Rating: Facebook could turn operators into digital drug mules
Ever since Evan Williams, Twitter’s CEO, gave a keynote speech at the Mobile World Congress 2011, we’ve always though that mobile network operators have an ambivalent attitude towards ‘disruptive’ technologies. Surely ‘tweets’ displace SMS traffic? Now Facebook is coming increasingly under the spotlight. According to its pre-IPO filing, Facebook now has more than 400 million users accessing the service on mobile devices, which is up from 70 million three years ago. These figures confirm that Facebook is now the dominant social networking ecosystem on the move as well as on the desktop. But what are the network operators getting out of this? Facebook’s ‘over-the-top’ (OTT) business model is creating significant strategic and revenue risks for mobile operators, according to Magister Advisors. Yet research carried out by Socialbakers shows that brands like Vodafone are benefitting significantly from interaction with users on Facebook.“The Facebook IPO is about the worst thing that could happen to network operators,” says Victor Basta, managing director of Magister Advisors.
He argues that Facebook services such as messaging are eating into operators’ valuable SMS traffic.
“They [operators] are supporting the end users’ social networking habits, but they see very little, if any, commercial benefit and the downside risks are significant,” claims Basta.
Despite the growing commercial importance and subscriber utility of mobile social networking, mobile operators are missing out on significant revenue opportunities because they sit outside the Facebook ecosystem, Basta insisted
“The fundamental challenge for network operators will be finding a way of becoming part of the Facebook ecosystem rather than simply external enablers,” he says.
Facebook has recently made noises about sharing some revenue with operators – such as payments income from users playing games on Facebook, Basta reckons.
Plus, mobile network operators will play a crucial role in enabling Facebook to monetise users on the move.
The challenge will be leveraging the power of that position by finding a way to work within the ecosystem rather than ‘giving it away for free’ while helping Facebook grow in value.
Otherwise, mobile network operators will simply become “digital drug mules, supporting a burgeoning global habit with little financial upside,” Basta says.
However, Socialbakers – a social media and digital analytics company, has discovered that leading brands are increasingly using the social network – like Facebook – to interact with consumers.
The best day for this interaction turns out to be on Sundays. Telecoms brands experience engagement rates of 0.11 per cent on Sundays compared to just 0.06 per cent on Tuesdays and Thursdays, Socialbakers says.
“It seems telecoms fans start their day Facebook browsing in bed, resulting in engagement peaks for brands like Vodafone UK from 7 am on Sunday mornings,” the company says.
Jan Rezab, Socialbakers’ CEO, offers the following advice, “To maximise fan engagement, brands need to tailor social media updates according to their audiences browsing habits. ”
Whilst they must maintain engagement throughout the week, they should consider posting their most compelling content at times of peak engagement to ensure the greatest online brand buzz,” he added.
So while Facebook obviously needs the mobile network operators, those operators also need Facebook to reach their customers – both existing and future.