Chapter 8: Social Media Information Systems

From Younger Generations to Adults, Social Media has Impact Our Lives! 

• Social media (SM)-is the use of information technology to support the sharing of content among networks of users.
• Communities of practice/Communities- social media enables people to form groups of people related by a common interest.
• Social media information system (SMIS)- is an information system that supports the sharing of content among networks of users.
• 3 SMIS Roles: 
1. Social media providers
2. Users
3. Communities

Social Media is a Convergence of Disciplines

• Social media providers- Facebook, Google+, LinkedIn, Twitter, Instagram, and Pinterest provide platforms that enable the creation of social networks, or social relationships among people with common interests.
• Users- include both individuals and organizations that use SM sites to build social relationships.
• >73% of people with Internet access use SM
• 40% of people access SM via their mobile phones
• ~70% of Pinterest users are Females
• 84% of LinkedIn users are 25 and older
• ~ 77% of Fortune 500 companies maintain active Twitter accounts
• 70% have Facebook pages
• 69% have YouTube accounts
• Depending on how organizations want to use SM, they can be users, providers, or both.

Viral hook- some inducement like a prize or other reward, for passing communications along through the tiers.


The exponential nature of relationships via community tiers offers organizations both a blessing and a curse. Social media is a powerful tool, and to use it well, organizations must know their goals and plan accordingly.

5 Components of SMIS

• Hardware: 
• Social media providers
• Elastic, cloud-based servers
• Users and communities
• Any user computing device
• Software:
• Social media providers
• Application, NoSQL, or other DBMS, Analytics
• Users and communities
• Browser, iOS, Android, Windows 10, and other applications
• Data:
• Social media providers
• Content Data- is the data and responses to data that are contributed by users.
• Connection Data- is data about relationships.
• It differentiates SMIS from Web applications.
• Both Web sites and social networking sites present user and responder content, but only social networking applications store and process connection data.
• Users and communities
• User-generated content, connection data
• Procedures:
• Social media providers
• Run and maintain application 
• For social networking users, procedures are informal, evolving, and socially oriented.
• Users and communities
• Create and manage content, informal, copy each other
• The most troubling example concern user privacy.
• People:
• Social media providers
• Staff to run and maintain application
• Users and communities
• Key users, adaptive, can be irrational

How DO SMIS Advance Organizational Strategy?

SM in Value Chain Activities

• Social CRM- is dynamic, SM-based CRM process. The relationships between organizations and customers emerge in a dynamic process as both parties create and process content.
• Flies in the face of the structured and controlled processes of traditional CRM.
• Crowdsourcing- is the dynamic social media process of employing users to participate in product design or product redesign.
• eBay- often solicits customers to provide feedback on their eBay experience.
• Business-to-consumer (B2C)- relationships to market products to end users.
• Business-to-business (B2B)- leads to retailers

How Do SMIS Increase Social Capital?

According to the textbook, Using MIS, "business literature defines three types of capital, capital, Human capital and social capital" (pg 301).

• Capital- Karl Marx
• The investment of resources for future profit.
• Refers to investments into resources such as factories, machines, manufacturing equipment, and the like.
• Human capital
• The investment in human knowledge and skills for future profit.
• Taking a class is investing our money and time to obtain knowledge that hopefully will differentiate from other workers.
• Social capital- Nan Lin
• The investment in social relations with the expectation of returns in the marketplace.
• Strengthen personal relationships: help someone get a job, set a friend up on  date, or introduce a friend to someone famous.
• Weaken personal relationships: continually freeloading, declining requests for help, and failing to spend time with friends. 
• Social Capital Adds Value- Nan Lin
1. Information
2. Influence
3. Social credentials
4. Personal reinforcement 
• Value of Social Capital- Henk Flap
• Determined by the number of relationships in a social network, by the strength of those relationships, and by the resources controlled by those related.

When Using Social Networks Professionally, consider the following:

1. You gain social capital by adding more friends and by strengthening the relationships you have with existing friends.
2. You gain more social capital by adding friends and strengthening the relationships with people who control resources that are important to you.
3. Use Klout.com-site searches social media activity on Facebook, Twitter, and other sites and creates what it calls a Klout score, which is a measure of an individual's social capital.

• Influencer- Your opinion may force a change in others' behavior and beliefs.
• Such communication is unreliable and brief.
• Such relationship sales have been going on by word of mouth for centuries; the difference here is that SMIS allow such realtionships to scale to levels not possible in the past. 
• Some famous celebrities get paid more than $10,000 for a single 140-character tweet! (Using MIS textbook, pg 305). 
• Strength of a Relationship- The likelihood that the other entity (person or other organization) in the relationship will do something that benefits the organization. 
• The Value of Resources controlled by those in the relationships.
• There is no formula for computing social capital, but the three factors would seem to be more multiplicative than additive.
• The value of social capital is more in the form of Social Capital = Number of Relationships x Relationship Strength x Entity Resources than in the form of Social Capital= # of Relationships + Relationships Strength + Entity Resources
• Resources must be relevant to the organization.

• Some companies monetize, or make money from, their application, service, or content.
• By making users the product
• Users are the product being sold to advertisers
• "If you're not paying, you're the product."
• Advertising
• Facebook made 94% of its 2015 first quarter earnings from advertising ($3.5B).
• ~90% of Twitter's $436M first quarter earnings came from advertising.
• Advertising on SM can come in the form of paid search, display or banner ads, mobile ads, classifieds, or digital video ads. 
• Pay-per-click- revenue model, in which advertisers display ads to potential customers for free and pay only when the customer clicks.
• Use increases value- means the more people use a site, the more value it has, and the more people will visit. 
• Freemium
• Revenue model offers users a basic service for free and then charges a premium for upgrades or advance features. 
• LinkedIn- sells upgrades to its standard SaaS (Software as a Service) product. 
• ~19% from premium subscriptions
• 62% from online recruitment
• 19% from advertising
• Ad-blocking software
• To filter out advertising content and rarely, if ever, see Internet ads.
• It also reported that the use of ad-blocking software grew by 69% over the past year. 
• Other
• Sale of apps and virtual goods, affiliate commission, and donations.
• Conversion rate
• It measures the frequency that someone who clicks on an ad makes a purchase, "likes" a site, or takes some other action desired by the advertiser. 

Does Mobility Reduce Online Ad Revenue?

According to Marin Software  the average click-through rate of smartphones is 3.75 %, while the same rate on PCs is 2.29%. Thus, mobile users click ads more often and hence generate more revenue  (Using MIS textbook pg 309). 

How Do Organizations Develop an Effective SMIS?

1. Define Your Goals
2. Identify Success Metrics
• Success metrics/ Key performance indicators (KPI) 
• Metrics- Are simply measurements used to track performance.
• The Right ones: Help you make better decisions.
• The Wrong ones: Are meaningless and do not positively affect your decision making. These are commonly known as Vanity Metrics.
• Bounce Rate- The % of people who visit your Web site and then immediately leave.
3. Identify Target Audience 
4. Define Your Value
5. Make Personal Connections
6. Gather and Analyze Data

What is an Enterprise Social Network (ESN)?

• (ESN)- a software platform that uses social media to facilitate cooperative work of people within an organization. 
• Enterprise 2.0- refers to the use of enterprise social networks. Andrew McAfee defined six characteristics that he refers to with the acronym SLATES.
• Folksonomy- a content structure that emerges from the processing of many user tags.
• Communication channels- means of delivering messages, prior to 1980. There were three major national TV networks and no more than half-dozen major national newspapers.
• Best practices- methods that have been shown to produce successful results in prior implementations. Having an internal champion or defender of your internal ESN is equally important.

How Can Organizations Address SMIS Security Concerns?

• Develop and publicize a social media policy,  a statement that delineates employee's rights and responsibilities.
• Generally, the more technical the organization, the more open and lenient the social policies.
• Intel Corporation have 3 Key Pillars of Intel's policy in 2015:
• Disclose
• Protect
• Use Common Sense

• Organizations need to determine how they will deal with such content before engaging in social media. 
• User-generated content (UGC), content on your SM site that is contributed by the users, is the essence of SM relationships. 
• Inappropriate UGC that can negatively affect organizations.
• Junk and crackpot contributions
• Inappropriate content
• Unfavorable reviews
• Mutinous movements
• Organizations should regularly monitor the site and remove objectionable material immediately. 
• 3 possibilities in such situations are:
• Leave it
• Respond to it
• Delete it

Future of 2026?