NEWS: Social networking and you

WHEN the name of a search engine is an unofficial verb, you know the Internet has definitely changed how we connect and search for information.

A more recent trend is the acceptance of social networking sites such as Twitter and Facebook as part of our everyday communication tools. And these services are not only used by individuals to keep in touch with long lost friends any more — even companies are using such tools to get in touch with their customers now.

“However whether or not they doing a good job is a another matter,” said Dr Michael Netzley, an assistant professor of corporate communications practice with the Singapore Management University.

To find out more about how social networking has gone mainstream and how it can be part of a company’s advertising and promotions strategy, we recently caught up with Netzley in an e-mail interview.

In.Tech: Social networking sites, blogs and other popular social media applications have been around for a while. Why is it only now that the popularity of these sites have exploded?

Michael Netzley: All technology innovations go through an adoption cycle. There are four steps in this process.

First, there’s a trigger which compels somebody to invent and release the technology, followed by an enthusiastic early adoption phase. After that there’s a trough of disillusionment as early adopters tire of the new technology, and finally, a plateau of productivity where the tool is widely adopted and used by average citizens working and living in life’s mainstream.

Indeed, the tools have been around for a while and have been hyped, but the reality is that we are just now seeing mainstream adoption.

Huge numbers of people are now adopting Facebook, not just the early adopters. The same can be said for Twitter.

The adoption explosion we are seeing is a reflection of the technology’s growth from early adopters to mainstream users. This is all a natural cycle which applies to almost every technological innovation including but not limited to Web 2.0.

In.Tech: How have Asian businesses responded to the use of social media applications to move their businesses forward?

MN: Asia’s response has been uneven. Leading digital markets such as China, South Korea, and Japan certainly appear to be ahead of other markets across Asia because Web 2.0 tools have been so well received.

Our research at Singapore Management University, however, reveals that other markets clearly lag behind. In the middle are markets such as Malaysia, Singapore, Hong Kong, Vietnam and Taiwan as emerging digital markets which hold great promise but simply are not as far along the technology adoption curve.

Finally, markets such as Thailand and Cambodia lag behind in terms of social media adoption. This does not mean there is no social media, but simply that the markets are several years behind in terms of infrastructure to support Web 2.0 and consumer adoption and behaviour.

Having said that, Asia’s digital markets are in some ways global leaders. Japan’s mobile phone market is so advanced that exporting the technology is difficult because consumers in other markets simply have no idea what to do with such advanced phones.

South Korea is an Internet society and is the world’s number two information society. Web 2.0 technologies have a fertile ground for taking root in this country. And China appears to be a giant innovation centre. China’s Internet market is the world’s largest at 330 million netizens, and it hosts an impressive array of social networking, video sharing, music sharing, gaming, and Bulletin Board System (BBS) sites.

With this environment, companies such as China’s Internet Service Portal, Tencent, have developed business models which are incredibly profitable and the Western world is now looking to Asia to see how companies can be so profitable when the advertising market is relatively small.

In.Tech: How have social networking applications changed the way companies execute their advertising and promotion strategies?

MN: Marketing is changing dramatically because an interactive web, or what Web 2.0 describes as a read-write web, is an engagement medium.

The classic advertising example can be described as shouting from the mountain top. You design a product or service, buy ads, and then shout to let buyers know they can buy your product or service. This might also be described as a mass production manufacturing model. But the interactive web changes all that.

People want engagement, customisation, and relevance to their personal lives. Consumers want to know how a product or service is directly relevant to them. Shouting from the mountain top cannot offer such a unique connection for each consumer, but interactive technology comes much closer to achieving the goal.

Additionally, interactive technologies offer a feedback loop which allows companies to collect information from customers, collate, and forward that information to the business units.

Finally, marketing has changed because consumers can now market a product or service for you. You do not have direct control over what they say so active engagement becomes critical if your corporate voice is to be part of that consumer conversation. We must now engage and work alongside our customers rather than simply standing up and shouting from the mountain top.

At the same time, little has changed. Because of the technology adoption cycle described earlier, companies are still feeling their way through this radically changed operating environment. We are, for example, learning how to target smaller populations on Facebook which we think should be interested in our product.

In contrast, classic print advertising is a blunt instrument which tries to reach as many people as possible in hopes that you pick up a few new customers along the way. This tension between targeting small but appropriate communities, and achieving the widest possible reach via mainstream media, is just one of the changes we are still learning.

So until companies begin to figure out this difference, the actual uptake of Web 2.0 technologies for marketing purposes will likely lag behind popular use of the tools. Web 2.0 marketing is a new game with new rules, and we are still figuring out how to play the game.

In.Tech: How can businesses make social media applications work to their advantage?

MN: There are many basic ways to use these tools. First, you can engage customers and start building a genuine relationship (not spam).

Second, with a relationship in place, you can begin to receive feedback which can help you further improve products and services.

Third, if a product is well received, customers can begin to market a product for you through word-of-mouth-marketing. Peer to per recommendations can be very influential.

Fourth, you can also begin to capture analytics and further improve marketing efforts. How do customers find you online? What are the leading search terms? Are people sharing your content? This information can help you revise marketing efforts and make them even more effective.

Fifth, if you start to do all these things effectively you can build a strong reputation for your company.

Sixth, and in my mind quite important, consider the nature of knowledge work today. Building a network of professionals who are loosely tied helps knowledge workers remain current, find new data or resources, track competitors, or continue to learn and improve.

Finally, don’t forget about search. How do people find information about products and services today? I am willing to bet that the Web will be the most popular answer. Have you designed your web presence so that you appear at the top of numerous web searches? Doing so makes it much easier for customers to find you.

In.Tech: As social networking sites tend to attract the attention of a younger crowd, do businesses perceive it as being more of a new toy than something serious. Can this perception be changed?

MN: Unfortunately too many executives do associate Web 2.0 with what their kids do with free time. Why would they want a respectable business to appear in kid sites? But we need to look at the changing demographics online to realise that, while Web 2.0 is more popular with Gen Y, it can still be very popular with Gen X and Baby Boomers.

Online communities which are dedicated to golf, travel, food, wine, sport, and fashion to name a few, can easily be found.

The only real answer to this problem is data. First, a company must invest in data collection to find out what its customers do online and via mobile phones.

Second, you need to collect data about competitors within your industry and companies in similar industries. What are they doing online? If the answer is “very little,” then you, if your customer data supports it, have an incredible opportunity to build that first successful online community.

In.Tech: If everyone can be a “fan” or “follow” a company on these social media sites, how can companies tell that they are not adding people who have ill-intent. For example, these fans, might want to gain access to deface the profile. How can companies know they are safe?

MN: There is no doubt that Web 2.0 can add security issues which the company must address. This is simply part of the equation. But doing business in an environment where a small number of people have ill intent is not anything new.

So the issue, I believe, is one of values and business mission. If you believe deep in your soul that engaging customers is important, then you will more likely be willing to pay the price of taking additional security measures because you want the direct contact.

Perhaps Dell’s customer online feedback websites are a good example. If a company is unsure, then perhaps it looks at enterprise 2.0 solutions which exist behind the firewall and are aimed at innovation, employee productivity and employee engagement.

And if a company is highly risk averse, then maybe Web 2.0 is not for them. These are issues that corporate strategists must grapple with.

Web 2.0 is not a fad and the sooner you begin moving your company up the organisational learning curve with regards to Web 2.0, the easier it will be for you to make the decisions which are right for your organisation.

* Netzley will be in town on September 4 to give a talk entitled Adventures with Social Media - Lessons from Asia’s Internet. The presentation is part of a half-day seminar on social media networks that will be held at 10am at Menara Star, Phileo Damansara II, Petaling Jaya. It is organised by PRCA Malaysia in collaboration with The Star’s New Media department. For more information on the talk, contact Ong Gaik Hong or Ida Zarina Faiz of Maverick Communications at (03) 6207-1558 or send an e-mail to secretariat@prcamalaysia.org.