A recent report from the analyst firm Juniper Research forecasts that virtual goods purchased via a mobile platform will total $4.6 billion in 2016. According to the report, the increased use of social gaming is largely due to the rise in smartphone and tablet adoption. As consumers continue to replace feature phones with smartphones, virtual goods bought from mobile social media services will increase from $3 billion this year to nearly $5 billion worldwide in 2016.

The Juniper report states that most social media services have not yet been able to monetize their offerings effectively. So, while many social media sites are popular with U.S. consumers, it remains a challenge for these sites to make a profit from those who use their platform. Simply, they need to make sure the consumers are more than just casual visitors to their site, but that they are consistently upselling them with value-added goods and services.

Looking globally, Juniper analysts reported strong sales of virtual goods through mobile media services in Japan and China, stating the firm expects this growth to expand to the United States. By adopting monetization models that cater to mobile offerings, social media services can increase revenue per user and sustain profitable revenue models.

An open architecture is key to a successful monetization model. Today’s online commerce happens anyplace, anytime and anywhere. It’s social and it’s virtual. A profitable online sales model cannot be constrained by platform, technology or location. Here at Plimus, we feel that all organizations, not just mobile social media services, require a frictionless, simple and open solution that facilitates a move toward a business model that increases ROI and takes advantage of the increase in virtual goods spending forecast by Juniper Research.
What do you think? What monetization models will have the greatest impact on increased virtual goods and services sales?

Additional information on the Juniper report can be found in the article, “Report: Social Virtual Goods Via Mobile to Reach $4.6B in 2016,” in Mobile Payments Today.