Identifying theories and underlying principles of global Marketspace

Global marketspace and Virtual networking:

Web 2.0 Revolution

Reading: Shah, N 2008, From global village to global marketplace: Metaphorical descriptions of the global Internet. International Journal of Media & Cultural Politics, Vol. 4. No. 1,pp. 9-26.

INB 20009 Managing the Global Marketplace

Lesson plan • From global village to global marketspace

• Social Media, Web 2.0 and User Generated Content • Social presence theory & social processes (self-identity and

self-expression)

• Social media and the global marketspace

• Challenges and opportunities of Social Media platforms in the global marketspace

PART 1

CONCEPTS

From global village to global marketspace

• The Internet has become a powerful symbol of

globalisation.

• There are two of the most prominent metaphors

associated with the internet enabled globalisation;

(1) the global village

(2) the global marketspace

Global Village

• During 1980-early 1990s, global communication transcended the differences between cultures and societies to create a new global village where people will come together and work towards mutual trust and understanding (Dodge and Kitchin 1998: 33).

• The Internet’s ability to transcend the barriers of space and time and enhance individual interaction was considered the cutting edge of globalisation.

• Shah (2008) argued that the Internet’s contribution to political transformation is not simply a function of its hardware and technical specifications.

• In a global marketspace, states had to abandon their national economic

autonomy.

• Subsequently, although public management had once been closely tied

to the state, private sector markets, market actors, non-governmental

organisations, multinational actors and other institutions [could] exercise

forms of legitimate authority.

• So that the ‘Internet would grow as a seamless . . . global marketspace

where competition and consumer choice are the main drivers of

economic activity.

Global Marketspace

Setting the scene • Facebook registered more than 175 million

active users in 2009. This is only slightly less than the population of Brazil (190 million) and over twice the population of Germany (80 million)! As of the third quarter of 2018, Facebook had 2.27 billion monthly active users.

• Every minute, 10 hours of content were uploaded to the video sharing platform YouTube. And, the image hosting site Flickr provided access to over 3 billion photographs. This makes the world-famous Louvre Museum's collection of 300,000 objects seem tiny in comparison.

• According to Forrester Research, 75% of Internet surfers used “Social Media” in the second quarter of 2008 by joining social networks, reading blogs, or contributing reviews to shopping sites.

•The very first YouTube video was uploaded on 23 April 2005.

•The total number of people who use YouTube – 1,300,000,000.

•300 hours of video are uploaded to YouTube every minute!

•Almost 5 billion videos are watched on Youtube every single

day.

•YouTube gets over 30 million visitors per day

•In an average month, 8 out of 10 18-49 year-olds watch

YouTube.

•By 2025, half of the viewers under 32 will not subscribe to a

pay-TV service.

•6 out of 10 people prefer online video platforms to live TV

•The total number of hours of video watched on YouTube each

month – 3.25 billion.

•10,113 Youtube videos generated over 1 billion views.

•80% of YouTube’s views are from outside of the U.S.

•The average number of mobile YouTube video views per day is

1,000,000,000

•The average mobile viewing session lasts more than 40

minutes. This is up with more than 50% year-over-year.

•Female users are 38% and male users are 62%.

•User Percentage by Age 18-24 – 11%, 25-34 – 23%, 35-44 – 26%,

45-54 – 16%, 50-64 – 8%, 65+ – 3%, unknown age – 14%.

•More than half of YouTube views come from mobile devices.

•YouTube’s mobile revenue is up to 2x y/y.

•YouTube overall and even YouTube on mobile alone reaches

more 18-34 and 18-49 year-olds than any cable network in the

U.S.

•The number of hours people spend watching videos (aka watch

time) on YouTube is up 60% year-over-year, the fastest growth

we’ve seen in 2 years.

•You can navigate YouTube in a total of 76 different languages

(covering 95% of the Internet population).

•YouTube has launched local versions in more than 88

countries.

•9% of U.S small businesses use Youtube

Evolution of media platforms

(Source: idfive.com, 2011) Clay Shirky: How social media can make history

Conversation Prism

(Source: Solis and Thomas, 2008)

What is Social Media—And what is it not?

• How Social Media differ from the seemingly-interchangeable related concepts of Web 2.0 and User Generated Content?

• Web 2.0 is a term that was first used in 2004 to describe a new way in which software developers and end-users started to utilize the World Wide Web.

• Applications such as personal and company web pages (content publishing) belong to the era of Web 1.0.

• Web 2.0 is a platform whereby content and applications are no longer created and published by individuals, but instead are continuously modified by all users in a participatory and collaborative fashion (e.g., blogs, wikis, and collaborative projects in Web 2.0).

• User Generated Content (UGC) can be seen as the sum of all ways in which people make use of Social Media

“Open Diary/weblog” (Bruce and Susan

Abelson)

Blog/weblog MySpace(2003)

Facebook(2004) Social Media

Web 2.0…contd • Technologies contributing to a socially connected Web where

everyone is able to add to and edit content.

Concepts and theory bridge

Concepts Description Theoretical

underpinnings

Social Media

(Web 2.0, User

Generated Content

(UGC))

A group of Internet-

based applications that

build on the ideological

and technological

foundations of Web 2.0,

and that allow the

creation and exchange

of User Generated

Content.

A set of theories in the

field of media research;

Social presence

&

Social processes;

self-identity

self-expression

A business can create its own profile in a

business directory known as "Pages".

Facebook Page, users can become a "fan" of

your business

From Web 1.0 to Web 2.0: Evolving global marketspace

From Web 1.0 to Web 2.0: Evolving global marketspace

..contd

• Relative comparisons

that were largely

dependent on

information provided

by manufacturers.

• User-generated

reviews and people’s

tendency to consult

social media friends

about purchases,

buyers have other

options.

PART 2

(THEORY)PART 2

THEORY

Making sense of social media

These are instances when social media results in unintended consequences. How do we make sense of these incidents? How do we understand social media?

The global marketspace and few theoretical

underpinnings

A set of theories in the field of media research;

(1) Social presence theory

(2) Social processes (self-identity and self-expression)

These theories can be used to understand how individuals

operate in the the global marketspace

Social Presence Theory (Short, Williams, &

Christie, 1976)

• The theory suggests that a medium’s social effects are principally

caused by the degree of social presence which it affords to its users.

• Social presence- sense of awareness of the presence of interactive

persons ; know and think about other persons, their characteristics,

qualities and inner states (Short et al., 1976).

• Thus, increased presence leads to a better perception.

Source: Short, J.A., Williams, E., & Christie, B. (1976). The social psychology of telecommunications. New York: John Wiley & Sons.

Social Presence Theory (Short, Williams, &

Christie, 1976)…contd

• Media differ in the degree of “social presence”—defined as the

acoustic, visual, and physical contact that can be achieved—they

allow to emerge between two communication partners.

• Social presence is influenced by the intimacy (interpersonal vs.

mediated) and immediacy (asynchronous vs. synchronous) of the

medium.

• Social presence is to be lower for mediated (e.g., telephone

conversation) than interpersonal (e.g., face-to-face discussion) and

for asynchronous (e.g., e-mail) than synchronous (e.g., live chat)

communications.

Source: Short, J.A., Williams, E., & Christie, B. (1976). The social psychology of telecommunications. New York: John Wiley & Sons.

Social Presence in the context of social

media....

Source:Litvin, S. W., Goldsmith, R. E. & Pan, B. 2008. Electronic word-of-mouth in hospitality and tourism management. Tourism management, 29, 458-468.

Social processes (Self-identity and self-expression)

• What am I?’

Social processes (Self-identity and self-expression)

• Self-identity states that in any type of social interaction people have,

the desire to control the impressions other people form of them

(Goffman, 1959).

• This is done with the objective of influencing others to gain rewards

(e.g., make a positive impression on your partner); on the other

hand, it is driven by a wish to create an image that is consistent with

one's personal identity (e.g., wearing a fashionable outfit in order to

be perceived as young and trendy).

Self-expression • Self-expression is the conscious or unconscious revelation of

personal information (e.g., thoughts, feelings, likes, dislikes) that is

consistent with the image one would like to give.

• Self-expression is a critical step in the development of close

relationships (e.g., during dating) but can also occur between

complete strangers; for example, when speaking about personal

problems with the person seated next to you on an airplane.

Social processes in the context of social

media.... • Applied to the context of social media, different degrees

of self-expression and presentation can be seen.

• The consumers of the digital era are argued to be unpredictable, individualistic, expressive and also highly competent in their spending patterns.

• The key reason why individual decide to create a personal webpage is, for example, the wish to present themselves in cyberspace (Schau & Gilly, 2003).

Classification of Social Media by social presence/media

richness and self-identity/self-expression.

Self- identity/self- expression

Social Presence

Low

Medium

High

High

Blogs

Social networking sites (e.g., Facebook)

Vitural social world (e.g., Second Life)

Low

Collaborative projects ( e.g., Wikipedia)

Content communities (e.g., YouTube)

Virtual game world (e.g., World of Warcraft)

PART 3

APPLICATION

Most often used forms of Social media in the

global marketspace 1. Social networking (34%)

2. Blogging (30%)

3. Online video uploading (13%)

4. Microblogging (12%)

Source: TopRank, 2011; http://www.toprankblog.com/2010/07/seo-tops-digital-marketing-2011. Gilfoil, D. M. 2011. MIND THE GAP: A GLOBAL ANALYSIS OF THE NUMBER OF BUYERS TO SELLERS USING BLOGGING, SOCIAL NETWORKING, ONLINE VIDEO, AND MICROBLOGGING PLATFORMS. International Journal of Business Research, 11.

Features of Web 2.0 – Interactivity – Information sharing – Collaboration – Community – Content co-creation – User-centered design

– Why social media ' likes' say more than you might think?

• Global firms now need to shift their business strategies to account

for the rising power exerted on future customers by the opinions of

existing customers.

• They should actively get involved in online consumer communities

and provide all relevant and complete information about their

operations (Jalilvand, Esfanani, and Samiei 2011)

Social media and the global marketspace

Advantages of using social media

• Volkswagen’s ‘The Force’ commercial for the 2011 Passat model has been viewed nearly 53 million times on YouTube.

Businesses can use

LinkedIn as a

powerful recruitment

tool, finding potential

employees with the

exact talent and skills

they require

Companies can use

YouTube to share

video content. This

includes webcasts,

keynote speeches,

corporate

presentations, video-

based training and

e-learning, video

tutorials

Twitter, a

microblogging

service that

allows its users

to update their

status in a

maximum of

140 characters

per update.

The IBM LotusLive suite

includes, among other

Web 2.0 features, a

social networking

platform that is targeted

at large organisations,

allowing them to create

in-house social

networks and giving

employees a method of

connecting with co-

workers around the

globe

Source: Utilizing Web 2.0 in business, accssed on 28th March 2014 from <http://www.ibm.com/developerworks/library/wa-web20business/>

Benefits of Social Media for Brand Building

1. Increase brand awareness

2. Humanize your brand

3. Establish your brand as a thought leader

4. Stay top of mind

Benefits of Social Media for Growth

5. Increase website traffic

6. Generate leads

7. Boost sales

8. Partner with influencers

Benefits of Social Media for Content Creation & Distribution

9. Promote content

10. Go viral

11. Source content

Benefits of Social Media for Communication

12. Reputation management

13. Crisis communication

14. Customer and audience engagement

15. Customer service and customer support

https://blog.hootsuite.com/social-media-for-business/

• Social media are a function of the technology,

culture, and government of a particular country or

context.

• Local events rarely remain local

• Global events are likely to be (re)interpreted

locally

• Creative consumers’ actions and creations are

also dependent on technology

Source:Berthon, P. R., Pitt, L. F., Plangger, K. & Shapiro, D. 2012. Marketing meets Web 2.0, social media, and creative consumers: Implications for international marketing strategy. Business Horizons, 55, 261-271.

(e.g., prosumers)

Key implications of social media in the

global marketspace

Challenges and opportunities of Social

Media platforms in the global

marketspace 1.Collaborative projects

• Collaborative projects enable the joint and simultaneous creation of content by many end-users and are, in this sense, probably the most democratic manifestation of UGC

• Within collaborative projects allow users to add, remove, and change text-based content—and social bookmarking applications— which enable the group-based collection and rating of Internet links or media content.

• Exemplary applications within this category include the online encyclopaedia Wikipedia, a wiki currently available in more than 230 different languages, and the social bookmarking web service Delicious,

• The main idea underlying collaborative projects is that

the joint effort of many actors leads to a better outcome

than any actor could achieve individually

• International firms must be aware that collaborative

projects are trending toward becoming the main source

of information for many consumers.

• As such, although not everything written on Wikipedia

may actually be true, it is believed to be true by more

and more Internet users.

Collaborative projects can be particularly crucial in corporate crises.

Challenges • Amazon’s pricing strategy

• When online book retailer Amazon started to test the idea of dynamic pricing, comments declaring such a practice as unfair showed up instantaneously under the Wikipedia entry on “time-based pricing.”

Opportunities • Finnish handset manufacturer

Nokia uses internal wikis to update employees on project status and to trade ideas, which are used by about 20% of its 68,000 staff members.

Likewise, American computer software company Adobe Systems maintains a list of bookmarks to company-related websites and

conversations on Delicious.

Challenges and opportunities of Social

Media platforms in the global

marketspace….contd

2.Blogs

They are the Social Media equivalent of personal web

pages and can come in a multitude of different

variations, from personal diaries describing the author's

life to summaries of all relevant information in one

specific content area.

Blogs; Challenges and opportunities of Social Media in the

global marketspace…contd

Opportunities Many companies are already using

blogs to update employees,

customers, and shareholders on

developments they consider to be

important. Jonathan Schwartz,

CEO of Sun Microsystems,

maintains a personal blog to

improve the transparency of his

company; so does automotive

giant General Motors.

Challenges Microsoft's former “technical

evangelist” Robert Scoble, for

example, had a tendency to

fiercely criticize the products of his

employer—before he decided to

leave the Redmond-based

software company in 2006.

Challenges and opportunities of Social Media

platforms in the global marketspace…contd

3. Content communities

• The main objective of content communities is the sharing of media

content between users.

• Content communities exist for a wide range of different media types

• Examples, including text (e.g., BookCrossing, via which 750,000+

people from over 130 countries share books), photos (e.g., Flickr),

videos (e.g., YouTube), and PowerPoint presentations (e.g.,

Slideshare).

Content communities: Challenges and

opportunities of Social Media in the global

marketspace…contd • The high popularity of content communities makes them a very attractive contact

channel for many firms

• Almost 5 billion videos are watched on Youtube every single day

• In 2007, Procter & Gamble organised a contest for its over-the-counter drug Pepto-

Bismol, whereby users were encouraged to upload to YouTube 1-minute videos of

themselves singing about the ailments Pepto-Bismol counteracts, including heartburn

and nausea.

• In a similar spirit, kitchen appliances manufacturer Blendtec became popular for its

bevy of inexpensive “Will it blend?” videos, which have been watched by millions of

people.

• Other firms, such as Cisco and Google, rely on content communities to share

recruiting videos, as well as keynote speeches and press announcements, with their

employees and investors.

Challenges and opportunities of Social Media

platforms in the global marketspace…contd

4. Social networking sites

Applications that enable users to connect by creating personal

information profiles, inviting friends and colleagues to have access

to those profiles, and sending e-mails and instant messages

between each other.

These personal profiles can include any type of information, including

photos, video, audio files, and blogs. The largest social networking

sites are U.S.-based Facebook (initially founded by Mark

Zuckerberg to stay in touch with his fellow students from Harvard

University) and MySpace (with 1,500 employees and more than 250

million registered users).

Social networking sites • Several companies are already using social networking sites to support the

creation of brand communities (Muniz & O’Guinn, 2001) or for marketing research in the context of netnography (Kozinets, 2002).

• To promote the movie “Fred Claus,” a 2007 Christmas comedy film, Warner Brothers created a Facebook profile via which visitors could watch trailers, download graphics, and play games.

• The Adidas custom soccer community on MySpace allows visitors to associate themselves with one of two brands of elite soccer cleats produced by the German sports apparel manufacturer, and to access product reviews and information on professional soccer players who play using “their” shoes.

• Some firms even go one step further and use Facebook as a distribution channel. Consider U.S.-based florist 1-800-Flowers.com, which offers a widget on Facebook called “Gimme Love” whereby users can send “virtual bouquets” to friends or, with a click of the mouse, be directly transferred to the company's website to send real flowers.

Summary: Challenges in using social media

in the global business context….contd

• Lack of expertise and experience. – There is a lack of knowledge, evidence and research on:

• How companies should use social media. • How consumers actually use social media.

• Difficulty of measuring effectiveness. – Return on investment (ROI) and promotional effectiveness are

difficult to measure. Current claims of miraculous results may be over-stated.

• Costs – While potentially cheaper than traditional media, there are costs

associated with social media which include: • Regular creation of content

• Platform development (website, accounts, pages)

• Monitoring, reporting

• Opportunity cost of promotional spend on marketing communication budget.

Summary: Challenges in using social media

in the global business context….contd

• Social media are used differently across and within countries. – Understanding country usage patterns is

important.

– Avoid making assumptions about ‘typical users’.

• Of FaceBook’s 400 million active users, a study by the New York Times (2010) revealed 50% are thought to be over 35, with only 27% aged under 24.

• A study of Twitter users revealed 70% were over 25, 57% had an income over $60,000, and 52% were tertiary educated (Quantcast, 2010).

Vs

Challenges in using social media in the

global business context: China

• FaceBook, YouTube and Twitter are blocked in China.

• However, China has the largest number of internet users in the world. – From the CNNIC 24th Statistical Report of Chinese

internet usage (2009): • 338 million Chinese ‘netizens’ in 2009 (25.5% of population)

• 46% of Chinese ‘netizens’ access the internet via mobile phone; 35.5% access the web through internet cafes.

• More than 100 million Chinese netizens use online forums (bulletin board system – BBS), spending at least 1 hour per day on these sites.

Challenges in using social media in the

global business context: China

• Local websites and social media dominate: – Search engine usage: Baidu (64%),

Google (25%), Yahoo China (8%) (Comscore, 2008).

– Top social media sites: • Renren.com (Launched 2005. Similar to

FaceBook. 31 million active users by April 2011)

• Kaixin001.com (Launched 2008. 8 million+ active users after first year.)

• Sina Weibo (Launched 2008. Similar to Twitter. 250 million users, 25 million messages a day at October 2011).

Challenges in using social media in the

global business context

• Limited control and the potential for

negative publicity and brand damage.

– ‘Hate’ sites and pages.

– Boycott groups.

– Trolling behaviour on social media.

– Low popularity and usage.

– Poor public relations handling of incidents.

– Inappropriate consumer-created content.

Challenges of Web 2.0 channels

Challenges of Web 2.0 channels

Using Social media : Good outcomes

• In 2009, the Facebook page

for Ferrero’s Nutella brand

united 4.9 million fans of the

chocolate and hazelnut

spread who gather together

to share their brand

experiences. Nutella’s page

was originally created by a

fan, and Ferrero’s hands-off

approach to site

management helps keep

authenticity strong.

The Facebook page for Coca- Cola’s was originally built by aficionados who united 14 million fans. Coca-Cola boldly share ownership with its fan base. The site’s originators now co-manage the site alongside Coca-Cola, which plays a decidedly backseat role.

Using Social media : Bad outcomes

• Apple had a lawsuit against one of the many rumor websites

dedicated to the company.

• The facebook for Wal-Mart was overrun by protesters. One poster

wrote: ‘Facebook should take the number of negative comments on

this page as a note that we don’t support this company [for] its use

of a space for social networking. This space is for people talking to

other people’

Take away note and lesson summary

• Tim O'Reilly urges Web 2.0 firms to solve real-world problems

• From global village to global marketspace

• Social Media, Web 2.0 and User Generated Content • Social presence theory & social processes (self-

identity and self-expression) • Features of Web 2.0 • Social media and the global markespace • Challenges and opportunities of Social Media

platforms in the global marketspace

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