Handbook of Social
Media Management
Value Chain and Business Models in
Changing Media Markets
Mike Friedrichsen
Media Business and Innovation
Series Editor:
M. Friedrichsen, Berlin, Germany
For further volumes:
Mike Friedrichsen •
Wolfgang M
uhl-Benninghaus
€
Editors
Handbook of Social
Media Management
Mike Friedrichsen
Institute for Media Business Media Business Transfer Center Berlin, Germany
Wolfgang M€uhl-Benninghaus Institute for Media and Music Science Humboldt University
Berlin, Germany
ISBN 978-3-642-28896-8 ISBN 978-3-642-28897-5 (eBook) DOI 10.1007/978-3-642-28897-5
Springer Heidelberg New York Dordrecht London
Library of Congress Control Number: 2013933243 #Springer-Verlag Berlin Heidelberg 2013
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Printed on acid-free paper
Part I Introduction
The Social Media Management Chain, How Social Media Influences
Traditional Media . . . 3 Mike Friedrichsen and Wolfgang M€uhl-Benninghaus
Part II Management with Social Media
Traditional Media Companies in the U.S. and Social Media: What’s the Strategy? . . . 9 Alan B. Albarran and Terry Moellinger
Social Media in Companies. Integrated Approach for a Social Media
Strategy . . . 25 Mike Friedrichsen
Some Economics of New Media Content Production and Consumption, and Strategic Implication for Media Companies . . . 49 Marco Gambaro
How (Social) Media Can Change “Change” in Organizations . . . 59 Holger Sievert and Astrid Nelke
Employees’ Conceptions of How Management Can Operationalize
Employee Involvement . . . 73 Stavros Georgiades
Book Industry Business, Concentration, Internet and Social Media
of Management and Marketing . . . 87 Paulo Faustino
New Venture Creation in Social Media Platform; Towards a Framework for Media Entrepreneurship . . . 125 Datis Khajeheian
New Marketing Communication in Social Media Business . . . 143 Wolfgang M€uhl-Benninghaus
Social Networks as Marketing Tools for Media Companies . . . 161 Alfonso Sa´nchez-Tabernero, Julia´n Villanueva, and Jose´ Luis Orihuela
Managing New(s) Conversations: The Role of Social Media in News
Provision and Participation . . . 179 Franc¸ois Nel and Oscar Westlund
Social Media: Managerial and Economic Opportunities
and Challenges . . . 201 Francisco J. Pe´rez-Latrel and George Tsourvakas
Part III New Value Chain with Social Media
Social Media, Aggregation and the Refashioning of Media Business
Models. . . 219 Charles Brown
How Media Companies Should Create Value: Innovation Centered
Business Models and Dynamic Capabilities . . . 239 Hans van Kranenburg and Gerrit Willem Ziggers
Media Management and Social Media Business: New Forms of Value Creation in the Context of Increasingly Interconnected Media
Applications. . . 253 Reinhard Kunz and Stefan Werning
Managing Social Media Value Networks: From Publisher (Broadcast) to User-Centric (Broadband-Narrowcast) Business Models . . . 269 Zvezdan Vukanovic
Two Faces of Growth: Linking Customer Engagement to Revenue
Streams . . . 289 Biser Zlatanov
Keys to Monetize Social Media in the Audiovisual Business . . . 311 Mo´nica Herrero and Mercedes Medina
Digital Hollywood: How Internet and Social Media Are Changing
Distributing Audiovisual Contents in the New Digital Scenario:
Multiplatform Strategies of the Main Spanish TV Networks . . . 349 Enrique Guerrero, Patricia Diego, and Alejandro Pardo
Facebook: A Business Perspective on the Power of Intelligent Networking and Social Media. . . 375 Richard A. Gershon
Multimedia Strategies for FM Radio Stations in Moscow . . . 391 Elena Vartanova, Mikhail Makeenko, and Andrei Vyrkovsky
Social Media in Russia: Its Features and Business Models . . . 405 Marianna Blinova
China’s Media Industry: Landscape and Development . . . 417 Min Hang
Part IV Forms and Content of Social Media
Social Media Strategies and Practices of Integrated
Media Companies . . . 431 Piet Bakker, Sanne Hille, and Marco van Kerkhoven
“Telekom hilft”: Customer Service in the Social Web . . . 443 Andreas H. Bock
Online Radio: A Social Media Business?. . . 455 Paul Dwyer
Platform Leadership in Online Broadcasting Markets. . . 477 Tom Evens
Ad Addressability and Personalized Content in IPTV Markets . . . 493 Christoph Fritsch
The Social Media War: Is Google+ the David to Facebook’s
Goliath? . . . 513 Richard Ganahl
Applications for the Media Sector to Leverage Content in Social
Networks . . . 533 Jochen Spangenberg and Birgit Gray
Star Management of Talent Agencies and Social Media in Korea. . . . 549 Moonhaeng Lee
Branding with Social Media at RTS . . . 591 Ste´phane Matteo, Giulia Spolaor, and Cinzia Dal Zotto
Social Television, Creative Collaboration and Television Production: The Case of the BBC’s ‘The Virtual Revolution’ . . . 603 Nicholas Nicoli
Evolution of Strategy and Commercial Relationships for Social Media Platforms: The Case of YouTube . . . 619 Sonya Yan Song and Steven S. Wildman
Part V Social Media: Impact and Users
Social Media and New Audiences as a New Challenge for Traditional
and New Media Industries . . . 635 Germa´n Arango-Forero and Sergio Roncallo-Dow
Towards a Typology of Strategies for User Involvement . . . 657 Arne H. Krumsvik
Social Media Monitoring Tools as Instruments of Strategic Issues
Management . . . 671 Johanna Gr€ublbauer and Peter Haric
Social Networks: The Question on Efficiency Remains . . . 689 Harald Rau
How to Engage the Audience? A Study on Using Twitter to Engage
Newspaper Readers . . . 703 Aldo van Weezel and Cristo´bal Benavides
Blogs and Social Media: The New Word of Mouth and its Impact
on the Reputation of Banks and on their Profitability . . . 715 Eleftheria (Roila) Christakou and George-Michael Klimis
Social Networks and Media Brands: Exploring the Effect of Media
Brands’ Perceived Social Network Usage on Audience Relationship. . . 737 Sylvia Chan-Olmsted, Moonhee Cho, and Mark Yi-Cheon Yim
Social Media Involvement Among College Students and General
Population: Implications to Media Management . . . 751 Louisa Ha and Xiao Hu
All Businesses are Media Business: The Impact of Social Media
on the Healthcare Market. . . 795 Alexander Schachinger
The Impact of Facebook on News Consumption . . . 805 Agnes Urban and Tamas Bodoky
The Usage and Advertising Effects of Social Media in China . . . 819 Li-Chuan Evelyn Mai
Part VI Conclusion
What Social Media Are Doing and Where They Are Taking Us . . . 835 Robert G. Picard
Social Media Influences Traditional Media
Mike Friedrichsen and Wolfgang Mu¨hl-Benninghaus
In the past, the opportunity to be a publisher or a broadcaster was open to a select few. Now anyone can become a global media brand. The job of finding, producing and distributing content has extended from the newsroom to the street. In some countries, traditional, mainstream media has got lazy; they stopped trying many years ago. They failed to take account of changing audience behavior.
The technology advanced and the tools were developed to enable anyone to research, create and disseminate content. And some traditional mainstream media companies—not all, but some—failed to see the significance.
And there is social media. At first there was a cacophony of noise that was hard to follow. But then those designing social media tools got smarter, and social media became more focused and personalized through tagging, lists, and other filters. The noise was reduced and meaningful communication and instant participation enabled. It empowered the individual who had a story to tell with the tools to proclaim their news to the world. But still, some traditional, mainstream media organizations failed to respond. And the audience moved away and found a new home in their preferred social networking space, where they met like-minded individuals and formed communities. Those bonds grew. Individuals who were once loan voices—sometimes heard, often ignored—became recognized. Based on the quality of the content they produced they began to gain followers through peer group recommendation. Those followers responded, added value to what was being said, and shared the information with their contacts. And with smart tagging, it all went viral. They lost touch with their audience.
And as this happened, a new middle media, made up of informed bloggers and social networkers, began to develop. These were individuals who wrote and broad-cast with authority, not because they were paid to do so, but because they had knowledge and a passion that they wanted to share with the world. Gradually,
M. Friedrichsen (*) • W. Mu¨hl-Benninghaus
Humboldt Media Business School, Humboldt University Berlin, Berlin, Germany
e-mail:[email protected]
M. Friedrichsen and W. Mu¨hl-Benninghaus (eds.),Handbook of Social Media
Management, Media Business and Innovation, DOI 10.1007/978-3-642-28897-5_1,
#Springer-Verlag Berlin Heidelberg 2013
networks began to be built; experts linking their skills and sharing information. At the same time—in some newsrooms—tired, lifeless professional journalists were rewriting news releases and handouts, or copy/pasting the news wires, publishing and broadcasting the resulting content and pretending it was journalism.
The traditional, mainstream media organizations that get it right are those that have formulated a social media strategy based on taking note of changing audi-ence behavior. For many, social media is now a central part of the newsgathering, news production and news distribution strategy. They have joined the global social media conversation and contribute to that conversation. They ask questions and answer questions, and the content they produce contains audience input which the audience trusts and, because it is about the issues that concern them, they comment, add value and share. Because of that, the media landscape will never be the same again. Traditional media that fails to recognize and respond to this on-going change is probably doomed. However, the continued growth of social media could awaken those traditional media houses that have failed in their duty to inform the public debate. It could signal the end of copy/paste journalism and result in a flourishing of vibrant people-focused journalism. Social media could go down in history as having been the resuscitator that jolted mainstream media back to life.
A few years back, one would get into the office and talk about a TV program from last night. You’d chat about a talk show host and the latest song, or having spotted the Audi or Heineken billboard on a specific highway. Traditional media ruled by relevance, content, circulation and ultimately, audience share.
Today, you are more likely to get an update on trending topics on Twitter/ Facebook or ground breaking news via one of these platforms prior to watching the late night news or reading the afternoon print edition of a newspaper or listening to radio news on the hour.
It has become easy to recognize these social tools as part of the media marketing mix, from a marketer’s perspective. But more scary is that new/social media has managed to get free air, as most shows now incorporate, or rather extend, their audience to these mediums for additional information and in the process, build stronger affiliations with their fans beyond the first media contact point, in this case TV, radio, outdoor or print.
So, taking this into consideration, traditional media houses need to start asking some questions.
– To what extent does new/social media have an impact on the long term strategic focus for traditional media houses?
– Are traditional media houses playing a role in diminishing their value and creating an audience shift phenomenon?
– Are traditional media houses seeking to find relevance to the extent that they have directly or indirectly become an ally in the process producing content that drives traffic to their future competitors?
– With diminishing newsroom expertise, and reliance on new media for content, what will be traditional media future currency be, considering readily available independently produced content?
– How best to monetize content produced by traditional media houses in these new platforms?
The battle to take pole position is evolving at the speed of light. Whilst traditional media is experiencing challenges in attracting future audiences, social media started with the same audience that traditional media disregarded and despite this, they failed to create relevance even with their current audience.
It’s unfortunate that traditional media has failed to find content that their future audience could easily identify with beyond the music shows, matric results and the career sections. While circulation and audience ratings are diminishing for tradi-tional media houses, the opposite is an hourly occurrence for new and social media. Traditional media houses are cutting costs of content production and staff, and social media has now become a source for traditional media looking for content.
Apps developers and content producers are all creating their communities in these new platforms. Even though this might differ with each type of traditional media, for print the following sections are no longer relevant to attracting new audiences: the food section, the car section, the property section, the classified section and it won’t be long until the business section and the front page have their turn too.
1
Focus of the Book
More and more we can see a continuous change from the old Media Management to new strategic, operative and normative management options. Social Media Man-agement has become an issue for every media company with a renewed “skill set”-specialized knowledge for the digital products and production and for marketing and target groups. This emerging development of media shift nowadays requires increasingly for active communication in the fundamental segments of these schol-arly disciplines. The interface of media economy/media management provides the relevant arena in this matter.
2
Main Parts of the Book
– Management with Social Media. – New Value Chain with Social Media. – Forms and Content of Social Media. – Social Media: Impact and Users.
Most of the chapters are interdisciplinary approaches. Main questions (among other) are:
– What are the main changes of business models?
– Are there new theoretical approaches? Is it possible to combine “old” and “new” theories?
– Do we have some new empirical results?
– What are the proposals for the development in this research field?
and Social Media: What’s the Strategy?
Alan B. Albarran and Terry Moellinger
Social media has existed in various forms for several decades, but came in to mainstream notoriety in the first decade of the twenty-first century with the debut of a number of sites (e.g. MySpace, Facebook, LinkedIn, YouTube, etc.) that soared in popularity and access. While still in its infancy, social media is impacting the way individuals communicate with one another and creating disruption across the media industries.
Social media has taken on greater importance by capturing the attention and interest of consumers, marketers, advertisers, and businesses. While the number of social media users changes literally by the hour, it is clear millions of people are using social media around the world. The wide adoption of social media has created more confusion and challenges for the media industries, as social media has become yet another platform to engage and interact with consumers. Media companies do not have a choice; they must now include social media as part of their overall digital strategy. But what exactly is the
strategyin adopting and utilizing social media? That is the central question driving this particular study.
Our analysis draws as its theoretical basis Chan-Olmsted’s (2006) meta-review of issues in strategic management as applied to media firms. The author notes that strategic management research as a field is relatively young, with its origins dating to the 1960s. Key authors who influenced the development of strategic management as an area of research include Chandler (1962), Porter (1980,1985), Chafee (1985), and Mintzberg et al. (1998). A more limited body of research volumes regarding strategy among media firms exists, notably an edited volume on media firms (Picard2002), and Chan-Olmsted (2008).
This chapter examines several “traditional” based media companies housed in the United States to discern how the company is utilizing social media from a strategic
A.B. Albarran (*)
University of North Texas, Denton, TX, USA
e-mail:[email protected]
T. Moellinger
North Central Texas College, Gainesville, TX, USA
M. Friedrichsen and W. Mu¨hl-Benninghaus (eds.),Handbook of Social Media
Management, Media Business and Innovation, DOI 10.1007/978-3-642-28897-5_2,
#Springer-Verlag Berlin Heidelberg 2013
perspective. The companies examined include broadcast and film conglomerates The Walt Disney Company, Viacom, News Corporation, Time Warner, and CBS; newspaper publishers The New York Times, and Gannet; and the largest public radio company in America, Cumulus. Here are the research questions guiding this study: RQ1: How are the traditional media companies addressing the strategic challenge
of developing a social media presence?
RQ2: How is social media integrated into a comprehensive digital strategy? RQ3: How is social media being monetized by these companies?
RQ4: Are new business models emerging?
Addressing these research questions required an examination of several sources including academic and business literature as well as corporate documents available in the public domain such as annual reports, SEC filings, and information on the companies’ Web sites.
1
The Challenge of Integrating Social Media
How are the traditionally media based companies in the United States addressing the strategic challenge of developing a social media presence and how they integrating social media into a comprehensive digital strategy? The first research question can be easily answered by examining Table1below, drawing the data from Web sites and platforms used by the various companies. A content analysis of each company reveals similar involvement in areas like Web sites, social media sites, video sites, Twitter, blogs, and different forms of online gaming. As seen in the table, the companies are actively engaged in several forms of social media and once can conclude that most have developed a strong social media presence.
We now take a closer individual look at the companies to address the second research question regarding how social media is part of a larger digital strategy.
1.1
Walt Disney Company
Gaming falls under the direction of Disney Interactive Media Group (DIMG). Their mission “is to deliver Disney content to fans wherever and whenever they want it, through numerous interactive platforms.” While on the surface that appears an extension of the synergy concept, the unit is also engaged in revenue generation as well, producing “console and handheld video games for the Nintendo Wii™, Nintendo DS™, Playstation® Portable, X-box 360®video game and entertainment system, [and] PLAYSTATION®3 computer game system” (Interactive Media2011, p. 1). Again, this appears to be an extension of an older Disney goal of promoting synergy within product lines and the production of a new type of brick-and-mortar product. However, the interactive division is also concerned with engaging their potential consumers in direct feedback and “user generated content” through numerous Web sites and placing both content and games on Facebook and MySpace. They have also developed interactive on-line virtual worlds such asWorld of Cars Online,Disney Club Penguin,Disney Fairies Pixie Hollow,Disney’s
Toontown Online, and Pirate of the Caribbean Online. The division also purchased
Playdom.com in 2010 which offers games on a subscription basis, to “more than 47 million monthly users” (Annual Report, DIMG2011, p. 25). Playdom has also brought Disney’s ESPN franchise into the gaming area.
In terms of Disney’s gaming revenue generation, Bob Iger, current President and CEO, stressed that the company “approached games in kind of a blended way.” While they will continue in their traditional role of providing products for console units that are linked to their entertainment programming, Iger also acknowledged the emerging use of games on all Internet-based platforms and the growing social media aspects of this use and the problems that creating a revenue stream caused. The CEO noted “there are a lot of business models out there now from free-to-play, micro transactions, subscriptions, sponsorship, box product now at multiple tiered pricing with downloadable content on the back end. And we in this group need to take advantage of every one of those revenue streams in a dynamic way to maximize our potential” (Iger2011, p. 2).
Table 1 U.S. media corporations and social media presence
Corporation
Internet Web sites
Facebook, MySpace, LinkedIn
YouTube and other
video sites Twitter Blogs Gaming
Belo √ √ √ √ √
CBS √ √ √ √ √
Cumulus √ √ √ √
Disney √ √ √ √ √ √
Gannett √ √ √ √ √
NY Times √ √ √ √ √
News Corp √ √ √ √ √
TimeWarner √ √ √ √ √ √
Viacom √ √ √ √ √ √
1.2
News Corporation
Despite their problems with the acquisition and divesting of MySpace, News Corporation has remained interested in social media and the potential of social media outlets. The company established “Slingshot Labs,” which hope to develop new Internet-based destinations and social media applications to promote new ventures and revenue streams (News Corporation Launches). News Corps’ Dow Jones operation is now using consumer reaction as noted through social media portals as an indicator of consumer confidence in the economy (Thibault2009).
The use of digital media, including social media formats, falls into line with the company’s internal vision. In the 2010 Annual Report to shareholders, Rupert Murdoch stated that “core principle” of News Corporation is that they are “a creative media company that attracts and retains customers by giving them the news and entertainment that they value” (Murdoch2010, p. 10). This vision is also directly applied to digital media, noting “as one of the leading suppliers of content worldwide, we’ve made strides in giving consumers an array of choice when it come to consuming digital content.” Peter Levinsohn, President, New Media and Digital Distribution for the Fox Filmed Entertain-ment division, also Entertain-mentions that the goal of News Corp was to build “distribution models that are both sustainable and durable over the long term” (Henderson and Horner2009, pp. 1–2). However finding both a sustainable and durable model is proving difficult for all media companies. Murdoch has stated the company will depend on advertising revenue less in the future (Murdoch2010); they are pursuing a two-tiered approach to revenue generation. While attempting to sell content, they are still dependent on advertising, with social media both supporting and promoting this effort.
News America Marketing, a division of News Corporation, began offering its advertising clients a coupon service that takes advantage of both an Internet location and Twitter notification for potential consumers (News America Marketing Upgrades 2009). News Corp as also attempted to link the viewers of their popular Fox Network properties, likeThe X Factor, with advertisers like Chevrolet on several social media sites (Fox Broadcasting Company2011) and Pepsi on YouTube (Hudson2011).
As an example to the second revenue stream, News Corporation is also attempting to sell their content, especially in the financial sector. BothMarketWatchand the
Wall Street Journalitself are now offering social media applications to be used on
Facebookand with other Internet-delivery platforms to be modeled on a subscription
revenue stream (Huston2011; MarketWatch App2009).
1.3
Viacom
Viacom uses social media to attract consumers to their Web sites especially its youth oriented asset MTV, and MTV’s popular cable programJersey Shore. Once the viewer reaches these platforms, they are greeted with top-up advertising copy and links to other related sites (which also feature advertisements) and Viacom’s promotional content. This program began in 2008 when the MTV networks acquired theFlux Social Media
popular social media sites favored by young consumers. In a further attempt to brand themselves to the youth audience, all of Viacom’s cable networks are engaged in what they term the “Take Action, Right Now” program. Each network supports group discussion and other social media techniques about issues geared toward their audience, e.g., Comedy Central’s “Address the Mess,” MTV’s “Lean to Green,” and CMT’s “One Country” and “Music for Kids” (Take Action 2001). Viacom also sponsors MTV U’s network for college students (The Number 1 Media Network2011), and President Clinton’s social media “tool” for financial aid (President Clinton Announces 2011).
Viacom’s use of social media is not limited to the youth market. During the most recent Super Bowl contest, they used Facebook and Twitter to attract people to their
“OnionSports” and “OSNGirlfriends” sites (“Onion SportsDome” Delivers 2011).
Viacom has attempted to link films produced from Paramount Pictures and Nickelodeon Movies with theme related games as an additional revenue stream (Freeplay social media game2010).
1.4
Time Warner
Joining Disney and Comcast, Time Warner believes that in a few years all television content will be available on the Internet (Levine2011). While the company claims to be “aggressively pursuing initiatives that give audiences more choice and quality at no addition cost to them” (Bewkes2011, pp. 1–2), their CEO, Jeff Bewkes also claimed that “consumers are willing to pay for high quality content,” and along with Comcast they have offered to provide visual content to their cable subscribers (LaVallee2009). Their first attempt to use the Internet as a content delivery mechanism was their creation of Pathfinder.com in 1994, However in recent years they, along with Disney and CBS, have found that mobile applications provide more revenue.The Hollywood Reporternoted an increase in mobile video revenues grew in 2010 to $46.6 million, up from $43 million in 2008 (Szalai2011). Although they were off the mark with regard to seeing the value of the Internet, Time Warner’s use of social media outlets have been limited to encouraging the display of free content, primarily news and promotions, in order to establish a presence. In addition, they have retooled their traditional Web sites to provide the look of the newer social media portals, and have invited viewer response.
The one exception is Mousebreaker, a gaming provider owned by Time Warner’s IPC Media division, which provided a football (soccer) game for Facebook users. This launch corresponded with the popular World Cup games and was aimed at the British and European markets (Gawn2010). Mousebreaker follows the precepts outlined by CEO Jeff Bewkes, that the company should pursue dual revenue streams, offering content through subscription/licenses and incorporating advertising into the presentation (Mousebreaker Ltd2011).
blog-inspired design,” and ask their users for comments and “Facebook ‘recommends’ are integrated at every level” (Andrews2010, p. 1).
Like most of the other media companies, Time Warner is attempting to make their content accessible for other Internet-delivery methods, making applications available for iPhone and iPod Touch, and feature their comments on Twitter (Andrews2010).
1.5
Columbia Broadcasting System (CBS)
CBS has maintained an Internet presence for a number of years. CBS promotes their entertainment, sports, and news programming. In addition they also feature advertising for other programs and their corporate sponsoring partners as well as advising viewers to follow the development of their favorite programs on Facebook and Twitter. CBS also actively encouraged their on-the-air personalities to use those two social networks as well as video streaming sources such as YouTube. Their use of social media sources is an attempt to draw people to their Web sites. The NCAA®
“March Madness®” (basketball tournament) on-demand site demonstrates the effectiveness of this strat-egy. Using promotions on Facebook and Twitter (along with normal fan interest) for the first day of the tournament, the site drew the largest single day traffic for a sporting event in the Internet’s history (NCAA® March Madness® 2010). In addition to providing program content and promotions, as well as advertising on the Internet, CBS’s publishing branch—Simon & Schuster—uses the Bookvideos.tv platform and social media site YouTube to feature their authors and promote the sales of their books (Simon and Schuster2007).
In addition to the use of social media to draw consumers to their advertising based Web sites, CBS has coupled local blogs, and their social media reach, with their local station, national and local advertisers, and CBS news content together in a “locally focused venture” (CBS Television Stations Launch2008). The focus on providing localized service to their advertising base as lead CBS to partner with CityGrid® Media to “provide businesses of all sizes the opportunity to be featured CBS’s two dozen co-branded television and radio Web sites across the country” (CBS teams with CityGrid®Media2011, p. 1).
1.6
The New York Times Company
strategy was needed with social media sites were demonstrated when The New York Times joined the Facebook Ads system in 2007. Although this was mostly an attempt to allow “users to learn about New York Times, Boston Globe and the Times Company’s Regional Media Group content” (McNulty2007, p. 1), and not to generate additional revenues, it did provide the entry step into social media. In addition to LinkedIn and Facebook, the Times supplies news and financial updates on Twitter, and videos on both MySpace and YouTube (Social Media Channels2011). The Times has created delivery applications for mobile platforms, like the BlackBerry, Sony Reader, the Palm Pre, Nook, Kindle, and iPhone. In addition, they have establishedbeta628, a Web site that explores new interactive projects and invites comments and suggestions (Mason2011).
While the Times generates advertising revenue through their Internet and social media presence, they have also created a second revenue source through the selling of their content online, including their popular travel section, book reviews, and crosswords. Their new “metered model will offer users free access to a set number of articles per month and then charge users when they exceed that number” (McNulty2010, p. 1).
1.7
Gannet, Inc
Like The New York Times, Gannett, the publisher of USA Today and 81 other daily newspapers (Our Company2011), has adopted “a pay for content” approach for their Internet portals. Although Craig A. Dubow, the former CEO of Gannett admitted that they are looking at “different prices for different content models,” and sustainability of any model is an important determination, the company is convinced that “consumers value our content and are absolutely willing to pay for it” (Dubow2010, pp. 2–3). In addition to charging readers for content, Gannett is actively engaged in providing businesses with advertising linked to these sites, creating additional revenue streams. Gannett’s on-line solicitations mention their ability to present advertising messages “across a wide-range of platforms” (Our Marketing Solutions2011, p. 1), including print, television stations, and Web sites “that reach 52 million unique users monthly” (Our Company2011, p. 1). Dubow stated: “Central to these efforts is the idea that consumers will always seek relevant content and advertisers need to connect to those consumers” (Dubow2008, p. 2).
Recognizing the potential of digital media, Gannett acquired social media outlet Ripple6 in 2008, (Gannett acquires2008), and a year latter established a digital media network by incorporating such offerings as MomsLikeMe.com, HighSchoolSports. net, Metromix.com featuring local entertainment needs, andBNQTfocusing on action and extreme sports, to their digital mix. Along with their Web portals, PointRoll, Ripple6 and ShopLocal, these sites were designed to support the company’s local news offering and promote local advertising, thus adding “localism” as a third pillar to Gannett’s revenue growth (Gannett Announces Formation2009). In addition, they have HistoryBeat.com to serve people interested in local history into a potential consumer base (Gannett Digital Media Network partners2009).
Social media plays a substantial part in Gannett’s strategic vision, claiming that 2009 was “a breakout year for digital content—from apps to tablets to social media.” CEO Dubow said “We are putting a significant amount of time and energy into social media to further engage with our viewers and our readers” (Dubow2010, pp. 1–2). In addition to supporting their Internet and local media offerings, Gannett also uses social media, especially Facebook and Twitter, to deliver local content and keep their audiences informed of emergency situations (Social media: Essential tools2011).
1.8
Cumulus
With the 2011 acquisition of Citadel Broadcasting Corporation, Cumulus Media is the largest public radio company in the United States, with 570 stations in 120 markets (Hannan2011). The financial operation of the company would be classified as a traditional advertising based model with each station responsible for, and judged on, the generation of sales revenue. Cumulus views their other media forms—primarily local television and newspapers—as their primary competition, and each station approaches their potential clients with the sentiment that “no media reaches more people more often for less” (Radio is the most cost-effective2011, p. 1). Focusing on local advertisers, their sales force also discounts the Internet, and social media, as an expensive, too technologically complex, and unnecessary means of attracting customers. They argue that advertisers should “focus on building community, not on winning the search game” (Local Business. . .Untangle the Web2011, p. 1). However, their local radio stations, reflecting a need to attract listeners, have embraced the Internet and many of their over-the-air personalities maintain Facebook pages and contribute information through Twitter and Blogs. Like the other media concerns, the individual stations, while constructed to appeal to their listeners tastes— sports information, talk radio issues, popular music personalities and upcoming events— also feature advertising copy and links. Although Cumulus has not constructed a potential revenue stream for social media, on an indirect level it does use a form of social media to enhance their revenue. They offer advertising clients an in-house newsletter designed to focus on both national and local economic trends. This newsletter is available on a subscription basis and distributed as both an email and a blog (Subscribe2011).
1.9
Belo Corporation
Belo Corp. owns and operates 20 television stations, two regional cable news channels, two local cable news channels and manages two others, and operates 30 Web sites. The company had 2009 annual revenue of $590 million, and employs 2,300 (Belo Fact Sheet 2011). In attracting advertising clients, they contend “the majority of Belo television stations are the most-watched stations in their markets” (Belo Advertising2011, p. 1).
highlighted by 57 up-to-the minute weather radars.” Their on-the-air personalities, both anchors and reporters, are also encouraged to maintain an Internet presence. Of their 32 reporters/anchors, sports reporters, and weather forecasters, 19 have individual Facebook pages, 20 use Twitter, and all have an Internet page linked to the station’s Web site. The station also provides mobile applications which receive “6 million page views per month” (WFAA Advertising2011, p. 1). In addition to their local classified section, clients can place copy directly within the site, and link their own Web site to their advertising. Belo reached an agreement with Yahoo that “expands the audience reach that Belo stations can deliver to advertisers” (Television Company Belo Corp. Expands 2011, p. 1). Belo’s use of social media is directed to support this traditional advertising model. In addition to posting videos on YouTube, all of their on-air personalities—news, sports, weather, traffic and special features/assignments—have a Facebook page and most are active in presenting a blog, and using Twitter.
In analyzing the integration of a social media strategy by these U. S. based companies we observe some similarities but many more differences. Some companies have a clearly defined strategy, while others are in various stages of development. Large conglomerates, as would be expected, are more engaged in a variety of social media activities and recognize the importance of monetizing their efforts. Print-dominated companies are perhaps a bit more limited in their use of social media, constantly using it to drive back to their main product lines. Smaller companies like Belo have a discernable strategy built around localism and news personalities. Table 2offers some key quotes related to a strategy for social media activities from selected companies.
As Rupert Murdoch indicates all the media companies are attempting to place themselves in a position to “drive history,” at least in terms of establishing a successful business model for the digital marketplace. They recognize social media is an important tool. However, finding the appropriate revenue generating combinations using social media has proven difficult. As Jeff Bewkes of Time Warner indicates this approach needs to be exactly that, a combination. Further, at least for the near future, advertising exposure needs to be an element in constructing a model. As Craig A. Dubow of Gannett and the press release from The New York Times indicate, social media is important not only to engage their readers and establish a corporate presence, but also drives these same readers to corporate Web sites where content can be purchased and advertisements viewed. The Times press release also mentions the power of the Internet as a tool to distribute content, and most of these companies have developed applications that are used on mobile platforms.
2
Monetizing Social Media
Regarding the third research question, no company has completely formed a successful model for producing revenue using social media. Most companies are looking at tradi-tional methods to measure activity, namely the number of hits and their growth over time. Dubow of Gannett explains that “USA Today and our local sites served more than 1.6 billion mobile page views, that’s up 267 %,” in their 2010 Annual Report, (Dubow2010). Some companies are attempting to measure success in terms of bottom-line revenue, but social media is not yet broken out but embedded within other revenue segments. A good example is CBS. The company generated advertising revenue of $2.21 billion for the first quarter of 2011, but does not reveal what percentage is contributed by digital platforms like social media. Likewise they report “content licensing and distribution” category of $889 million, yet it is unclear if this includes their locally focused advertisement venture along with station fees (Consolidated and Segment Statement2011).
Both Gannett and Disney have created a “digital” or “interactive media” segment. In 2010 Gannett reported net operating revenue of $618,259,000 for their digital segment (Consolidated Statement2011). This led former CEO Dubow to observe: “We are seeing tremendous growth with digital, which make up 20 % of our revenue in
Table 2 Observations on social media as part of a digital strategy
Corporation Key quote/reference
News Corporation
From the wheel to the Web, from the printing press to fiber optic cable, it has always been technology that has driven history. Those in the driving seat have always been those who fully understood and used that technology—Rupert
Murdoch, CEO (2006, p. 5).
Time Warner Today, there is widespread acknowledgement among content providers that
free-ad-supported Web sites cannot replace powerful dual revenue stream business
models—Jeff Bewkes, CEO (2011, pp. 1–2).
Gannett We are putting a significant amount of time and energy into social media to
further engage with our viewers and our readers—Craig A. Dubow, CEO (2010,
pp. 2–3).
New York Times
The linkage of content and social media “give us the opportunity to distribute NYTimes.com content to a very engaged readership and a viral distribution
platform”—New York TimesPress Release (McNulty2007, p. 1).
New York Times
We are challenging out talented staff and our community of users to publish ideas and concepts that can create a better online experience—Marc Frons, Chief
Technology Officer,The New York Times(McNulty2010, p. 1).
CBS The CBS Local Ad Network, [is] a first-of-its-kind partnership between a major
media company’s television stations and local bloggers and social media Web
sites—CBS Press Release (CBS Television Stations Launch2008, p. 1).
Viacom It is only natural to extend our interactive marketing to a social media game—
Amy Powell, Viacom Spokesperson (Freeplay social media game2010, p. 1).
Disney There are a lot of business models out there now from free-to-play, micro
transactions, subscriptions, sponsorship, box product now at multiple tiered pricing with downloadable content on the back end. And we in this group need to take advantage of every one of those revenue streams in a dynamic way to
the first quarter of this year” (Dubow2010). On the other hand, while Disney reported $761,000, when adjusted for operating expenses this total became ($234,000) for 2010. However, it is uncertain if their gaming operations fall into this category or their consumer products one which showed adjusted revenue of $677,000 (Summary Financial Highlights2011).
What can be discerned is that media companies are beginning to monetize their social media efforts. All but one company (Cumulus) is using their social media platforms to direct their listeners to Web sites designed to promote revenue. The most direct revenue stream related to monetization remains advertising; primarily used to drive consumers to Web sites promoting various products and/or services.
The second revenue stream observed is with media content. One avenue is the promotion of an entertainment or informational product with the hope that the reader/ viewer will later access the content through one of its platforms. Closely linked with this effort is an attempt to get the consumer to make a purchase entertainment, such as a movie, television program, music, book or other print product—by downloading the product online or making a traditional purchase via a retailer or other vendor. Some Web sites, especially those associated with print and newspaper providers, also attempt to encourage readers/viewers to purchase content either through subscription or as a metered model.
The only media company in this analysis that does not yet use social media to direct people to their Web site is radio giant Cumulus. They see locally based advertising as their primary revenue stream. Cumulus does use a form of social media to support a secondary stream, by offing advertising clients informational blogs in support of an in-house newsletter that is offered on a subscription basis. Along with the dual revenue approach adopted by most media companies, Disney, Time Warner, and Viacom use social media gaming to both promote entertainment programs and as a revenue source, providing games through downloads, subscriptions, or brick-and-mortar retailers.
Figure1illustrates how the American media companies in this study are using social media in their revenue generating strategies. Social media sites, blogs, and gaming platforms (where utilized) are used to drive audience traffic to company digital platforms and Web sites. At these locations, consumers are exposed to various forms of advertising messages, subscription offers, and the opportunity to purchase a product or service.
3
Are New Business Model Emerging?
Based on this initial analysis of nine traditionally-oriented media companies based in the United States, there is no evidence of any new business model emerging regarding social media. At this early stage, monetization of social media is happening primarily through traditional advertising, and that is limited. Further, the revenues are apparently so small that no company breaks out the exact contribution of social media income to their total revenues.
• Location Based Services (LBS). These services utilize a consumer’s location (usually through GPS capabilities) to track customers as they enter restaurants, retail establishments, and other places of business. Foursquare is an early leader in this nascent industry. As customers “check-in” their location, customers can receive coupons and other discounts on their mobile phone. While Foursquare and similar services raise privacy concerns for some, many consumers will likely ignore the problem in order to receive promotional discounts. LBS services will help grow digital advertising, and also encourage and promote more point-of-sale shopping. • Mobile Broadcast Video. In the United States, several mainstream television operators
crated the Open Mobile Video Coalition in 2007 to promote the development of mobile television for portable devices. Testing has already begun in Washington, D. C., with other markets to follow. The debut of full-motion, live broadcast television on mobile devices is a short time away, opening the opportunities to engage social media efforts with live video and generate new revenue streams.
• Social Media Marketing. We know that social media offers new ways to promote and market products to both audiences and advertisers. Many retailers from different industries are just now experimenting with social media marketing. Small businesses at the local level have for the most part not at all engaged a social media marketing effort as yet. The potential of more business owners—whether large or small— adopting a social media marketing effort over the next 3 years is quite large. In fact, BIA/Kelsey predicts that social media advertising will reach $8.3 billion in the U. S. by 2015 (Wasserman2011).
• Networks of Networks. One other area of expected growth and potential new business model is the ability of companies to harness data from individuals engaging social media via their network with those networks established by friends. An extension of database marketing, it will one day be possible for companies to leverage their network of networks to promote, market, and engage audiences. This is happening now as
Social Media: Facebook
Twitter Blogs Gaming
Drives audiences to digital platforms and
web sites
Consumers exposed to advertising messages, subscription offers,
purchase options
research companies are “mining” data generated by social media sites; it will only become more sophisticated and more targeted moving forward.
These four areas appear to show promise as to where new business models may emerge, although we won’t speculate as to what these new models may look like. Ultimately, the marketplace will determine what new models prove the most effective.
Conclusion
This study sought to explain how social media is being used strategically by nine different traditional-based media companies in the United States. The sample of companies selected for analysis ranged from large multidivisional conglomerates (e.g., News Corporation, Time Warner, Disney, Viacom, CBS) to print-based companies (New York Times and Gannett) to television (Belo Corp.) and radio (Cumulus).
All of the companies are engaged in a social media strategy with varying levels of development with the exception of Cumulus, which is minimally involved in a social media strategy. The companies do recognize the importance of social media, and are actively integrating social media across their digital platforms. Each company was individually analyzed to offer a complete picture of their efforts.
Many companies are attempting to monetize their social media activities, but at this early stage of development it is not possible to determine exactly what percentage social media revenues contribute to total revenues. By all estimates, it appears to be small yet all companies believe that social media revenues will grow over time, as does industry analysts like BIA/Kelsey (Wasserman2011).
No evidence of new business models is yet present in the young marketplace for social media. However, several new applications and options in development (e.g., location based services, mobile video, expanded marketing, and network analysis) hold promise for growth.
This is an area where more research over time will be needed to understand the evolving marketplace in which social media operates, and how these traditional companies continue to adapt and grow. This analysis was limited in scope by the focus on a handful of companies representing one continent, and was also examined at a time when recessionary pressures were still being felt along with a muted business climate. The findings nevertheless will hopefully spur more research in to the discussion of understanding how traditional-based media companies adopt and integrate social media, leading to increased knowledge of the best practices and models to use to maximize revenues and a competitive strategic advantage.
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Approach for a Social Media Strategy
Mike Friedrichsen
1
Introduction
For commercial enterprises, the emerging set of new technologies and forms of communication in social media are leading to a whole new channel of interaction with customers, partners and employees. Given that 39 % of the fastest growing companies in the US have implemented e.g. blogging compared to only 11.6 % of Fortune 500 companies (Barnes and Mattson2008), it cannot be ignored that social media can offer businesses a competitive edge. Today the potential of customer contributions and recommendations for products and services is more highly valued than ever before. In fact, Gartner estimates the amount of money spent annually on enterprise social software—also referred to as “Enterprise 2.0” by McAfee (2006)—will reach 1.06 billion US dollars by 2012 (Gibson 2009, eWeek, 26, p. 16). By definition, concepts like microblogging and social networks require unique communications and knowledge in addition to traditional advertisement strategies.
The aim of this chapter is to give in introduction on social networks and to contain a non-industry specific framework for social media that assists in identifying touch points and business objectives.
The first part of this chapter characterizes social networks. Since online social networks are a key highlight of the social media landscape, theories, models and analytic methods of social network research have to be considered. In particular, this includes an analysis of social networks and the exchange of information within them. The transition of the existing concepts of relationship marketing combined with social media in an enterprise environment is investigated the main part of this paper. In conjunction with feasible measurements, a definition of contact points for
M. Friedrichsen (*)
Humboldt Media Business School, Berlin, Germany
Stuttgart Media University, Stuttgart, Germany
e-mail:[email protected]
M. Friedrichsen and W. Mu¨hl-Benninghaus (eds.),Handbook of Social Media
Management, Media Business and Innovation, DOI 10.1007/978-3-642-28897-5_3,
#Springer-Verlag Berlin Heidelberg 2013
the implementation of social software derived from relationship marketing paradigms is also provided here. Within this conjunction a model termed as social media management chain is developed.
2
Social Networks
In existing relationships, social networks are vital for the exchange of resources such as information, an essential concept of social media.
“When a computer network connects people or organizations, it is a social network. Just as a computer network is a set of machines connected by a set of cables, a social network is a set of people (or organizations or other social entities) connected by a set of social relations,
such as friendship, co-working, or information exchange.” (Garton et al.1997)
The termsocial networkwas coined by Barnes (1954; cited by Wasserman and Faust1994), who described it as nodes representing social entities (e.g. individuals or departments of an organization), which in turn are denoted as actors. Social relationships are linked by ties including interactive, political and economical relationships between pairs of actors.
The real-world networks present in a wide range of application fields are described by Baraba´si (2003). These networks are established by nodes and directed or undirected links between pairs of nodes. In the case of undirected links, the degree of a node indicates the number of links connected to that node, whereas the concepts of in-degree and out-degree describe the same characteristic for a node in a network composed of directed links. A path in the network determines a sequence of nodes connected by links. The distance between two nodes is defined as the number of nodes on the shortest path connecting these nodes (Harary1967).
Baraba´si and Albert (1999) used the term “scale-free networks” to describe large real-world networks. Scale-free networks, like the World Wide Web, consist of a few nodes with a comparatively high degree of termed hubs and a large number of nodes with a small degree resulting from the preferential attachment of links to nodes that already show a large number of incoming links. Social networks can be characterized as scale-free networks based on links between individuals within a community who know each other. Large interpersonal networks are scale-free since there are particular individuals in the network who are more favored by others and thus more frequently connected to due to specific social relationships (Lehel2007, p. 36).
2.1
Social Network Analysis
Social network analysis (SNA) is an interdisciplinary research field that is based on the assumption of the importance of relationships among interacting units. The social network perspective encompasses theories, models, and applications which are expressed in terms of relational concepts or processes. Along with a growing interest and the increased use of network analysis, a consensus has arisen on the central principles underlying the network perspective. In addition to the use of relational concepts, the following aspects can be noted as relevant:
• Actors and their actions are viewed as interdependent rather than independent, autonomous units.
• Relational ties (linkages) between actors are channels for the transfer or “flow” of resources (either material or immaterial).
• Network models focusing on individuals view the structural network environ-ment as a provider of opportunities for or constraints on individual action. • Network models conceptualize structure (social, economic, political, etc.) as
lasting patterns of relations among actors.
The unit of analysis in network analysis is not the individual person, but an entity consisting of a “collection” of individuals and the links between them. Network methods focus on dyads (two actors and their ties), triads (three actors and their ties) or larger systems (subgroups of individuals or entire networks) (Gretzel 2001; Wasserman and Faust1994).
Wasserman and Faust (1994, p. 21) state that social network analysis can be characterized as a “generalization of standard data analytics techniques and applied statistics” since mathematical models are used to formalize metaphorical terms like popularity, social position and isolation. Mitchell (1969) defines three the levels, frequency, intensity and durability, to define the quality of interpersonal relationships, which are also subject to social network analysis. The social relationships of an interpersonal network can be visualized by a sociogram, a chart that plots the structure of interpersonal relations (Moreno1937).
The vertices here represent actors and edges denote the ties between them. The two-dimensional sociogram shown in Fig.1presents a group of six individuals in an interpersonal network. Arrows indicate ties between these individuals. The size of each node depends on the quantity of degrees and in-degrees. There are a number of alternatives available when creating such illustrations with sociograms (e.g. computer-generated types with a three-dimensional perspective) thanks to further developments (Freeman2000).
