Knowledge Bridge

Global Intelligence for the Digital Transition

Social media’s challenges in India: Monetizing its mobile users

Emerging markets have been the engine of growth for major social networkSocial networkAn online destination that gives users a chance to connect with one or more…

The challenge for Facebook, for example, is two-fold. While India might be sprinting ahead of the rest of the world in terms of market size, Facebook captures much lower revenue per user outside of its US base. Before it floated on the market, Facebook revealed its revenue per user statistics: In the US and Canada, it earns $9.51, but in Europe, it earns only $4.86 per user. In Asia, that figure drops to $1.79 and even lower for the “rest of the world”, a mere $1.42. Some, but not all, of that difference in revenue per user is down to lower per capita incomes.

Another reason for the lower revenue is that Facebook users in rapidly developing economies access the site on mobile at much higher rates than in North America, and Facebook has been struggling to generate revenue on mobile at levels approaching what it makes from computer users. Nowhere is this a bigger challenge for Facebook than in India.

Targeting young people, Facebook has grown rapidly in India, at a pace of 22 percent every six months. Toward the end of 2014, India will equal, if not exceed, the US when both countries are expected to have 170 million to 175 million members.

India’s wired internet infrastructure is poor, so users have little choice but to turn to the mobile web. It is estimated that 30 percent of Facebook users there access it via mobile devices. And although there is a huge market for mobile ads in social media, Facebook itself is not sure whether its mobile business is working, even in developed countries such as US and UK. Currently, Facebook does not generate any meaningful revenue via mobile.

Like many other internet companies, not to mention news organisations, Facebook is looking for a way to monetise its huge and growing mobile audience. The social network has just started to introduce ads to its mobile version, including sponsored updates in users’ Facebook news feeds. Controversially, Facebook is also considering using ad targeting based on its users’ mobile app usage.

Facebook has to figure out how to turn its millions of comments, recommendations and likes into revenue. In addition to ads, it is exploring ways to allow people to buy clothing, furniture, music, a book, other content or goods when a friend has liked it. All you would need to do is clickClickA click can denote several different things. It can be a metric that…

As we’ve noted before, audiences are moving to mobile, but advertising revenues often lagLagThe delay between making an online request or command and receiving a response.…

Article by Ran Ju

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