2.3.3 Social media performance potential Usage formats: social networks

Learning objective: To be able to assess the possible uses and limitations of social networks as part of a social media strategy. The development, design and practical use of social network platforms is not part of this chapter.

Reading time: approx. 16 minutes

Exercises: Exercises are in the PDF of all exercises of this course. Download it from here.

Basics

This section of the topic will give you a brief overview of social networks / social network platforms as systems.

Definition

Social networks are personal networks in which social media users establish and maintain their personal contacts – of a private and/or professional nature.

Social networks can be run on a single platform or across multiple platforms. Users can also manage several social networks with different content.

Success criteria

The most important success criterion of a social network platform is the open market. Social networks themselves thrive on networking and subsequent activity in the form of communication and information. In addition, the information and communication functions required for the functioning of a social network platform, a form of self-presentation appropriate to the target groups and the possibilities to act as a sender are necessary. The most important success criterion – apart from a positive network effect – is the activity of the users of the social networks.

User benefits as a success factor: The most important user benefit from a social network is the maintenance, activation and expansion of the network and the resulting benefit for the user. The user benefits of a social network can therefore be of different kinds and look like this, for example:

  • easy communication with the network
  • permanent information about what is happening in the network
  • simple information of the network about own activities
  • impressive self-promotion on its own network.

Each user benefit requires corresponding technical-conceptual functions in the social network platform. If a function is missing or if the results of a function are not convincing or competitive, this platform has corresponding weaknesses that lead to it being vulnerable to competition.

Motivation as a success factor: The motivation for activities in social networks lies in the attractiveness and the benefits of the relationships with the users of one’s own network. The platform operator has relatively little influence on this. The motivation for activity in a community lies in the attractiveness of the topic and in the social contacts within the community. Community operators have a much greater influence on the development and maintenance of social contacts – for example, by making it easier for users to find suitable contacts. The quality of user networking in social networks is relatively manageable and based on the friend-of-a-friend principle. This neglects the construction of interest-based social network components in social network platforms – and the social networks they contain.

Participation as a success factor: Participation is beneficial in both social networks and communities. In both cases, operators make sure that participation contributes as much and as widely as possible to activity and development. Z. For example, by creating appropriate participation opportunities as functions and rewarding their use.

Social network management

Establishment, maintenance and support of the social network is generally the responsibility of the owner. Platform operators leave this function entirely to the owner and often do not maintain a network management equivalent to community management, which serves to maintain individual personal and professional networks. The platform operators’ network management focuses on the establishment, maintenance and further development of technical and conceptual functions that are intended to make it easier for users to set up and maintain their networks.

In fact, social networks require a management that actively supports the establishment, maintenance and activity of social networks in a structured manner via appropriate functions. This especially on the level of networking and activity. If we leave this task to the owners of the social networks, the success of our platform is largely dependent on their skill. In addition, it is the task of the platform operators to provide the owners of the social networks with the most powerful tools possible for the operation of the network.

Churn management – the reactivation and recovery of inactive users has a high significance in social networks.

Competitive situation

Social network platforms are subject to the network effect. This means that they are exposed to a particularly extreme type of competition. Network effect support monopoly-like tendencies. In addition, social network platforms can also be in a competitive situation with communities and audiences if these formats are part of the social network platform and are important for user acquisition, retention and activity.

Types of social networks

Social networks differ primarily in

  • private social networks – the private circle of friends – and
  • professional social networks – the professionally relevant contacts.

Different networks serve different purposes and can – and should – be designed according to their different purposes. This includes different designs of functional areas and an individual mix of usage formats.

Strengths and weaknesses of social networks

The network effect is both a blessing and a curse for building social network platforms. A positive effect makes the platform grow quickly, a negative one can make existing platforms meaningless within a relatively short time. Building a social network platform on a topic that is already occupied assumes high weaknesses in existing competition that should not be correctable in the short and medium term.

The economic marketing of social network platforms is still largely based on their use for advertising. The use of user data and user insights for more extensive marketing and sales approaches has come to a standstill to date – not least because the network effect has effectively ended competition at the level of general purpose social network platforms. This is not an end to system competition, as the examples of WhatsApp and Instagram show.

Social networks offer an incredible wealth of data about their users and their behavior and interests. This volume, by virtue of its scale and complexity – but also by virtue of the versatility and complexity of human nature – is also both a blessing and a curse. Blessing, because it contains enormous economically useful knowledge. Curse, because the use of this knowledge is a great challenge. And not least because the opportunities it contains are also highly relevant to society, with considerable potential for change – some would even say with enormous explosive power.

Demarcation Social Networks – Audience

Social networks thrive on networking and the exchange of information between users. Audiences are based on the sender-receiver relationship, so users follow an information source. The relationship is thus of different quality, the communication in social networks should be many times more active than in an audience. Even though the information function is important for the users in an audience, this function should not be the main focus of the communication activities.

Differentiation between social networks and communities

Communities are formed around common interests, social networks are circles of friends and acquaintances with different interests. This distinction is somewhat less clear in professional social networks because professional interests coincide here. Communities are also found in more or less pronounced form in social networks to avoid a loss of attention and usage time by them social network users. At the same time, communities in social network platforms can act as sources of new users, but above all they are an important source of information about the interests of social network users.

By UserBenefit we mean the benefit to the user from his participation in a social network or community. User benefits vary from network to network and from community to community. Here are the most important points for differentiating between network and community. The core benefit of the Network is the maintenance and expansion of existing relationships. The core benefit of the community is the topic and the connection with users of the same interest. While the primary core benefit already exists in the user’s network (personal contacts), this core benefit of a community must first be created by the user – with the support of the operator.

The motivation for activity in a social network lies in the network – in relationships with existing contacts. The motivation for activity in a community lies in the topic and its importance for the user and in the – usually still to be established – relationships with other users with the same interest. If a user does not succeed in building relationships with other users in a community, he or she will most likely become inactive. Relationships with other users in a personal network, on the other hand, are based on interest in that person. That is basically given, otherwise this person would not be part of the network.

Participation within a social network depends on the user’s interest in his or her circle of friends and acquaintances, so it can vary significantly within the network. The same is true when comparing networks. The participation of users in a community depends on the attractiveness of the topic and the users of the community. The latter is again also a question of networking and benefiting from the community.

  • In social networks, the individual relationship is formed first, and from that the network.
  • In communities, users find each other through a topic in a network and possibly relationships between the users.

Social network and platforms

Although the operation of social networks in external platforms is conceivable in principle, it should be critically examined. The operation of social networks platforms should allow access to the functions as well as to the data (usage data, user data). Otherwise, successful leadership is not likely in the medium and long term. In addition, the value and economic use of a social network platform is significantly reduced on foreign terrain.

Functions of a social network: The functions required for a network result from the benefits of the network for its users. Since these benefits can be of different kinds, a social network requires a correspondingly broad as well as competitive range of functions. If central functional areas are missing or are no longer competitive, this can endanger the existence of the platform in the long term. If, for example, communication is easier and more efficient in other platforms, the platform must act in the short term – become more competitive – or take the competitor out of the market – e.g., through an acquisition.

Instagram was more compelling than Facebook in displaying images – in mobile use for users. WhatsApp offers users simple and powerful mobile communication, tailored to social network maintenance. Both prompted Facebook to acquire the respective potential competitor. Attempts by Google to establish its own social network platforms have so far regularly failed – both because of the network effect and because of serious technical weaknesses. Facebook has consistently taken over potential competitors (Instagram, WhatsApp) or tried to squeeze them out of the market (SnapChat). This is likely to be necessary in the future as well in order to maintain the position achieved.

Market requirement for social networks

  • the market / the topic / the benefit should not yet be occupied.
  • the company has to be efficient on the market / topic level as well as on the social network level. Social media expertise for Audiences is not enough here.
  • The company must be credibly able to build and operate the platform with a lasting perspective.

Benefits and impact of social networks

Benefit: Social networks are used to build and maintain personal social networks and to present oneself more or less publicly within these networks. Through social networks, users can shape their own public appearance and multiply their personal reach and impact. Since everyone is a sender and everyone is a receiver in social networks, they enable a selective form of information and – especially in the professional environment – knowledge updating. At the same time, they allow individuals to gain greater prominence as broadcasters.

Impact: Social networks are based on networking, communication and information. Reach and thus the basis of perception and attention is built up via networking. Through communication, contacts are established, maintained, content is discussed, experiences are exchanged. Information – in the form of text, audio, video and image/graphics – is used to disseminate content on a larger scale. Social networks are usually subject to a pronounced network effect.

Within social network platforms – in addition to the social network usage format – all other social media usage formats can also be used. This primarily serves to make the platform more attractive and aims to increase activity and the time spent on the platform.

  • Social networks live out of the social contact of the owner.
  • The owner of the social network is the person who maintains his or her circle of friends and acquaintances in this way.
  • Operators of a social network platform are not owners of the social network.

Performance potential of social networks for companies

The most important performance potentials of social networks / social network platforms for companies lie in their effect as

  • Basis of an own business model
  • Marketing instrument to support an existing business model(s)

We are particularly familiar with professional networks, such as Xing and LinkedIn. These two platforms are primarily designed as professional networks, supplemented by audience functions, communication functions and information functions. In order to more easily recognize the performance potential of social networks for companies, it is helpful to have these examples of eyes and apply them to other situations.

As its own business model

We find social network platforms as the corporate platform of social media companies, that is, companies whose business model is the operation of social media platforms.

To support existing business models

Social network platforms can be interesting for companies as a supplement to their own business model or as a marketing tool for it.

In addition to the use for the employees of the company, a market / a strategically significant target group – as an alternative to a community – can be developed in this way. The prerequisite for this is the suitability of the topic / market, a suitable competitive situation and, of course, the competence of the company both for the topic / market and for social media networks and their platforms.

For example, if the requirements for a community are not met or are questionable, or if the range of topics is too broad for a community, a thematic social network may be an alternative worth considering.

For example, if a company is active in different markets and service portfolios, but repeatedly encounters the same groups, the approach of a thematically more open social network is an alternative to a community. Especially if users can benefit from sharing or self-representation across markets or application of services. For example, a medical technology company with a correspondingly broad service portfolio could have an interesting alternative to a community with a social network supplemented by information and communication functions (one2one, one2many), especially if intensive participation on a broad scale cannot be accepted by the users.

Application

This section of the topic addresses the issue of using social networks for strategy development. We check whether social networks are possible and useful for the company and which requirements, if any, result from this for the social media strategy.

Functions

Social networks need a set of features to be ergonomic and useful for users. These include in particular:

  • Information functions: Profiles, feeds for what’s happening in the network, galleries and posts for general information of the network.
  • Communication functions: Functions for real-time and time-delayed communication, audio and visual communication. Communication should be transparent, user-defined and historically traceable.
  • Organizational functions: The organization and structure of contacts, events and occasions, or the organization of real and virtual events are relevant according to the function of the network and its user benefits.
  • Management functions: e.g., for measuring activity, managing activity, networking, motivation, and participation.

We use the corresponding functions of a social network to form the attractiveness, activity and user benefits of the network.

Management

Social networks are based on maintaining personal contacts of real and virtual circles of friends. In the case of professional networks, this is analogous – i.e., maintaining real professional or virtual contacts.

The management of this usage format takes care that the users get the best possible

  • Functions: Information and communication functions for communication, organization functions to organize and manage contacts, networking functions to find new relevant contacts.
  • Motivation: functions for recognition by contacts and functions for self-expression (profile, galleries, etc.)

receive

With professional social networks, managing relationships among users is not quite as difficult as with private social networks, but it is also not negligible.

The use, actuality of the functions and the activity of the users are further important tasks of the management of social networks.

Through the management we get the attractiveness and activity of the network.

Platform requirements

The platform requirements result firstly from the required functions and secondly from securing the data and relationships. That is, as the operator of a social network, we not only bear the responsibility for the integrity of the data, we should also manage the data out of corporate interest. The use of external platforms without access to the data is a permanent risk.

CorporateBenefits

The benefit of social networks as a usage format for companies concerns 2 levels.

  • the external use of the format: here we use social networks for contact and collaboration with users outside the company.
  • the internal use of the format: here we use social networks for contact and collaboration with users within the company.
Examples of corporate benefits from the external use of social networks

We use social networks to secure external contacts and for information flow with external groups. Social networks are also interesting for securing market access for specific user groups because they offer greater competitiveness and intensity than audiences. Where qualified personnel are in short supply, a social network for these groups can be a tool to reduce or avoid strategically relevant bottlenecks.

Examples of corporate benefits from the internal use of social networks

The use of social networks for the company’s own employees primarily serves to support the flow of information within the company and collaboration across organizational-functional boundaries.

User benefit

The most important user benefits from social networks are briefly described below:

  • Networking: the networking of users is the existential basis of social networks. An important prerequisite for this is that users find each other. That is, they must find each other using criteria and search functions. But beyond that, the active management of user networking – as with communities – is a success factor that should not be overestimated. The appropriate functions – both at the user level and at the platform management level – are therefore critical to success.
  • Self-promotion: Self-promotion is always also a question of the quality of the profiles and their relevance for the user groups addressed. Here, too, both powerful functions for the profiles and a toolbox for the platform and user management of the network are indispensable.
  • Information: Information must not only be relevant but also presented and found. Finding the right information for the respective users and presenting it in a helpful way is an exciting challenge in networks as well as in communities, not least because it requires appropriately designed profiling based on suitable and up-to-date profiles. If we are unable to combine information and interests in a social network, irrelevant information threatens to result in a loss of attractiveness and activity.
  • Exchange with others: In addition to the communication functions that enable and keep the exchange up to date, profiles that can initiate the exchange are required above all. If we cannot match users via their profiles, this has a lasting negative impact on the attractiveness of the network, because an important user benefit is missing or inadequate. Profiling is even more relevant in social networks than in the other social media usage formats because a higher degree of heterogeneity of interests can be assumed here.

Lack of user benefit is one of the most serious mistakes in the development of social media offers as well as social media strategies. And unfortunately also one of the most common mistakes on both levels – and not only with the usage format social networks.

Motivation

Motivation in social networks can be platform/operator-based or user-based or a combination of both approaches. Important goal of motivation is to support and promote activity. For this purpose, we use self-presentation and external impact as motivation methods, and this through recognition and awards by operators and / or by users of the network. For these methods to work, appropriate functions are required. The contribution of motivation methods and structures to social networks results in corresponding specific requirements for the social media platform on which the social network operates.

Participation

The main forms of user participation in social networks include self-presentation via profiles, exchanges with individuals, individually or in groups, information from individual users and a large number of other users of the social network, and the development of one’s own reach as participation options. Which participation options should be implemented in a social network depends primarily on the interests and user benefits of the network. The functions of a social network that are relevant for participation are not always provided in standardized offerings or external social network platforms.

Resources

The resource requirements for setting up and operating a social network are to be found not only in the conceptual and technical requirements for developing and setting up the platform, but above all in the active operation of the platform. Depending on the form of the social network, we are dealing with a directory with more or less intensive self-portrayal, with versatile communication and information functions, and with an audience-like effort for active benefit creation via information. To this end, appropriate resources must be deployed for the management of the network, which – again depending on the design of the network – can be similar to a community.

Exercises own company

Describe the possible benefits of a social network in your industry for companies and employees/industry members. Give reasons for your assessment.

Describe the requirements for the success of a social network for external users in your industry. Give reasons for your assessment.

Describe which of these prerequisites are met and which are not met for a social network in your industry. Give reasons for your assessment.

Describe the expected impact of a social network in your industry on your company. Give reasons for your assessment.