The Economics of Social Media

What is the economy of social media like?  Before this question can be answered, it is important to consider all that goes into a social networking site.  There are key topics to think about when creating a social network: What is the purpose of the site? What platform/software/format will be used to provide the intended functionality of the network? Will the network be open or closed – meaning will the created profiles be open to any one or private, or an in between of both? According to an article titled Guide to Social Networking (How to Create One Network and Key Resources)  the amount of privacy a site offers will affect who chooses to join the network (http://www.internationalpeaceandconflict.org/profiles/blogs/guide-to-social-networking-how#.UwuflvQ4U6E). It is also important to give thought to the content of the site and how and when to attract users.  Basically, the first step to creating a new social networking site is the creativity and the brains of the initiator –> the person wanting to start the new site.  In the article mentioned above, it states how the use of a company called NING provides platforms for social networks and offers a high degree of customization.  Some sites may require programming expertise whereas other sites may be more doable for a more average amount of knowledge.  The article mentions other sites like drupal, joomla, mambo, plone, which are open source contentment management systems to aid in the development of a new social network.  If you go to Drupal.org you will see a statement at the top of the page that says “Come for the software, stay for the community.”  This site is revealing how people end up so satisfied with the software that is offered, that they remain loyal to the site (https://drupal.org/).  With open source contentment management systems, a server is needed as a place to install, run, and host the software.  These softwares are provided on the sites in the form of information of how to create a social network, or by purchasing private access to the information that comes with a server to get you started.  A question I often ask myself is “how do social networks make their money if they are free for users?”  As of July of 2013, Mark Zuckerberg, the CEO of Facebook, has a net worth up $3.7 billion as shares of Facebook rose dramatically following earnings (http://www.forbes.com/sites/ryanmac/2013/07/25/mark-zuckerbergs-net-worth-up-3-3-billion-as-facebook-shares-soar-following-earnings/). When really thinking about the question, social networks make their money through advertisements that are presented on their pages.  If you have a Facebook, the next time you log on notice the column of advertisements on the right hand side of the page.  Those companies that are advertising there paid Facebook a certain amount of money depending on the frequency, size, and number of ads they have on Facebook.  Once Facebook became extraordinarily popular in terms of users and successful in terms of money, it became a successful corporation in which people could purchase shares of stock.  As stated above, Zuckerberg earns money from selling shares in Facebook.  Many people want to have their own share of the success of Facebook.  This is true for many other social networks.  They have advertisements and stocks available as ways to accumulate profit.  The product of social media is an intangible one, meaning it is not a physical thing someone can hold.  Social media sells interconnectivity and personalization to its users.  By having a social media account, people are able to befriend, like, follow, chat, whatever it may be with many people around the world.  They can personalize their own information and share what they wish to share.  It’s astonishing that this is all available for no cost to the consumer.  Facebook, Instagram, Twitter, Google+, FourSquare, and so many other sites do not have a cost for their users.  People are interested in having the ability to connect and stay updated with whom ever they please through the internet.  This product is exceedingly and increasingly popular in today’s world.  The consumers of these intangible products are people looking to connect to others whether it be for personal or business use.  Many people of many ages are using social media more and more, attributing to its economic growth and success.

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What is Social Graph?

What is a social graph? I bet many people do not know the answer to that question; I certainly did not without looking into it.  Google says that a social graph is a representation of the interconnection of relationships in an online social network.  Wikipedia says that social graphs are graphs that depict personal relations of internet users.  Clearly the main thing in both definitions is relationships among people on the internet. A great source about social graphs can be found on the website called Freshminds.  The article is titled What the Social Graph is and Why it Matters to Brands.  In this article, it states that the concept of social graphs has been around for quite sometime; it mentions that the idea began in the 1960s and was focused on drawing representations of the connections between people.  Although this was before the internet, and obviously before social media, people were still interested in analyzing the connections between people.  The relationship between social graphs and social media is very interesting.  By companies using social graphs to analyze the relationships between their users, they are able to determine users preferences and how and what people share.  A while ago, Facebook launched a new aspect: “Introducing Graph Search.”  This became the new search bar on Facebook.  Instead of just being able to search for friends names or other users, people can now search for things like “restaurants my friends have been to in New York City.”  Facebook will analyze the social graph of your friends and see who has tagged themselves at a restaurant in NYC and bring up that information for you.  “Pictures of John Smith,” “movies my friends liked,” “places my friends have been,” are among the many searchable topics available through Facebook’s social graph search.  The relationship between social graphs and the economy is quite interesting.  Although, it may not seem like there is an evident relationship between the two, there certainly is.  According to the article from Freshminds, the more a social media company knows about the social graphs of its users, “the more they can tailor and personalize” the social media experience for each user.  This allows the company to monetize the network.  Facebook users bring about $1.20 a year per person.  The more a company knows about its users through social graphs, the more they can enhance the users’ experience to earn more money per person.  This is in fact how social graphs relate to our lives.  As users, we should know that what we are sharing, liking, uploading, and saying is being stored and recorded in some way to become social graphs.  Freshminds says that Facebook knows who your friends are, knows what events you and your friends go to, knows what pictures you and your friends are in, knows our shared likes, and so much more.  In the article New Kids on the Block: Exploring the Google+ Social Graph, there is a great analysis of Google+ users.  A few very interesting things that the social graph revealed was that single male users were the most common to share their phone numbers and more “personal data,” and people who share their phone numbers are called “tel-users” because they are associated with risk taking by offering that amount of information on a social site.  What is personal to one person may not be to another.  Everyone has their own definition of “personal” information, and therefore have the ability to share what they choose.  With the analysis of connections, we as users can be provided with a more enhanced and personalized experience with personalized advertisements that are a result of our connections with others.  Social graphs are used to tailor experiences more specifically for users to increase the success of social networks through what they know about customer relationships.  The analysis of social graphs is likely to increase in the future, especially if the idea has been around since the 1960s and has come such a long way since then.  Referencing again the article form Freshminds, it states the importance of social graphs for brands.  It mentions how Amazon can us a social graph from a source like Facebook to help users choose products for their friends birthdays based on their connections.  The creativity of the companies to use social graphs is what determines how well they will succeed with the use of social graphs.  They can enhance customer preferences, increase the economic benefit to sites, and generate overall success for social media companies.

For more about the article from Freshminds, please see http://www.freshminds.net/2012/02/what-the-social-graph-is-and-why-it-matters-to-brands/.

“You are what you share” (CL).

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Social Media Users

After determining what social media actually is, it is very interesting to really look at the users.  Because social media is made up of many different sources, Facebook, Linkedin, Twitter, Instagram, blogs, etc, there are many people that can be considered social media users. According to the source Statistic Brain, in a recent analysis of social media, there are billions of users.  It reveals the different types, countries, ages, and percentages of different social media platforms.  http://www.statisticbrain.com/social-networking-statistics/ When looking at the users by country, the previous website can also be used to reveal the top ten most engages countries.  The more urban and developed countries are more likely to use social media.  Some examples are America, China, India, Japan, Brazil, and many more.  First-world countries that are successful in terms of technology and finance are more likely have many people who can afford individual devices that allow them to have social media accounts: computers, cellphones, and tablets. Continents wise, the continents that have many first-world or developed countries are more likely to have social media users.  For instance, North America is more likely to have social media users than Antarctica. The demographics of social media users are for the most part young adults.  I would personally say ages 15 to 30.  Of course there is room for adjustment with those ages because there are most likely many 13 year olds who have Instagrams, as well as the 60 year old bosses of companies who are using Linkedin to recruit new employees.  An article titled The Demographics of Social Media Users  claims that young adults are the most common age demographic to use social media sources.  It says  that internet users  who are likely to use social networking sites are typically people under the age of 50.  This website gives an average age of 18-29 are the most common age demographic for social media.  Women are more likely to use social media than men.  Furthermore, people living in urban settings are significantly more likely to use social networking sites than those living in rural settings.  More information about demographics can be found on the article’s webpage: http://pewinternet.org/Reports/2013/Social-media-users.aspx. It is important to think of each platform individually on a country and subculture basis because the demographics are different for each site as well as each part of the world.  Linkedin, because it is used for business, will have a typically older age range, as well as a higher education range of users.  Where Facebook on the other had has many users with a variety of ages, in the link mentioned above, 25% of Facebook users are under the age of 10.  Breaking it down on a country and subculture level, the more developed nations will have more users because they are more likely to be able to afford the devices necessary to have social media accounts: cell phones, computers, tablets, etc., (as previously stated). I would have to say that smedia’s (as Mahogany calls it) importance relates to the people around the world that use it.  The President of the United States, the Roman Catholic Pope, and many other leaders use social media; four in five leaders have a twitter account.   This allows people all over the world to stay connected to current events and important pieces of information on a daily basis.  It is the many types of people around the world that make social media so important.  It is not just the numbers, but who and how people are using social media and what they are sharing. It is constantly growing; more and more people are becoming social media users.  From leaders to children, there are many people throughout the world that make social media what it is today.  

“You are what you share” (Charles Leadbeater).

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What is Social Media?

What is social media? The average person would most likely say Facebook, Twitter, Instagram, etc.  They are completely right, but perhaps they do not necessarily know why these sites are in fact social media.  Although Wikipedia is not always the most ideal source for information, I believe it’s definition of social media works quite well: “Social media refers to interaction among people in which they create, share, and/or exchange information and ideas in virtual communities and networks.”  If there is a source on the internet that allows users to post or share their “unique” thoughts and traits to others, it is a form of social media.  It is not a search engine like Google, Yahoo, or Bing, but more of a place for interaction between people; there is an aspect of communication.  Social media is different from other forms of media because of the interaction aspect. Media is a form of communication about certain events, people, places, trends, etc.  Social media allows the users to interact with the media, i.e. commenting, liking, sharing, voting, on many differing topics and forms of social media.  About.com explains this well: http://webtrends.about.com/od/web20/a/social-media.htm.  According to the links provided in the assignment, http://www.sharethis.com/publishers/services-directory#sthash.3kLlGeLJ.dpbs and http://en.wikipedia.org/wiki/List_of_social_networking_websites, Facebook, Instagram, Twitter, Linkedin, Flickr, Hotlist, Tagged, and many other outlets are forms of social media.  Instagram for instance, allows users to share pictures that they can edit with different filters.  These pictures become a life album that is executed in a way to make the life of the users anything they want their followers to perceive as reality.  Twitter on another note, can be used in many different ways.  Not only is it a form of status update, but it is a place where users can upload pictures, share links to websites, hashtag popular trending ideas, all while still having the ability to interact with others.  Many companies use Twitter, as well as other forms of social media, as a marketing tool to attract customers to their product or service.  Even our President has a Twitter account so people can follow him and see what he has to say on a moment to moment basis. Social media in general offers many platforms for people to stay up to date with the actions, thoughts, and opinions of daily occurrences that users choose to share with their friends and followers.  This blog that you are reading right now is social media. I am sharing my thoughts about social media on this social media source; you as the reader have the ability to reflect on what I am saying and comment below.  There is the interaction aspect of social media that I am referring to. As stated above, Google, Yahoo, and Bing are not forms of social media; they are search engines where people type in a topic they would like to know more about, and the search engine provides the user with top pages of related information.  Search engines are open to interpretation in the sense that the users can refine and adjust their searches to get a more specific and tailored result.  They are not a source for people to necessarily interact and communicate with each other.  The following hyperlink provides information about how Google is not a source of social media, but is still however, in competition with different forms of social media as they are becoming a source of sharing information between users: http://searchenginewatch.com/article/2064960/Is-Google-a-Social-Media-Company. It is important to understand what social media is and how it can be used in today’s world.  For companies, it is crucial to make sure what is being said and posted is appropriate to the company and to the company’s goals.  For individuals, it is also important to sensor what is being posted so that the “ridiculous” posts do not cause problems either in life or in the workplace of the individuals.  

Remember, “you are what you share” (Charles Leadbeater)

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