Transforming Social Media Business Models Through Blockchain

Nitin Upadhyay

• Publisher: Emerald Publishing Limited
• Year: 2019
• Print ISBN: 9781838673024
• eBook ISBN: 9781838673017
• Topic: Betriebswirtschaft
• Subtopic: Business allgemein

Blockchain technology has the potential to disrupt and transform the social media business space, but the existing literature uses complex technical jargon that prevents practitioners from taking advantage of its full potential. 

Nitin Upadhyay overcomes this barrier and offers a uniquely accessible discussion of how blockchain can revolutionise social media business models. His book offers an up-to-date analysis of the real benefits, usage and operationalisation aspects of blockchain and provides a systematic framework for social media business transformation through blockchain technology, all while using a simple, practical terminology. Readers learn about the utility of the blockchain ecosystem, about the innovation value proposition available to social media platforms through blockchain and about how to develop, assess and evaluate change in social media business models. Ultimately, they learn how to utilise blockchain innovation to develop a decentralised, autonomous and distributed ecosystem within the social-media space.  

Transforming Social Media Business Models Through Blockchain is essential reading for stakeholders associated with social media, blockchain and management, including practitioners, leaders, and scholars working with industry partners.

1

Social Media Business Model

Social media platforms have become hugely popular and involve people's participation in content know-how. In this chapter, readers will understand the changing landscape of social media platforms.

Introduction

The transaction is not a new phenomenon. Human societies have always considered and observed it. The first mystical transaction between Adam and Eve unfolded the realities of the world. Perhaps one can argue the significance of the instigator to trigger the transaction, but we must understand that the transaction happened between two people accepting the consequences of the transaction. Transactions are the fundamental unit for the people and community to interact, communicate, converse, collaborate and co-exist (Agnihotri, Kothandaraman, Kashyap, & Singh, 2012; An & Weber, 2015). The changing dimensions of the social interact interface have given rise to many technology-driven ecosystems, and Internet is the prime.

The emergence of the Internet has impacted the way that we interact and perform business transactions. When Internet got commercialized, people were quite apprehensive about its capability and applicability. Most parts of the world had limited access to participate in the World Wide Web network. As suggested by the researchers, the adoption of the technology follows a bell curve, which was very well applicable to the Internet (Anderson, 2006; Bjørn-Andersen, Rasmussen, & Rasmussen, 2009). The 1990s era had few adopters – innovators and early adopters, and they experimented in a variety of ways by rolling services and solutions over the World Wide Web.

Social media has been democratized such that it is no longer the choice for the business but a necessary strategy and added dimensions to achieve competitiveness (Baghdadi, 2013; Bechmann & Lomborg, 2013). In a recent report by McKinsey, it has been identified that the contribution of social media to business could range between $900 billion and $1.3 trillion. Enterprises are now exposed to so much potential of social media and have a vast opportunity space to leverage and build a competitive advantage (Ballantyne, 2014). However, the only source to added value is not only the inclusion of social advertisements and campaigns but also having a proper strategic composition of collaborations and cooperation within and across the industries. Most of the times, businesses are unclear about the strategic advantage and value proposition of the social media landscape. Thus they are unable to build the capability, brand, relationships, and goodwill thereby constrained to contribute to increased efficiency, performance and productivity.

There is no business that is virtually untouched by social media. It has provided great potential, which was earlier untapped, to reach to the masses, persuade them about their products and services (Berthon, Pitt, McCarthy, & Kates, 2007). Moreover, businesses have outgrown their presence and brand imprint significantly. Social media has given rise to the dynamic global community to contribute, collaborate and cooperate, through the Internet. Many web and mobile applications facilitate the dynamic interaction of the worldwide community. Web 2.0, as we all know has given the place for the social media platforms, is a continually evolving and expanding domain. It improvises and makes social media applications more user-friendly. Conventionally, the participants were restricted to view the content of the business on their websites. But, now in the cyberspace, people can comment, share, like, discuss, collaborate and generate their content. For the business, such engagement touch points are turning as treasure points. Business could understand more about their products and services from virtually everywhere.

Social Media in Business

Myriad applications contribute to the success of social media (Butterfield, 2003; Enders et. al., 2008). The advancements in the Internet of Things (IoT), high-end infrastructure, smart devices and smart platforms have been able to provide an inclusive and immersive experience and different levels in participation and collaboration (Choi & Varian, 2012). The world is not restricted to Facebook, Twitter, LinkedIn, WhatsApp, Instagram, Snapchat, etc., but the choices are many, and the implications of each application bring new opportunities and possibilities for the businesses. Sharing of one's augmented avatar on the new iPhone XR or a live message on Samsung Note 9 brings impeccable experience to the participation. The connected devices are breaking the physical proximities and allowing the different world to meet and provide an incredible experience. The social media platforms and applications of today's era are pushing the dynamic global community not just to come closer to collaborate, cooperate and participate but to get immersed in the environment.

Businesses can take optimal benefit by using single or the combination of social media applications (Chen, 2009). With the ever-increasing demand on the added value features integrated with the new technologies, it has become quite a challenge to the businesses. They need to understand the scope, feasibility and potential of using the next-generation social media platforms and applications (Chesbrough & Rosenbloom, 2002). Though social media provide countless opportunities, let us know how we can leverage such opportunities systematically. There exist five ideal opportunities (Kunz & Werning, 2013; Tuesta et al., 2015; Wang, White, & Chen, 2015), Fig. 1.1:

Fig. 1.1.Social Media Opportunities.

Global market presence: No matter where you run your business and which market you operate on, social media provide unprecedented channels to make you reach to virtually everywhere.

Moreover, by utilizing search engine optimization techniques, one can become visible on the giant web. The higher visibility one has on the Internet, the higher market presence and business opportunity one may expect to have. Social media helped Groupon to increase its business manifold, and in just five years enabled it to reach to 12 billion dollars' worth value. Groupon became the global brand and got transformed by social media.

Groupon reconfigured the industry by including social media to expand its discounted coupon offers to the vast array of customers. These offers usually are for a limited time, and thus optimal numbers are required to redeem the offers. The blend of social media in the marketing of coupons guaranteed Groupon to expand the business and also to attain customer segments.

Communication: Business players can achieve affordable communication by appropriately using social media strategies. It can be used for both formal and informal discussions. The company employs the former, and the employees adopt the latter to channelize the communication. Social media applications can amplify informal communication structure, and people can leverage it for sharing project goals and artefacts, and gaining efficiency and knowledge. Moreover, social media applications result in diversified communication as it allows a different type of media to be shared and utilized. Companies like Salesforce.com and Cisco have strategically introduced social media into their respective business. To keep abreast about their product offerings and an edge on training capabilities, Saleforce.com started utilizing YouTube videos to train customers resulting in cut down of efforts of worth several 100 salespeople. Cisco deals with a variety of social media platforms to connect with different stakeholders. It utilizes almost 31 blogs to cater to audience covering information about the company, offerings, products and many more.

Moreover, it utilizes Facebook fan pages to spread solutions, offerings, services and relevant information. It also takes advantage of Twitter in expanding its customer base. Flickr has also been used by Cisco to cover photos of products, events and offerings.

Community presence: It is effortless to build the virtual community without the time and space barrier. Social media applications provide various ways by which people can come together to discuss, debate and share topics of common interest. For example, LinkedIn provides the professional community to come together and share concerns and solutions relevant to the group. Business can strategically identify the subcommunities and influencers in the communities. Channelizing offerings, services and solutions through the influencers help in boosting the profit margins and growth.

Collective intelligence: It is an utmost vital part to manage, control and administer the collective knowledge build by the social media stakeholders. As more and more people join the communities, participation in communication results in the knowledge corpora. Businesses can get insights about their product and services and also gather the competitors' business product portfolio. By working on the knowledge corpora generated through the social media communities, a business can get at the edge to compete and perform. Starbucks strategically build products, services and offerings based on collective intelligence. It runs a Facebook fan page and also maintains the MyStarbucksIdea website to collect ideas from the potential consumers. The collective intelligence through social media applications helped Starbucks to acquire more customers, develop insightful experiences, produce useful offerings and execute social responsibility projects. Coca-Cola ‘Freestyle’ vending machine showcases more than 100 options of flavours. The customers get a chance to mix the flavours, taste it and share the experience with their friends on social media. Such kind of insightful details helped the company to launch new and innovative products. Cisco organized a billion-dollar ideas competition, which resulted in contribution from 3,000 participants from 157 countries generating 800 ideas. The winner bagged the 250,000 dollar price. The social media boosted the billion-dollar idea to Cisco, as it costs approximately 321 dollars per idea to yield a billion-dollar business.

Collaboration: The most powerful feature of the social media application is collaboration. It provides various ways for the people to collaborate both on personal and professional fronts. There is a proven track record where communities came forward and have worked together and collaborated on a successful sustainable project like ‘Conserve Forests’. Accenture is a global consulting, technology services and outsourcing company employing more than 200,000 employees worldwide. It has built an interactive collaboration platform utilizing Facebook and LinkedIn to connect and collaborate to run, manage and execute projects.

No matter which segment of the business you are working with, chances may happen that the adoption of social media poses several risks. These risks such as reputation management, information asymmetry, information provenance, integrity and reliability, visible and invisible reach impact the business. Some risks are tied with the core of the organization, i.e. its DNA, but some could be tackled through the technological interventions. Some companies are closed-culture, as they do not believe in sharing and disseminating the information. Thus, they are the one who gets hugely impacted by social media adoptions. For them, it is essential to have a common language and goal for social media communication. Further implementation, integration and interoperability issues need to be tackled to facilitate convergence between different social media platforms and enable data portability.

New Social Media

Interestingly, yesteryears' social media have fed us lots of information. Some were useful, but many were hit by unreliable, poor quality and integrity, untraceable, low credibility and unethical issues. It is a time to develop frameworks and standards to manage, control, administer and regulate the aspects of social media. Regulations to be governed by the appropriate usage of AI and data-enabled technologies.

Moreover, the focus needs to shift from the centralized control, where one central authority controls the aspects of social media, to peer control where the participating peers take the ownership and controls for their actions (Casey & Vigna, 2018). We should have the mechanism to agree collectively on the credibility and integrity of the right information. Each of the contributors should get the reward for the contribution rather only one central authority like Facebook or Google gets all the revenue from the people's contributions. Besides, trust in the information dissemination on social media is crucial. Social media need to play an active role in ensuring that the information and the source provided are accu...

Table of contents

• Cover
• Title
• Copyright
• Dedication
• Contents
• Biography
• Preface
• 1. Social Media Business Model
• 2. Blockchain
• 3. Challenges and Opportunities
• 4. Blockchain Value Proposition
• 5. Blockchain-based Social Media Enterprise
• References