Executive Interviews: Interview with Andrew T Stephen on Social Networking
May 2010 - By Dr. Nagendra V Chowdary

Andrew T Stephen
Assistant Professor of Marketing, INSEAD and a winner of Google-WPP Marketing Research Award (2010)

• Many believe that Web 2.0 has resulted in “Enterprise 2.0”, a term coined to describe efforts to bring technologies such as social networks and blogs into the workplace. However, according to Robert Half Technology’s survey, the executives’ biggest concern was that social net working would lead to social notworking, with employees using the sites to chat with friends instead of doing their jobs. Some bosses also fretted that the sites would be used to leak sensitive corporate information. How do you think, therefore, companies should draw lines between acceptable and not acceptable ‘corporate social behavior’?
  This is an internal company issue and it is impossible to say in general terms what companies should do in managing their employees’ usage of social networking. That said, decades of academic studies into formal and informal person-to-person networks within organizations suggests that there are many benefits from fostering informal social ties within companies, particularly large companies. It helps teamwork be more successful, helps manage and navigate change (e.g., mergers/takeovers, new policies, new management, etc), and helps in innovation and idea generation. So I think that if these informal networks start to grow in some online space it is not in and of itself a bad thing. But if employees abuse the privilege and end up wasting time then that’s obviously a problem.

• Can you give us a few examples of successful and unsuccessful online (social media) campaigns? What stylized facts can be inferred from such campaigns?
  Ford Fiesta Movement. In April-November 2009, Ford ran a campaign to precede the launch of the 2011 Fiesta sub-compact car in North America. They gave a car (the European version of the Fiesta) to 100 carefully selected individuals (or, in some cases, couples). These ‘agents’ had to drive the car (Ford paid for fuel and insurance) for the six months and were asked to use Twitter to tweet about their experience, to make videos and post them on YouTube, and to take photos and post them on Flickr. This campaign generated a lot of buzz – lots of media attention, lots of bloggers talking about it, and also by the end of 2009 Ford says that about 50,000 people had expressed interest in purchasing the car upon release (and almost all of these sales leads had not owned a Ford car beforehand). This was a successful campaign in building buzz and even in generating potential sales. It worked because it put a ‘product’ into the hands of real people and had them use social media to share their experiences with others. This is characteristic of a viral marketing campaign where product samples are sent out to people and they are meant to talk about the product with friends, but on a different scale since you cannot send out lots of cars to people. Social media helped to disseminate information that let potential customers learn about the car, see it being used by real people, and, basically, live vicariously through others’ experiences. This was a powerful use of social media to build interest in a new product, prior to its launch.

• The Internet was built on the freedom of expression. Society wants someone held accountable when that freedom is abused. And major Internet companies, like Google and Facebook, are finding themselves caught between those ideals. They face a public that increasingly is more inclined to blame them for cyber-bullying and online transgressions. Can you highlight some of the recently reported and serious privacy concerns engulfing the social networking sites? Have you noticed any cyber-bullying instances and what was the public response to them? How do you think Internet companies should go about addressing the social antipathy over cyber-bullying and privacy concerns?
  Privacy is a big issue that continues to be debated and will evolve over time. Facebook has received a lot of criticism for sometimes being too lax on privacy, for example. But the current system, which is largely based on the principle of ‘opt-in’ meaning that users have to opt-in to services and should be aware that they are giving away some of their privacy, seems to be a reasonable first step. Ultimately, it is up to the user – her or himself – about what they share online. If you don’t want other people to know about something, don’t put it online. That’s a simple principle to follow!
  Regarding cyber-bullying, this is a big concern among parents of teens who are going online and using Facebook, MySpace, Twitter, etc. Cyber-bulling can be harmful to children and teens because it can make them feel socially ostracized. This is a problem and it falls back on the parents of these children to monitor their use and to educate them on these kinds of potential problems. That said, there are many social benefits to be had by someone who uses online social networking platforms, so, at the end of the day, the benefits and the potential risks need to be weighed against each other.
  Internet companies should not be blamed for these problems. It is not entirely their responsibility to police these things or to worry about privacy issues – as long as they hold up their end of the bargain by making sure that they do not illegally share information about their users or sell it for purposes that were not made known to users in advance. These companies are businesses at the end of the day and, while they do provide increasingly important social services to millions of people, it is up to the people – the users – to take care with and manage their own privacy. The Internet companies should play a role in educating users about privacy and make available tools for managing one’s privacy, but the ultimate responsibility is in the user’s hands.

• With many players queuing up to slice the market share, what would be the future of social networking companies? Myspace has been acquired by Newscorp, while YouTube was acquired by Google. And Google has recently launched its own social networking site, Buzz. How do you think they should be positioning themselves to be dominant players? Who, according to you, would dominate the social networking market?
  It is impossible to predict what will happen and what this landscape will look like even a year from now. There is a trend for large media or Internet companies to try to acquire these innovative and entrepreneurial startups but there will always be new ideas, new technologies, and new startups coming along.

• Both Twitter and Facebook played a starring role in the online campaign strategy that helped sweep Barack Obama to victory in the presidential race. But like Mr Obama, social networks have also generated great expectations along the way on which they must now deliver. How should they prove to the world that they are here to stay and demonstrate that they are capable of generating the returns that justify the lofty valuations investors have given them?
  The proof is in the statistics. Facebook now has over 400 million users, and a large proportion of these users are active and login almost every day. The average Facebook user now spends just under one hour per day on Facebook. Twitter’s userbase is growing and, more importantly, tweeting more often. So I think that the proof lies in how well these networks do in growing their size and, even more critically, increasing the level of activity from each user. This signals that using these networks (as opposed to just having an account) is becoming part of more peoples’ everyday lives, which makes them ‘sticker’ and more likely to succeed and persist in the long run.