A Social Strategy

A Social Strategy: How We Profit from Social Media

MIKOŁAJ JAN PISKORSKI
Copyright Date: 2014
Edition: STU - Student edition
Pages: 288
https://www.jstor.org/stable/j.ctt6wpzxq
  • Cite this Item
  • Book Info
    A Social Strategy
    Book Description:

    Almost no one had heard of social media a decade ago, but today websites such as Facebook, Twitter, and LinkedIn have more than 1 billion users and account for almost 25 percent of Internet use. Practically overnight, social media seems indispensable to our lives--from friendship and dating to news and business.

    What makes social media so different from traditional media? Answering that question is the key to making social media work for any business, argues Mikołaj Piskorski, one of the world's leading experts on the business of social media. InA Social Strategy, he provides the most convincing answer yet, one backed by original research, data, and case studies from companies such as Nike and American Express.

    Drawing on his analysis of proprietary data from social media sites, Piskorski argues that the secret of successful ones is that they allow people to fulfill social needs that either can't be met offline or can be met only at much greater cost. This insight provides the key to how companies can leverage social platforms to create a sustainable competitive advantage. Companies need to help people interact with each other before they will promote products to their friends or help companies in other ways. Done right, a company's social media should benefit customers and the firm. Piskorski calls this "a social strategy," and he describes how companies such as Yelp and Zynga have done it.

    Groundbreaking and important,A Social Strategyprovides not only a story- and data-driven explanation for the explosion of social media but also an invaluable, concrete road map for any company that wants to tap the marketing potential of this remarkable phenomenon.

    eISBN: 978-1-4008-5002-0
    Subjects: Business, Marketing & Advertising, Technology

Table of Contents

  1. Front Matter
    (pp. I-IV)
  2. Table of Contents
    (pp. V-VI)
  3. PREFACE
    (pp. VII-XII)
  4. CHAPTER 1 The Arc of the Book
    (pp. 1-8)

    Why do some social platforms flourish while others die? What is a social strategy, and what distinguishes a strong social strategy from a weak one? To begin to examine these concepts in depth step back for a moment and consider the meteoric rise of online social platforms. The first set of dedicated online social platforms launched in 1995 when Classmates made its appearance, and then SixDegrees followed in 1997. Neither gained significant traction, and both closed quickly. Then, when Friendster launched in 2003, followed by MySpace and Facebook, the social revolution stormed the Internet. By the time this book was...

  5. CHAPTER 2 Social Failures and Social Solutions
    (pp. 9-24)

    Every insight, suggestion, and lesson in this book hinges on the concept of social failures. Social failures are interactions that donotoccur, but would make two people better off if they did. Some failures entail being unable to meet strangers, such as a potential spouse or a hobby buddy. These are the “meet” social failures. Others entail failed interactions within existing relationships. These are the “friend” social failures. These failures include inability to discuss everyday matters, give psychosocial support to each other, convey affect, or simply display certain information without having to engage in a conversation.

    Social failures arise...

  6. CHAPTER 3 “Meet” Solutions: eHarmony and OkCupid
    (pp. 25-48)

    To see the ideas outlined in chapter 2 in action and test their merit, consider the world of online dating platforms. Market demand for such services is huge. In the United States in 2010, for example, there were roughly 90 million unmarried Americans 18 years or older and 40 million of those considered themselves active daters. Roughly 30 percent of people 35 to 44 years of age were unmarried, and 17 percent of all unmarried people were 65 years or older.

    To meet this demand, thousands of online dating sites have emerged since the mid-1990s, giving their users unrestricted search...

  7. CHAPTER 4 “Meet” Solution: Twitter
    (pp. 49-67)

    In this chapter we continue to test the key predictions of the framework, but do so in the context of a “meet” solution that allows for public interaction between strangers.

    As I outlined in chapter 2, such interaction offers unique advantages as compared to private interaction in that it helps third parties join conversations with ease. At the same time, public interaction is fraught with interaction costs, particularly when a public interaction between strangers derails and everyone can observe this. People might refrain from public interactions in anticipation of these costs, and if they forecast such costs incorrectly, social failures...

  8. CHAPTER 5 “Friend” Solutions: Facebook and mixi
    (pp. 68-89)

    In chapter 2, we introduced a general framework for understanding social failures and social solutions, and in chapters 3 and 4 explored it in detail in the context of meeting strangers. In this chapter, we examine “friend” social failures and solutions that arise when interacting with people we know. To do that, we examine various interaction costs that arise in such relationships and consider them in the now-familiar categories of breadth, display, search, and communication. For each category, we examine how to build functionalities to address interaction costs, examine the kinds of strategic trade-offs that arise in building these functionalities,...

  9. CHAPTER 6 “Meet” and “Friend” Solutions: LinkedIn and Friendster
    (pp. 90-119)

    Having examined the characteristics of platforms that entail only “meet” or “friend” solutions, we now turn to more complex platforms that feature both “meet” and “friend” solutions, using LinkedIn and Friendster as examples. To set the stage for considering dual-solution platforms, it helps to recall table 1.1 from chapter 1, reproduced here as table 6.1. The vertical dimension denotes all of the “meet” solutions we have studied, and examines differences between them. The horizontal dimension denotes the two “meet” solutions we studied.

    Since LinkedIn went through a transformation in the summer of 2005, I will start by describing LinkedIn’s breadth,...

  10. CHAPTER 7 “Meet” and “Friend” Solution: MySpace
    (pp. 120-136)

    MySpace is the last platform well examine in the first part of this book. Here is the essential background: Chris DeWolfe and Tom Anderson founded the site in 2003 in Los Angeles. The two had already started an Internet marketing business that sold lists of email addresses to other companies for direct marketing. But when that company was acquired by eUniverse in 2002, DeWolfe and Anderson sought a new venture, eventually developing MySpace, which became publicly available in January 2004.

    Within the first twenty months of its launch, MySpace had acquired 20 million members. During that period of growth, in...

  11. CHAPTER 8 Social Strategies
    (pp. 137-150)

    With this chapter, we shift our focus from understanding how to build a well-functioning social platform to understanding how a firm that produces economic goods can benefit from such platforms. To do that, I will introduce a framework that I developed by applying the insights in the first part of the book to the experiences of more than sixty companies that have tried to leverage online social platforms for economic gain. These companies span a wide spectrum of industries, from manufacturing through consumer-packaged goods to services and consumer finance. I have also employed the framework in a number of paid...

  12. CHAPTER 9 Social Strategy at Zynga
    (pp. 151-169)

    In this chapter we will focus on a low-cost “friend” strategy in the context of a set of social gaming companies. Specifically, we draw on qualitative data describing Zynga’s strategy and combine them with quantitative insights from publicly available industrywide surveys undertaken by Information Solutions Group, and user behavior data from one of Zynga’s competitors (the competitor elected to remain anonymous). Zynga chose not to provide any quantitative data for this book.

    Casual social games were first developed by companies in Asia in the mid-2000s. These games eschewed a focus on destroying enemies in favor of encouraging players to build,...

  13. CHAPTER 10 Social Strategy at Yelp
    (pp. 170-183)

    To illustrate a low-cost “meet” social strategy, we will examine Yelp, a U.S.-based website that boasts more than twenty-seven million reviews of businesses—such as restaurants, shops and beauty salons—that are written by a cadre of volunteers. I documented this strategy through qualitative analysis of Yelp’s choices and interview data with Yelp contributors. In addition, I relied on quantitative data on the contribution patterns of almost 8,000 volunteer reviewers between 2004 and 2012 in the Boston area that I collected online. To obtain a baseline, I collected the contribution patterns of almost 20,000 volunteers posting on TripAdvisor, a site...

  14. CHAPTER 11 Social Strategy at American Express
    (pp. 184-204)

    In the previous two chapters, we examined how start-ups have used social strategies to gain competitive advantage over organizations that do not have social strategies. This chapter examines how large and established firms integrate social strategies into their overall business strategy to improve competitive advantage. The chapter will review the two types of social strategies we reviewed so far, and introduce a new one—creating a higher willingness to pay, while helping people meet—using American Express as an example.

    American Express’s history dates back to about 1850, when it was in the business of transporting goods, currency, and other...

  15. CHAPTER 12 Social Strategy at Nike
    (pp. 205-219)

    Nike is a publicly traded clothing, footwear, sportswear, and equipment producer and one of the top ten advertisers in the United States. The company’s overall marketing budget, as of 2012, stood at more than $2.5 billion. Importantly, a few years prior, Nike started reallocating much of that massive expenditure away from TV and print toward digital and social marketing. In fact, between 2009 and 2012, the company cut traditional media expenditures by 40 percent, and allocated more than eight hundred million dollars to digital and social marketing—more than any other U.S.-based advertiser.

    Most of this chapter will document what...

  16. CHAPTER 13 Building Social Strategy at XCard and Harvard Business Review
    (pp. 220-248)

    When we studied Zynga and Yelp, we examined companies that built social strategy into their operations right from the inception. We spent very little time, however, thinking about how these companiesdevelopedtheir social strategies. Then we looked at American Express and Nike, where we traced processes of organic experimentation that allowed these companies to transition from a purely digital strategy to a combination of digital and social strategies. American Express and Nike both engaged in lengthy processes of building their social strategies, which may lead many readers to ask: I already have a digital strategy, but I don’t have...

  17. CHAPTER 14 Conclusions
    (pp. 249-256)

    We began by considering the choices LinkedIn faced in 2005, and we discovered pretty quickly that to understand the implications of each choice we needed to identify some underlying social failures and the kinds of solutions that LinkedIn could provide to those failures, which led us to the concept of social strategy.

    There is very little doubt in my mind that at this point, readers will be able to revisit LinkedIn’s dilemma and offer much more robust input than they could previously. More importantly, I hope that the foregoing chapters have also been helpful in developing a more general set...

  18. ACKNOWLEDGMENTS
    (pp. 257-258)
  19. NOTES
    (pp. 259-262)
  20. REFERENCES
    (pp. 263-266)
  21. INDEX
    (pp. 267-275)