Social Media Marketing

Social media marketing Dr. Robin Teigland Stockholm School of Economics [email_address] www.knowledgenetworking.org www.slideshare.net/eteigland

History tends to repeat itself…. Innovation, financial crisis, industrial revolution, … Steam engine Internal combustion engine Microelectronics Late 18 th C Late 19 th C Late 20 th C Schön 2008 Third industrial revolution?

Did You Know: Shift Happens

http://www.youtube.com/watch?v=jpEnFwiqdx8

How are these trends affecting you and your organization?

Human capacity cannot keep up… Cohen & Levinthal 1989 Growth Time Information and knowledge Human absorptive capacity

6 degrees of separation Milgram 1967, DesAutels 2008

Increasing number of social media JP Allen 2009 www.webguild.org

Mahaley 2008, Merrill Lynch 1999, Beck and Wade, Prensky “ Digital Immigrants” “ Digital Natives” Work ≠ Personal Loyalty to company Learning at the desk Work = Personal Loyalty to profession Learning through “playing” The new generation is huge, 90 million people in the US alone. Already there are more of them around than there are baby boomers. Beck and Wade

Collective Intelligence Networks (CIN) http://www.pmcluster.com/NYC09.htm

Prediction markets with help of CIN http://compepi.cs.uiowa.edu/~alessio/twitter-monitor-swine-flu/ Monitoring swine flu with Twitter

Shifting sources of value

Open business model

Competitive advantage through leveraging external resources (Chesborough 2003)

Permeable organizational boundaries

Redefinition of acceptable sources of value and knowledge

Potential sources of value

Users as organizational resource (von Hippel 1988 2005)

User interactions with organizations creates value through user-generated content (Di Gangi & Wasko forthcoming)

Di Gangi 2008

Crowdsourcing: Capturing the wisdom of crowds

What is it?

Customer participation in business and business development

Why the interest?

Experience

Ownership

Engagement

Loyalty

Brayrie 2007

Leveraging external resources to find solutions and solve unsolved problems

eZ Systems and the eZ ecosystem: An open source business model eZ Partners Community Customers

#1 open source content management software

Enterprise open source – “Grow the cake”

60 Employees in 8 countries (Europe & Asia)

230+ Partners

5000+ Customers

30,000+ Community members

www.ez.no Skien, Norway

Customers of

Reshaping the marketing mix Jobber 2007

Traditional marketing vs social media marketing http://adultaddstrengths.com/2008/11/05/obama-vs-mccain-social-media/

OBAMA dot GOV

Barak

Lessig call

DesAutels 2008

From organization-generated content (OGC) to user-generated content (UGC) Content created by a user to be used by a user Content created by an organization to sell to a user Di Gangi 2008

An anthropological intro to YouTube 60 years by three US TV Networks is less than… YouTube Wesch 2008

Rapid growth of UGC Web Sites Organizations increasingly introducing UGC websites (e.g., social networking, electronic communities) as organizational resources Deloitte 2008, Di Gangi 2008

Why are organizations using UGC websites? Deloitte 2008

The Pink Community – Victoria’s Secret DesAutels 2008

Examples at Dell Brayrie 2007 Self-support Product development

Motorola Q – Creating content

Twitter at GE Healthcare

“ GE Healthcare” on LinkedIn

GE Healthcare on LinkedIn

Companies are turning to virtual worlds to facilitate creativity and innovation

Public and completely private virtual business worlds (immernets) to recruit, train, collaborate, and innovate

Accenture, Cisco, IBM, Intel, Johnson & Johnson, Motorola, Novartis, Philips, Sun, Unilever, …..

Within five years, the 3-D Internet will be as important for work as the Web is today. January 2008 By the end of 2011, 80 percent of active Internet users (and Fortune 500 enterprises) will have a “second life”, but not necessarily in Second Life. Steve Prentice Gartner

No financial crisis in VWs?

Increasing members

Increasing companies

Increasing turnover

Wonderland

Co-creating solutions for today Philips Design Group Lead-user innovation workshops

HSB is creating tomorrow’s solution while attracting employees and customers today Building the house of the future in a competition with architecture students HSB: One of Sweden’s largest real estate management companies

3D internet Before the first plate of aluminum is ever bent for production, the pilots and the passengers will have flown the plane and the crew will have serviced the plane. CEO of Boeing supplier

780,000 users USD 400 mln turnover 2007

Entropia Universe by MindArk

Ability to develop skills and sell virtual goods

Island sold for USD 26,500 in 2004

Asteroid space resort sold for USD 100,000 in 2005

Clothes Against Violence – limited edition virtual jackets sold for more than same model of real world jackets

Virtual universe with real cash economy

Fixed exchange rate to US Dollar, 1 USD = 10 PED

Five banks auctioned for USD 404,000 in 2007

Real life bank license granted by Swedish Government to MindArk Bank in March 2009

A business model like the real world

Raw materials and skills needed to build

Goods deteriorate and need to be replenished

China is making big efforts in virtual worlds!

“ Virtual economy district – a world where millions will work, communicate, and be in love”

Reaching out to the 150 mln overseas Chinese

7 million inworld at same time

Ability to borrow money to finance operations through Mind Bank

www.crd.gov.cn, www.foreignpolicy.com “ The real China is only a piece of land. We believe that there must be a China in the virtual world and the real world.” Robert Lai, Chief Scientist, CRD

What should you do in virtual worlds? Experiment, “play”, and learn Stay on the look-out Consider creating independent operations Don’t forget other emerging media

Interested in a tour? Stepping into the Internet: A tour of Second Life

Match the tool to the purpose Tool Purpose Example Blogs and microblogs Conversation Relationship building Information sharing Getting customer feedback Facebook governance Discussion forums Self-support Problem solving Customer engagement Dell Wikis Collaboration Customer engagement Motorola Q Social networking sites Community development Relationship building Customer loyalty Victoria’s Secret Jeep Virtual worlds Collaboration Innovation Engagement Nokia Philips IBM

And ensure an integrated approach

#1 Applications Lifecycle Management (ALM) & business mashup

96 of Fortune 100 as customers

800 employees in 18 countries across globe

Average employee age 4 and 27 year old company

One hour every Friday to Facebook to find fun and connect with co-workers, customers, family, and friends

YouTube, Facebook, Homepage

http://video.forbes.com/fvn/cmo/serena-social-network-strategy

Benefits and limitations of digital technologies to customers Jobber 2007 Benefits Limitations Convenience Delivery times Access to information Information overload Enhanced functionality Access to technology New products and services Security Lower prices Cost implications

Assessing digital competencies Jobber 2007

Tools for assessing your capabilities Download from: http://www.davechaffey.com/Internet-Marketing/C4-Strategy/benchmark-your-internet-marketing-strategy Chaffey 2009

Marketing audit

Customer connectivity

Percent target customers have access to the relevant digital channels

Customer channel usage

How often target customers use the digital channels

Results generated

Percent of sales transacted through a particular digital channel

Marketplace impact

How important the particular channel is for the target market

Jobber 2007

There is no one right organizational structure Example of team structure for small-medium retailer Chaffey 2009

Benefits and limitations of digital technologies to organizations Jobber 2007 Benefits Limitations Investment reduction Operational costs Reduced order costs Set-up costs Improved distribution Short-termism Opportunity for reduced selling costs High-cost content Relationship building Connective to transactional relationships Customized promotion Over-specialization New market opportunities Technological deserts Marketing research opportunities Authenticity

Are there any benefits from UGC, or is it all hype? Poole 2008: IBM Global Technical Services Knowledge Community of Practice Business Impact Survey 2007, completed by approximately 2,300 respondents

But there are challenges to UGC

Around 40% of UGC websites have more than 500 members

But few engage, i.e., contribute, retrieve, and explore UGC

Deloitte 2008, Di Gangi 2008

Important to remember Friedman 2009

Friedman 2009

Users create their own meanings Wesch 2008

There is nowhere to hide http://www.youtube.com/watch?v=t8XxcOj3Seo Fortune, Rey 2008

Monitor social media sites and react in a timely fashion Friedman 2009

Turning negative publicity into positive publicity http://www.youtube.com/watch?v=FZ1st1Vw2kY&feature=related EA Games responds on YouTube to a user’s accusation of a glitch in their game.

Who is responsible for social media? Friedman 2009

DesAutels 2008

Requisite variety is ever increasing

There is more turbulence –

Socially, economically, environmentally, technologically.

Watch out! Forces converging….

People

Net generation

Neuroplasticity

New demands

Technology

Social software (Web 2.0)

Broadband access

Mobile hardware

Business Environment

Globalization

Pace of change

Information load

Mahaley 2008

We digitized audio and video, why can’t we just digitize, you know, Earth” Philip Rosedale Chairman of the Board Linden Lab

“ I think there’s a world market for maybe five computers.” Thomas Watson, Chairman of IBM, 1943 “ There is no reason anyone would want a computer in their home.” Ken Olson, President, Chairman and Founder of Digital Equipment Corporation, 1977 “ Heavier-than-air flying machines are impossible.” Lord Kelvin, President, Royal Society, 1895

Thanks and see you in world! Karinda Rhode aka Robin Teigland [email_address] www.knowledgenetworking.org www.slideshare.net/eteigland I f you love knowledge, set it free …

Sources and acknowledgements

Allen, JP, https://usffiles.usfca.edu:443/FacStaff/jpallen/www/5thingswithcustomersv3.pdf (Accessed 24 April 2009).

Chaffey, D. 2009. Benchmarking to improve your digital marketing strategy, www.davechaffey.com/blog/ .

Deloitte, 2008. 2008 Tribalization of Business Study.

DesAutels, P. 2008. The Multinational’s Nemesis, ICIS 2008.

Di Gangi, P. 2008, The Content Web Sites, Co-Creation of Value: Exploring Engagement Behaviors in User-generated Content Web Sites, Colloquium at Florida State University College of Business

Friedman, J. 2009. Social media and MySpace case for Handelshögskolan, http://www.slideshare.net/joakimfriedman/social-media-and-myspace-case-for-handelshgskolan-090428.