Ad-funded social networks will provide the bulk of revenues in the mobile user-generated content space by 2013, according to a new report from Juniper Research.

The report says that the total value of the user generated content market -- made up of social networking, dating and personal content delivery services -- will rise from nearly $1.1 billion in 2008 to more than $7.3 billion in 2013. The report predicts that social networking will surpass dating to become the largest revenue-generating segment by 2009.

"Advertisers are increasingly interested in social networking because of the growing volume of users," said Dr. Windsor Holden, principal analyst for Juniper Research, Hampshire, Britain.

"Advertisers have been concerned that the reach isn't there yet, which is holding mobile advertising back, but gradually the reach of mobile is getting toward the tipping point," he said.

The Mobile User Generated Content: Dating, Social Networking & Personal Content Delivery 2008-2013 (Second Edition) report also notes the increasing importance played by advertising, which will account for nearly one-third of total revenues in the UGC space by the end of the forecast period, and more than half of mobile social networking revenues.

The Juniper report also observed that, while the iPhone had substantially increased public awareness of mobile content services, there was significant scope for improvement with regards to the marketing of such services within the industry as a whole.

"The mobile phone is so personal to the individual user, because only one person uses that device, unlike a PC, and that's very attractive to advertisers," Mr. Holden said.

"There are metrics that show hit rates and click-through rates demonstrating that mobile is getting mass usage and it's at the point that advertisers are spending a significant portion of their budget on mobile."

The report also stressed the need for carriers to reduce data costs outside of bundles to encourage casual use of social networking and dating services.

The report found that the number of active users of mobile social networking sites is expected to rise from 54 million in 2008 to nearly 730 million in 2013.

"I think social networking is one of the most important destinations for ad revenue in the mobile space," Dr. Holden said. "If you look at the millions these companies are making, most of it is from advertising, more than half in most cases.

"Response rates to mobile advertising are typically at least 10 times as good as the fixed Internet," he said.

The report predicts that the Far East & China region will be have the most numbers of mobile social networking and PCD consumers throughout the forecast period, but the Indian Sub Continent will become the largest region for mobile dating services by 2010.

Juniper forecasts that there will be more than 9 billion downloads from PCD sites by 2013, of which 32 percent will be ad-supported.

Juniper Research assesses the current and future status of mobile user-generated content based on interviews, case studies and analysis from representatives of some of the leading organizations in the growing mobile user-generated content industry.

Juniper Research provides research and analytical services to the global hi-tech communications sector, providing consultancy, analyst reports and industry commentary.

"From an industry perfective, the most interesting finding is the transition in the business model," Dr. Holden said. "Carriers imagined that they could charge a premium for social networking service, but they're coming to the conclusion that isn't the case.

Mobile social networking and dating are generally offered on a free, basic access basis. Many mobile dating services charge on a per-message basis, while most social networking sites rely on advertising and viral marketing strategies.

"That new model puts a lot more onus on the advertising," Dr. Holden said.

Mobile social networking players such as BuzzCity and MocoSpace are all fairly new companies, but they have very rapidly established networks of several million users.

"People are signing up to add some of these mobile services, while on TV people are actively trying to surf away or with DVR skip the ads as much as they can," Dr. Holden said. "On mobile you agree to see the ads on a preroll or a postroll basis, which is attractive to advertisers, because you can measure definitely how many people are seeing the ad and responding to it.

"A mobile ad is more measurable than a print ad," he said. "You can make sure it's being sent to a specific individual and ask them what kind of stuff they're interested in seeing, and that targeting improves the click-through rates."