Chapter 8

w/ additional material

Social Media
Information Systems
Note
• FIRST:
• Understand that this chapter makes no attempt to discuss the latest features of Facebook, Twitter, LinkedIn,
Instagram, Pinterest, or any other social media service.
• Most likely you know much about these already, and further, they are changing so fast that whatever
particulars you learn today will be old when you graduate and obsolete when you begin work.
• Instead, this chapter focuses on principles, conceptual frameworks, and models that will last rather than
changes in social media services and technology and, in this way, will be useful when you address the
opportunities and risks of social media systems in the early years of your professional career.

8-2
1-Introduction
• What is social media?
• How can social media add value to the organization?
• What are the threats associated to social media?

8-3
What is social media?
• Social media (SM) is the use of information technology to support the
sharing of content among networks of users.
• Social media enables people to form communities of practice, or
communities, which are groups of people related by a common
interest.
• A social media information system (SMIS) is an information system
that supports the sharing of content among networks of users.

8-4
THREE SMIS ROLES
• Three organizational units of an SMIS:
• Social Media Providers - Facebook, Google+, LinkedIn, Twitter, etc. provide platforms
• Users - Both individuals and organizations
• Communities - Mutual interests and transcend familial, geographic, and organizational
boundaries

The growth of SM
providers over the past
few years has been
tremendous.
5-SMIS components

*elastic: capable of addressing a

growing number
5-SMIS components

Social media providers develop and operate their own custom, proprietary, social networking application software.

Many social networking vendors use a NoSQL database management system to process their data, though
traditional relational DBMS products are used as well.

In addition to custom applications and databases, SM providers also invest in analytic software to understand how
users interact with their site and with application software.
5-SMIS components

SM data falls into two categories: content and connections.

Content data is data and responses to data that are contributed by users.
For example, you provide the source content data for your Facebook site, and your friends provide response content
when they write on your wall, make comments, tag you, or otherwise publish on your site.

Connection data is data about relationships. On Facebook, for instance, the relationships to your friends are
connection data.
5-SMIS components

For social networking users, procedures are informal, evolving, and socially oriented. You do what your friends do.
When the members of your community learn how to do something new and interesting, you copy them.

The most troubling examples concern user privacy. Many people have learned not to post pictures of themselves in
front of their house numbers on the same publicly accessible site on which they’re describing their new high-
definition television. Many others, alas, have not.

For organizations, social networking procedures are more formalized and aligned with the organization’s strategy.
Organizations develop procedures for creating content, managing user responses, removing obsolete or
objectionable content, and extracting value from content.
5-SMIS components

Users of social media do what they want to do depending on their goals and their personalities.

Social media is creating new job titles, new responsibilities, and the need for new types of training.
HOW DO (SOME) COMPANIES EARN REVENUE
FROM SOCIAL MEDIA?
Having a large social network with strong relationships may not be
enough to guarantee profitability.

Facebook, for example, has more than 1.7 billion active users that
generate over 4.5 billion likes each day. YouTube has more than 1
billion active users that watch more than 6 billion hours of video
each month.22 Both companies thus have extremely large numbers
of active users.

The only problem is that they give their services away for free.
HOW DO (SOME) COMPANIES EARN REVENUE
FROM SOCIAL MEDIA?
As a business student, you know that nothing is free, even in the
world of social media. Processing time, data communication, and
data storage may be cheap, but they still cost something. Who pays
for the hardware required by SMIS? Social media companies like
Facebook, Twitter, and LinkedIn also need to pay people to develop,
implement, and manage the SMIS.
HOW DO (SOME) COMPANIES EARN REVENUE
FROM SOCIAL MEDIA?
YOU ARE THE PRODUCT!!

When a company runs an advertisement, it’s essentially being paid

to put the ad in front of its users. So, in a way, the company is
renting your eyeballs to an advertiser for a short period of time.
Google, for example, is paid to target users with ads based on their
search terms, the sites they visit, and “scans” of their emails. In
essence, then, users are the product being sold to advertisers.

As the old saying says, “If you’re not paying, you’re the product.”
HOW DO (SOME) COMPANIES EARN REVENUE
FROM SOCIAL MEDIA?
The two most common ways SM companies generate revenue are
by advertising and by charging for premium services. On Facebook,
for example, creating a company page is free, but Facebook
charges a fee to advertise to communities that “like” that page!
HOW DO (SOME) COMPANIES EARN REVENUE
FROM SOCIAL MEDIA?
SM Revenue models

• Advertising: views vs. Pay-per-click

• Use increases value: As 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 charges a premium for upgrades or advanced
features
• Sale of apps, virtual goods, affiliate commissions, donations
Conversion rate
• Frequency someone clicks on ad makes a purchase, “likes” a site, or takes some other
action desired by advertiser
HOW CAN ORGANIZATIONS ADDRESS SMIS
SECURITY CONCERNS?
The first step that any organization should take is to develop and
publicize a social media policy, which is a statement that delineates
employees’ rights and responsibilities.

MANAGING THE RISK OF INAPPROPRIATE CONTENT

SMIS security concerns
Internal Risks from Social Media

First, the use of social media can directly affect the ability of the organization to secure their
information resources.
For example, suppose a senior-level employee tweets, “Married 20 years ago today in Dallas,”
or “Class of 1984 reunion at Central High School was awesome,” or “remembering my
honeymoon to Hawaii.” All of these tweets provide attackers with the answers to password reset
questions. Once attackers reset the user’s passwords they could have full access to internal
systems. Thus, seemingly innocuous comments can inadvertently leak information used to
secure access to organizational resources.

Unfortunately, it turns out that it’s not a good idea to tell everyone it’s your birthday because
your date of birth (DOB) can be used to steal your identity
SMIS security concerns
Internal threats: Misuse of social media by employees

How to prevent? Develop and publicize a social media policy: Statement delineates employees’ rights
and responsibilities
Potential consequences
Threats to information security
Increased organizational liability
Tweeting about students, patients, or customer accounts could have legal consequences
Decreased employee productivity
Forbes notes that 64 percent of employees visit non work related Web sites each day
SMIS security concerns
• External threat: Non-employee user generated content
– Junk and crackpot contributions
– Inappropriate content
– Unfavorable reviews
– Mutinous movements (rebellion)
• How to respond?
• Leave it.
• Respond to it.
• Delete it.

8-19
Social media and gamification
• Who has used a dating application?
• Which ones? Which do you prefer and why?
• How do dating applications/ platforms work?

• Tinder, an online dating app, was created in 2012 by five USC

graduates as a way to bring mutually interested users together.

8-20
Social media and gamification
• Essentially, the app used an Elo rating system, which is the
same method used to calculate the skill levels of chess players:
You rose in the ranks based on how many people swiped right
on (“liked”) you, but that was weighted based on who the swiper
was. The more right swipes that person had, the more their right
swipe on you meant for your score.

• Tinder would then serve people with similar scores to each

other more often, assuming that people whom the crowd had
similar opinions of would be in approximately the same tier of
what they called “desirability.”
8-21
Social media and gamification

• Does Tinder resemble games?

• Identify the common characteristics

• Next: The secret of Tinder

• Or.. The Hunter’s loop and how to apply it to your products

8-22
 The hunters loop: one of the most addictive loops
1 2 3 4 5 6
Spotting patterns Imagining the reward The small act Anticipation phase The big act The reward
Finding the target (Battle phase)
Our brains love this Upon spotting the She moves to aplace, Leaving the hunter
activity! target, the hunter starts aiming, waiting for th hungry for the next
to feel her heart eright moment to one!
pounding faster! attack!

She sees the prize! Action starts. Action stops

A few minutes
The hunters loop: one of the most addictive loops
Applied right, this could boost your product to a never before seen
engagement.
The hunters loop: one of the most addictive loops
Applied right, this could boost your product to a never before seen
engagement.
Can you apply the hunter’s loop to Tinder?

8-26
 The case of Tinder
1: Spotting patterns, finding
the target
 The case of Tinder
1: Spotting patterns, finding 2: Envisioning the reward
the target

Whatever
you
imagine….
 The case of Tinder
1: Spotting patterns, finding 2: Envisioning the reward 3: The small act
the target

Whatever
you
imagine….
 The case of Tinder
1: Spotting patterns, finding 2: Envisioning the reward 3: The small act 4: Anticipation
the target

Whatever Waiting for

you the
imagine…. answers...
 The case of Tinder
1: Spotting patterns, finding 2: Envisioning the reward 3: The small act 4: Anticipation 5: reward
the target

Whatever
you Waiting...
imagine….
Analysis of Tinder
• Since tinder is also a “real-life” game, “It’s a match” is sometimes just
triggering the big act (chatting, flirting, meeting)
• And the hunters could continue and get their tangible reward in real
life… Whatever it may be.

• But since most of the “tinder relationships” ends with “it’s a match”,
this phase is the digital reward.
• Because of Tinder’s mobile nature, it is all happening pretty fast.
Which makes it a tight and perfect hunters loop.
Analysis of Tinder
Hence, we can apply the hunter loop into any digital product.

Just:
Make sure the reward is super understandable and desirable
Make sure the “small act” is indeed small

Almost everyone is a hunter: people hunting for dates, art, food,

jobs, etc..
HOW DO SMIS ADVANCE ORGANIZATIONAL
STRATEGY?
• Remember the framework that we discussed in Chapter 3 to
align IS to strategy
• Strategy determines value chains, which determine business
processes, which determine information systems
• Value chains determine structured business processes
• Social media is by its very nature dynamic
• Constantly changing nature of SM means process flows
cannot be designed or diagrammed

8-34
HOW DO SMIS ADVANCE ORGANIZATIONAL
STRATEGY?
how social media contributes to the five primary value chain
activities and to the human resources support activity.
HOW DO SMIS ADVANCE ORGANIZATIONAL
STRATEGY?

Traditional CRM ensured that the organization spoke to customers with one
voice and that it controlled the messages, the offers, and even the support that
customers received based on the value of each particular customer.

Social CRM is dynamic: In addition to the traditional forms of promotion,

employees in the organization create wikis, blogs, discussion lists, frequently
asked questions, sites for user reviews and commentary, and other dynamic
content. Customers then search this content, contribute their own reviews and
commentary, ask more questions, create user groups, and so forth.
HOW DO SMIS ADVANCE ORGANIZATIONAL
STRATEGY?

Product users are amazingly willing to help one another solve problems.

Forum for customers to share insights, rewards to customer provided

assistance, customers providing pre-release reviews.

The primary risk of peer-to-peer support is loss of control. Businesses may not
be able to control peer-to-peer content, so negative comments about cherished
products and recommendations for competitor’s products are a real possibility.
HOW DO SMIS ADVANCE ORGANIZATIONAL
STRATEGY?

For instance, the Japanese earthquake in the spring of 2011 created havoc
in the automotive supply chain when major Japanese manufacturers lacked
power and, in some cases, facilities to operate. Social media was thus used to
dispense news, allay fears of radioactive products, and address ever-changing
needs and problems.

Problem solving requires the open discussion of problem definitions, causes,

and solution constraints. (in front of competitors!)
HOW DO SMIS ADVANCE ORGANIZATIONAL
STRATEGY?

Crowdsourcing is the dynamic social media process of employing users to

participate in product design or product redesign.
HOW DO SMIS ADVANCE ORGANIZATIONAL
STRATEGY?

As previously mentioned, social media is increasingly used for finding

employee prospects, for recruiting candidates, and—in some organizations—for
candidate evaluation.
Organizations use social media sites like LinkedIn to hire the best people more
quickly and at a lower cost.

The risks of social media in human resources concern the possibility of error
when using sites such as Facebook to form conclusions about employees and
job applicants.
Social media and the transformation of business
processes
• Compare the process of restaurant evaluation for
• AAA or Michelin stars
• Vs. Tripadvisor or Zomato
• Focus on Who evaluates, How evaluation is done, When the
evaluation is done, Why the evaluation is done
• How are those evaluations perceived by other customers? By
restaurants being evaluated? What are the implications?
• How does TripAdvisor, AAA and hotels generate their income?
What is the impact of ratings?

8-41
AAA example
• Ratings are defined on the website and in the app:
– AAA Diamond ratings for restaurants represent a combination of the overall food, service, décor
and ambiance offered by the establishment. The descriptive ratings are assigned exclusively to
establishments that meet and uphold AAA’s rigorous Approval standards.
➢ A Five Diamond restaurant provides leading-edge cuisine of the finest ingredients,
uniquely prepared by an acclaimed chef, served by expert service staff led by a maître d’ in
extraordinary surroundings.
➢ A Four Diamond restaurant provide distinctive fine-dining, creatively prepared, skillfully
served, often by a wine steward, amid upscale ambience.
➢ A Three Diamond restaurant provide trendy cuisine, skillfully prepared and served, with
expanded beverage options, in an enhanced setting.
➢ A Two Diamond restaurant provides familiar food, often cooked to order, served in casual
surroundings.
➢ A One Diamond restaurant provides simple, economical food, often quick-serve, in a
functional environment.

8-42
AAA example
• What the user sees:
• A list of hotels or restaurants for each rating on
the website
• Hotels and restaurants with their rating in the
app

8-43
Trip advisor

• Result of a
search for
restaurants
in Beirut

8-44
Trip advisor rating

8-45
8-46
Analysis of AAA vs. Trip advisor
• AAA
• Valuations produced by a small number of trained and
recognized experts
• Using formal, standardized, and often institutionalized criteria
grounded in professional knowledge and industry experience
• Large number of detailed criteria
• Rating is the sum of scores on various criteria
• Performed once every 18 months or so, according to a
schedule

8-47
Analysis of AAA vs. Trip advisor
• Trip advisor
• Valuations produced online by large numbers of anonymous
and distributed consumers
• Using informal, variable, and individual criteria grounded in
personal opinions and experiences.
• Small number of criteria
• Score is the result of an algorithmic computation
• The result of the input of the continuous contribution of volatile
customer content
• Sometime reaction to positive or negative personal encounters

8-48
Conclusions
• It is not clear what they include or exclude
• Display of rated hotels is influential as it shapes image
• Evaluations are market makers
• Users deal with these evaluations differently

• Restaurants/ hotels
• AAA- develop objectives and an improvement strategy
• Tripadvisor- react and micro-manage

8-49
Keep in mind …
Uses social media to transform interactions with customers,
employees, and partners into mutually satisfying relationships with
them and their communities

“If you’re not paying, you’re the product.”: the company is renting
your eyeballs to an advertiser