Business Case Studies, Executive Interviews, Randy L Allen on Social Networking

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Executive Interviews: Interview with Randy L Allen on Social Networking
May 2010 - By Dr. Nagendra V Chowdary


Randy L Allen
Associate Dean, Marketing and Corporate Relations and Consultant-in-Residence, The Johnson School, Cornell University


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  • As a marketing professional with loads of consulting experience, how do you describe the advent and the (near) ubiquitous presence of blogs, social networking sites, YouTube, LinkedIn, Orkut, Twitter, etc? What do these ‘social’ innovations signify at a very personal level?
    The advent of social media is a major cultural and business phenomena and has created a shift in the relationship within marketing and its target audience, be it an individual consumer or a company. It has and will continue to reshape the ways in which companies’ communicate with customers and market their products and services. Social networking promotes easy viral marketing and communication to large audiences at low cost. In addition, to helping companies efficiently communicate outwardly, social media facilitates the collection of information from target audiences, which can be invaluable in shaping future products, services and communications. Smaller companies, new brands and new products especially benefit from leveraging social media for both speaking and listening to customers. Geographic boundaries disappear with social media so that a company in any country can reach an individual in any location to make a sale or solicit input if desired.
    Many companies use social media to solicit input on products, services, etc., by asking detailed questions. Prior to the advent of social media companies relied more on word of mouth for customer feedback.
    At the same time, the strength of social media complicates marketing’s goal of communicating clear and consistent messages about a company’s products and services. At any time, the message marketing creates can be modified or overtaken by messages generated in the social media space. The potential exists for marketing’s messages to be completely subsumed by competing, parallel, or overlapping messages in social media.
    At the personal level, social media serves a basic need of individuals to make connections and to communicate with one another. It has enhanced both the quality and quantity of family and friends’ communications. Social media has created new ways of reaching out to people with similar interests. It has facilitated a sense of community and belonging, which had been reduced, as individuals became more mobile and geographically distant from one another.

  • How do you look at the ‘social’ media segments – there are various types of online social media from social networks of friends and professionals to microblogging services, to video sharing sites, with informal online network of friends (Facebook, Orkut, QQ), artists (MySpace), visual junkies (YouTube, Hulu, Vimeo, Daily Motion for Videos and Flickr, Picasa and Snapfish for photos) and professionals (LinkedIn)? Do you foresee a proliferation and consolidation (either sequentially or simultaneously) in social media segments?
    We look at social media sites more for the type of site and the media these are using than by the audience to which these appear to cater, e.g., friends, family or professionals. The reason for this approach is that the lines by segment are very blurry. For example, while Facebook would seem to be for friends and family and may have been its early years, it has morphed beyond that to interconnect people in professional, cause, and other affinity groups. We have a Johnson School Facebook fan page to support marketing and communication efforts of the school in reaching its alumni, students, prospective students and friends. We see that people want and receive information through many channels. Therefore, it is important for us to have a presence in multiple social media vehicles to reach our target audiences via their preferred method. The same approach applies to companies as well.
    I would expect there to be consolidation in social media, as some players achieve large-scale membership, usage and dominance. This is typical of all nascent industries, as they mature over time. At the same time, I believe there will continue to be proliferation, given the ubiquitous nature of social media, the ease of establishing new social media vehicles and the wide interests of the audiences for social media. What may be more interesting are potential linkages between social media sites that will streamline the management of them by the individual and reduce the need for users to create the same information in multiple social media sites. This could be done via consolidation or perhaps through strategic alliances among social media sites and activities.

  • Every country has its cliques, whether based on education, social background or spiritual beliefs. In Spain, Italy and Latin America as well as France, business people speak of the influence of Opus Dei, a conservative Catholic lay order which supports a number of business schools. America has its Ivy League alumni groups and Rotary Clubs. Chinese business people often rely on guanxi, or personal connections. How then are the (online) social networks different from the old-style networks?
    Social media networks are not dramatically different than networks that have always existed. They serve the same purpose, but simplify the process of building and maintaining the networks. They also provide the opportunity to develop new networks with more focused interests than may have previously existed. The disadvantage of some social media networks versus older social networks is the anonymity they provide. When the network is not among known associates, the social media network needs alternative mechanisms for trust to develop among members of the network.

  • Financial Times recently (March 17, 2010) reported that social networking website Facebook has capped a year of phenomenal growth by overtaking Google’s popularity among US Internet users, with industry data showing it has scored more hits than the search engine. Facebook’s membership has crossed 400 million (430.2 million, as per comScore) in February 2010 (when it celebrated its sixth birthday). Is it a sign that the web is becoming more sociable than searchable?
    The web is definitely becoming more sociable every day. Given the hectic pace of most people’s lives today and their physical distance from family and friends, social media has become a way for us to keep in touch and update multiple members of our networks simultaneously and more effectively than with e-mail. This does not lessen the importance of search as an Internet activity, but it will probably continue to diminish as a percentage of web activity. However, there is room for new innovation in the search capability on the Internet. As the volume of information on the web continues to explode, according to IDC at a compounded growth rate of 57%, there is a growing need for new search approaches to yield results that are more usable and understandable. "The amount of digital information created last year alone is equal to three million times the amount of information in all the books ever written." (http:// www.informationweek.com/news/ internet/search/showArticle.jhtml? articleID=197800880)



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