Social Media

Information Systems

Chapter 8

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“It’s All About Eyeballs”

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• New owner wants to change way PRIDE is used and make it more profitable.

• Number of eyeballs to look at ads and clicks to generate revenue.

• Will PRIDE actually work?

• Need to describe it to potential vendors.

• Carefully think about details of how system will function before estimating development costs or project timeline.

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PRIDE Application Prototype

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• Generating revenue from social applications difficult, but possible.

• Not all social media applications involve Facebook or Twitter.

• It's all about marketing.

• Think about ways of applying new, emerging technology to accomplish business organizational strategies.

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Study Questions

Q1: What is a social media information system (SMIS)?

Q2: How do SMIS advance organizational strategy?

Q3: How do SMIS increase social capital?

Q4: What roles do SMIS play in the hyper-social organization?

Q5: How do (some) companies earn revenue from social media?

Q6: How can organizations manage the risks of social media?

Q7: 2025?

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Q1: What Is A Social Media Information System (SMIS)?

• Social media (SM) – Use of IT to support content sharing among

networks of users– Enables communities, tribes, or hives– People related by a common interest

• Social media information system (SMIS) – Supports sharing of content among networks

of users

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Social Media Is a Convergence of Disciplines

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Number of Social Media Active Users

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Three SMIS Roles

• Social Media Providers– Facebook, Google+, LinkedIn, Twitter, Instagram,

and Pinterest provide platforms– Attracting and targeting certain demographic groups

• Users– Both individuals and organizations

• Communities– Mutual interests and transcend familial, geographic,

and organizational boundaries

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SM User Communities

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Social Media Application Providers

• Facebook, Twitter, LinkedIn, Google

• Sponsors might pay a fee, depending on application and what they do with it

– Creating a company page free on Facebook, but ...– Charges fee to advertise to communities that “Like”

that page

• Custom developed SM for company using SharePoint for wikis, discussion board, photo sharing

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Five Components of SMIS

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SMIS Is Not Free

• Costs to develop, implement, and manage social networking procedures

• Direct labor costs for employees who contribute to and manage social networking sites

• 92% of companies use social media to recruit (93% from LinkedIn)

• 73% hired using social media, and one-third have rejected candidates because of something on their social profiles

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Q2: How Do SMIS Advance Organizational Strategy?

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• Strategy determines value chains, which determine business processes, which determine information systems.

• How do value chains determine dynamic processes and thus set SMIS requirements?

• SM process flows cannot be designed or diagrammed, they constantly change.

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SM in Value Chain Activities

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Social Media and the Sales and Marketing Activity

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• Dynamic, SM-based CRM process

• Social CRM– Each customer crafts relationship

Wikis, blogs, discussion lists, frequently asked questions, sites for user reviews and commentary, other dynamic content

– Customers search content, contribute reviews and commentary, ask questions, create user groups, etc.

– Not centered on customer lifetime value

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Social Media and Customer Service

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• Relationships emerge from joint activity, customers have as much control as companies

• Product users freely help each other solve problems

• Selling to or through developer networks most successful

– Microsoft's Most Valuable Professional (MVP) program

• Peer-to-peer support risks loss of control

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Social Media and Inbound and Outbound Logistics

• Social media can be used to provide numerous solution ideas and rapid evaluation of them

• May provide better solutions to complex supply chain problems

• Facilitates user creates content and feedback among networks needed for problem solving

• Loss of privacy a significant risk– Problem solving in front of your competitors

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Social Media and Manufacturing and Operations

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• Designing products, developing supplier relationships, and improving operational efficiencies

• Crowdsourcing – Non-employees voluntarily participate in product design

or product redesign

• Widely used in businesses-to-consumer (B2C) relationships to market products to end users

• YouTube channel and post videos of product reviews and testing, factory walk-throughs

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Social Media and Human Resources

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• Employee communications using internal personnel sites– Ex: MySite and MyProfile in SharePoint

• Used for finding employee prospects, recruiting candidates, candidate evaluation

• Place for employees to post their expertise

• Risks: – Forming erroneous conclusions about employees– Becoming defender of belief or pushing an unpopular

management message

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Q3: How Do SMIS Increase Social Capital?

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• Capital– Investment of resources for future profit

• Types of business capital

– Physical capital: produce goods and services (factories, machines, manufacturing equipment)

– Human capital: human knowledge and skills investments

– Social capital: social relations with expectation of marketplace returns

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What Is the Value of Social Capital?

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• Value of social capital Number of relationships, strength of relationships, and

resources controlled

• Adds value in four ways:1. Information2. Influence3. Social credentials4. Personal reinforcement - professional image or status

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How Do Social Networks Add Value to Businesses?

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Progressive organizations:–Maintain a presence on Facebook, LinkedIn,

Twitter, and other SN sites –Encourage customers and interested parties

to leave comments–Risk - excessively critical feedback

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Using Social Networking to Increase the Number of Relationships

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Using Social Networks to Increase the Strength of Relationships

• Strength of a relationship– Likelihood other entity (person or organization)

will do something that benefits your organization

• Write positive reviews, post pictures of you using organization’s products or services, tweet about upcoming product releases, and so on

• Organizations strengthen relationships with you by asking you to do them a favor

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Using Social Networks to Connect to Thosewith More Resources

• Social Capital = Number of Relationships × Relationship Strength × Entity Resources

• Huge network of relationships with people who have few resources may be of less value than a smaller network of relationships with people who have substantial resources

• Resources must be relevant

• Most organizations ignore value of entity assets and try to connect to more people with stronger relationships

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So What?Facebook for Organizations… and Machines

• Chatter, by salesforce.com, to connect employees and customers via social media

• Organizational communities identify and solve problems more quickly and more effectively than before

• Readily find and recruit needed experts within organization to help solve problems

• Faster project collaboration• Internal-facing communities use social media to make

organizations better

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Ethics Guide: Social Marketing? Or Lying?

• Purpose of guide: Explore ethical dimension of that danger

• How is social networking different in business than in private life?

• Do ethics vary between private and business use of social networking?

• Habits formed when using social sites may be inappropriate, harmful, or unethical when applied to business site.

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Q4: How Do (Some) Companies Earn Revenue from Social Media?

• Hyper-social organization – Use social media to transform interactions with

customers, employees, and partners into mutually satisfying relationships with them and their communities

• You Are the Product– “If you’re not paying, you’re the product.”– Renting your eyeballs to an advertiser

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Revenue Models for Social Media

• Advertising

• Pay-per-click

• Use increases value: The more people use a site, the more value it has, and the more people will visit.

• Freemium revenue model – Offers users a basic service for free, and then charges a

premium for upgrades or advanced features

• Sale of apps and virtual goods, affiliate commissions, donations

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Does Mobility Reduce Online Ad Revenue?

• By 2018, number of mobile devices is expected to reach 10 billion

• Mobile data traffic will increase eleven-fold

• Average click-through rate of smartphones is 4.12%, but just 2.39% on PCs

• Conversion rate– Frequency someone clicks on ad makes a purchase, “likes”

a site, or takes some other action desired by advertiser

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Does Mobility Reduce Online Ad Revenue? (cont'd)

• PC ad clicks more effective, on average, than mobile clicks

• Clickstream data easy to gather

• Android users far more likely to click and convert on Facebook ads than iPhone users

• Mobile devices unlikely to kill Web/social media revenue model

• How best to configure the mobile experience to obtain legitimate clicks and conversions

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Q5: How Do Organizations Develop an Effective SMIS?

• Focus on being cost leader or on product differentiation

• Industry-wide or segment focus

• Premeditated alignment of SMIS with organization’s strategy

• Next slide shows process of developing a practical plan to effectively use existing social media platforms

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Social Media Plan

Development

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Common SM Strategic Goals

Goal Description Example

Brand Awareness

Extent that users recognize a brand

Organization’s brand mentioned in a tweet

Conversion Rates

Measures the frequency that someone takes a desired action

Likes the organization’s Facebook page

Web Site TrafficQuantity, frequency, duration, and depth of visits to a Web site

Traffic from Google+ post mentioning the organization’s site

User Engagement

Extent to which users interact with a site, application, or other media

User regularly comments on organization’s LinkedIn posts

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Common SM Metrics

Goal Metrics

Brand Awareness Total Twitter followers, audience growth rate, brand mentions in SM, Klout or Kred score

Conversion Rates Click rate on your SM content, assisted social conversions

Web Site Traffic Visitor frequency rate, referral traffic from SM

User Engagement Number of SM interactions, reshares of SM content

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Q6: What Is an Enterprise Social Network (ESN)?

• ESN– Software platform uses social media to facilitate

cooperative work of people within an organization– Improve communication, collaboration, knowledge sharing,

problem solving, and decision making

• Enterprise 2.0 – Use of emergent social software platforms within

companies, or between companies, partners or customers

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Enterprise 2.0: McAffee's SLATES Model

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Changing Communication

• Communication channels within corporations changed in equally dramatic ways

– Using ESNs, employees can bypass managers and post ideas directly for CEO to read

– Quickly identify internal experts to solve unforeseen problems

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Deploying Successful Enterprise Social Networks

• Organizations still learning how to use and successfully deploy ESNs

• Develop a strategic plan for using SM internally via same process as used for external social media use

• Assess likelihood of employee resistance

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ESN Implementation Best Practices

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Q7:  How Can Organizations Address SMIS Security Concerns?

• Need a social media policy

• Consider risks from nonemployee user-generated content

• Look at risks from employee use of social media

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Managing the Risk of Employee Communication

• Develop and publicize a social media policy– Delineate employees’ rights and

responsibilities

• Intel's Three Pillars of SM Policies

1. Disclose

2. Protect

3. Use Common Sense

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Intel’s Rules of Social Media Engagement

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Managing the Risk of Inappropriate Content

• User-generated content (UGC)

• Problems From External Sources  – Junk and crackpot contributions– Inappropriate content– Unfavorable reviews– Mutinous movements

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Responding to Social Networking Problems

• Leave it

• Respond to it

• Delete it “Never wrestle with a pig;

you’ll get dirty and the pig will enjoy it.”

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Internal Risks from Social Media

• Threats to information security, increased organizational liability, and decreased employee productivity

• Directly affect ability to secure information resources

• Seemingly innocuous comments can inadvertently leak information used to secure access to organizational resources

– Not a good idea to tell everyone it’s your birthday because your date of birth (DOB) can be used to steal your identity

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Internal Risks from Social Media (cont'd)

• Employees may inadvertently increase corporate liability when they use social media

– Sexual harassment liability– Leak confidential information

• Reduced employee productivity– 64% of employees visit non-work-related Web sites

each day.– Tumblr (57%), Facebook (52%), Twitter (17%),

Instagram (11%), and SnapChat (4%)

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Q8: 2025?

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• Chief Digital Officers (CDOs) responsible for developing and managing innovative social media programs

• Integrated mobile video, augmented by Google/ Facebook’s Whammo++ Star, have many features that enable employees and teams to instantly publish ideas in blogs, wikis, videos, etc.

• BYOD

• Need to harness power of employee and partners social behavior to advance company strategy

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Q8: 2025? (cont'd)

• Emergence in context of management means loss of control of employees

– Employees craft own relationships with their employers

• Mobility + cloud + social media will create fascinating opportunities for your nonroutine cognitive skills in the next 10 years!

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Security Guide: Securing Social Recruiting

• Employees sharing personal information on SN

• Technology blurs line between work life and home life

• Work is portable and always on

• Be careful about what you say

• Work networks are not social networks

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Security Guide: Securing Social Recruiting (cont'd)

• Use communities to locate prospects

• Find potential behavior or attitude problems

• Exposing protected data illegal to use for hiring decisions

• Treat every candidate the same

• Join LinkedIn, use Google + circles

• Keep your personal social data out of publicly accessible circles

• Social media is a double-edged sword

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Guide: Developing Your Personal Brand

• College recruiters look for evidence a student has “walked the talk.”

• Social media presence only one component of a professional brand.

– Traditional sources of personal branding, like personal networks of face-to-face relationships, important.

• Understand importance and value of personal brand.

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Active Review

Q1: What is a social media information system (SMIS)?

Q2: How do SMIS advance organizational strategy?

Q3: How do SMIS increase social capital?

Q4: What roles do SMIS play in the hyper-social organization?

Q5: How do (some) companies earn revenue from social media?

Q6: How can organizations manage the risks of social media?

Q7: 2025?

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Case Study 8: Sedona Social

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• Suppose Sedona Chamber of Commerce hired you as manager of community social media

• Want you to provide advice and assistance to local businesses in development of social media sites and manage Sedona CoC’s social media presence

• Begin by making suggestions on ways their SM site could be improved

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Pink Jeep Tours

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