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Why all the hype around social networks? Facebook’s astronomical valuation and Microsoft’s investment in it; Google’s acquisition of Youtube and their OpenSocial concept; The popularity of MySpace and their plans to offer targeted advertising… Why the hype? Because it is finally recognized that word of mouth is in fact much more powerful than all brand advertising schemes put together! As a matter of fact, in most cases, word of mouth accounts for over 70% of marketing pull!

But where is the word of mouth most powerful? In the various internet communities or in real life? Will you turn to your so-called “friends” on Facebook if you need advise on buying a new car? Maybe. At least for the fun of it. But, most likely, it is the people that you know well and trust, your “real” friends, whose advice you will follow. When I look at the list of my friends on Facebook – how many of them are my “real” friends? 10% at the most!

So where are these “real” social networks to be found? Marketers can’t possibly “spy” on people to see who their friends are. Actually, these “real” social networks are quite easy to get at, and without violating any privacy laws!

Mobile operators have them!

People’s mobile communication is probably the best indicator of “real” social networks, and this communication happens to be nicely stored in mobile operators’ data warehouses, in CDRs (Call Data Records). Ironically, mobile operators (or at least, most of them) have not figured this out yet and are not utilizing this asset at all. With some exceptions, of course. We at Xtract are experts in analyzing billions of CDRs. We have the tools to not only isolate and profile social networks from mobile operator’s  communication data, but also find the most influential individuals in these networks - the Alpha Users. And some of our mobile operator clients are starting to take advantage of this, in their own marketing efforts and in offering their customer base to 3^rd party advertisers for targeted marketing. However, it’s still a long way to go!

Most mobile operators are still doing marketing in a very traditional and not very effective way, through broadcasting or very specific product-related targeting. While their internet counterparts are quickly embracing the social networks concept and throwing billions into it, mobile operators who have this fantastic asset are still on the sidelines.

Wake up, mobile operators!!! Social networks have always been there and have always influenced people’s purchasing behavior. You have the data to take advantage of it, and we have the tools for it. So, as the old Nike commercial said “Just do it!”