- or map-based search) ★ Targeting: genre/product category, time of day, day of the week, area radius (1 to 10 km), weather (e.g. “show my advertising only if it is raining”) Source: Cirius Technologies © 2008 Infinita Inc.
  • 30. Key Points ★ Mobile Social Networking • Still lots of room for growth, but latecomers facing strong lock-in effects • MoSNS rapidly becoming a feature, not a service • Users gravitating towards using MoSNS as search resource ★ Mobile Advertising • Baby steps along a rocky road - but great potential • Moving towards deep tie-ups and branded content • Shifting from CPM to Pay-for-performance • Search and Content-Matched Advertising gaining significance ★ Revenue Streams beyond Mobile Advertising • “Freemium” content and services outside core SNS functionalities © 2008 Infinita Inc.
  • 31. Infinita Scope of Services Non-domestic Clients ★ Mobile and PC sites/apps ★ Outbound market intelligence production and consulting (foreign clients for JP market) Technical Research and Development Consulting ★ Inbound market intelligence ★ Mobile and PC sites/apps and consulting productions ★ Domestic market intelligence (domestic JP market) and consulting Domestic Clients © 2008 Infinita Inc.
  • 32. Infinita Selected Clients © 2008 Infinita Inc.
  • 33. Thank you! www.infinita.co.jp/research billich@infinita.co.jp © 2008 Infinita Inc.

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