Mobile - advertising in social networks

South Africa: Mobile Social Networks are New Advertising Medium

A MXIT subscriber frantically punches some text before sending a message to a friend, who replies obligingly. Another acquaintance, chipping in on the conversation, introduces a new friend to the two buddies.

This hypothetical exchange not only shows the entrenchment of mobile social networks such as MXit in SA - it is also part of an emerging advertising medium: mobile advertising.

MXit, which is to cellphone users what FaceBook is to i nternet users, has built a considerable subscriber base.

According to its website, it has about 5,79-million subscribers, and the instant messenger is eagerly courting advertisers.

"We have the ability to position advertising in your consumers' pockets. We can help you to establish your presence in future mobile technology now," MXit says on its website.

Vodacom, which owns The Grid, a mobile social network that matches rival MTN's noknok, estimates that mobile advertising will grow to about R1,5bn by 2011.

"Mobile social networks have the potential to attract advertising in the same way that internet-based social networks are already attracting significant amounts of advertising," says Vodacom SA's commercial executive director, Romeo Kumalo.

He says mobile social media is just one category of mobile advertising, and cautions that no independent measure of mobile advertising as an advertising medium is available yet.

Globally, mobile advertising is forecast to double to about $2,44bn next year from $1,11bn this year and $504m last year , according to Jack Myers Media Business Report, published by JackMyers.com, a business-to-business website for media, advertising and entertainment industry professionals.

Gloria Ruhrmund, GM at GloCell Wireless Application Protocol, a division of GloCell that is behind UBU, another mobile social network, says "the growth potential for mobile advertising" is immense.

Corporate advertisers have started testing the waters. For instance, MXit, in which Naspers owns a 30% stake, notes on its website that Peugeot used MXit as part of the launch of the Peugeot 107.

Ster-Kinekor has also run campaigns on MXit.

Eddie Groenewald, the CEO of mobile marketing firm Multimedia Solutions, agrees this is a trend : "Mobile advertising is certainly growing as more corporates are beginning to use MMS (multimedia messaging service) as a way to communicate directly with their customers," he says.

High response rates to mobile advertising campaigns, ranging from 10%-25%, outstrip the meagre 1%-2% response rates of traditional advertising campaigns, he says.

" A strong base of users locally means there is base to send advertising to," Groenewald says. But he also cautions that mobile social networks are useful in advertising "only for brand building and for certain types of sales".

"Social media is ideal for targeting under-18s, but they have little buying power. While social media is trendy and cutting edge, it's not ideal for a call to action or to promote FMCG (fast-moving consumer goods), as the purchasers are generally not into social media networks."

Mobile penetration highlights the advantages mobile advertising offers. Last year, 18,81-million cellphones were either owned or rented in SA, compared with 17,52-million in 2006 and 15,27-million in 2005.

Ruhrmund says: "The use of mobile internet is prolific."

She says about 3,7-million cellphones are compatible with instant messaging, about 5-million are Java-enabled, and many are equipped with WAP (wireless a pplication p rotocol).

Modest costs make mobile advertising appealing.

"The high cost of TV and print advertising is driving the market to mobile as it is cost-effective," Groenewald says.

Devising a typical mobile campaign presents fewer difficulties. "Campaigns are easy to formulate, being put together in less than a week as opposed to traditional media campaigns which often take months to formulate and penetration to over 90% of the base happens within 48 hours," Groenewald says.

"There is also a strong viral spread with people forwarding messages to friends and family."

The "viral spread" is measurable too. " You can see which people respond and match that to the base it was sent to, thereby identifying new cellphone numbers which can then be added to the base.

Kumalo says that Vodacom expects mobile advertising to grow rapidly , and could overtake advertising spend on the internet by next year.