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Users of the world, unite! The challenges andopportunities of Social Media
Andreas M. Kaplan*, Michael Haenlein
ESCP Europe, 79 Avenue de la Re´ publique, F-75011 Paris, France
1. The specter of Social Media
As of January 2009, the online social networkingapplication Facebook registered more than 175million active users. To put that number in perspec-tive, this is only slightly less than the population of Brazil (190 million) and over twice the population of Germany (80 million)! At the same time, everyminute, 10 hours of content were uploaded to thevideo sharing platform YouTube. And, the imagehosting site Flickr provided access to over 3 billionphotographs, making the world-famous LouvreMuseum’s collection of 300,000 objects seem tinyin comparison.According to Forrester Research, 75% of Internetsurfers used ‘‘Social Media’’ in the second quarter of 2008 by joining social networks, reading blogs, orcontributing reviews to shopping sites; this repre-sents a significant rise from 56% in 2007. The growthis not limited to teenagers, either; members of Generation X, now 35—44 years old, increasinglypopulate the ranks of joiners, spectators, and crit-ics. It is therefore reasonable to say that SocialMedia represent a revolutionary new trend thatshould be of interest to companies operating inonline space–—or any space, for that matter.Yet, not overly many firms seem to act comfort-ably in a world where consumers can speak so freely
Business Horizons (2010)
 53
, 59—68www.elsevier.com/locate/bushor
KEYWORDS
Social Media;User GeneratedContent;Web 2.0;Social networking sites;Virtual worlds
Abstract
 The concept of Social Media is top of the agenda for many businessexecutives today. Decision makers, as well as consultants, try to identify ways inwhich firms can make profitable use of applications such as Wikipedia, YouTube,Facebook, Second Life, and Twitter. Yet despite this interest, there seems to be verylimited understanding of what the term ‘‘Social Media’’ exactly means; this articleintends to provide some clarification. We begin by describing the concept of SocialMedia, and discuss how it differs from related concepts such as Web 2.0 and UserGenerated Content. Based on this definition, we thenprovide a classification ofSocialMedia which groups applications currently subsumed under the generalized term intomore specific categories by characteristic: collaborative projects, blogs, contentcommunities, social networking sites, virtual game worlds, and virtual social worlds.Finally, we present 10 pieces of advice for companies which decide to utilize SocialMedia.
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2009 Kelley School of Business, Indiana University. All rights reserved.
* Corresponding author.
E-mail addresses:
 mail@andreaskaplan.eu (A.M. Kaplan),haenlein@escpeurope.eu (M. Haenlein).0007-6813/$ — see front matter
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2009 Kelley School of Business, Indiana University. All rights reserved.doi:10.1016/j.bushor.2009.09.003
 
with each other and businesses have increasinglyless control over the information available aboutthem in cyberspace. Today, if an Internet user typesthe name of any leading brand into the Googlesearch, what comes up among the top five resultstypically includes not only the corporate webpage,but also the corresponding entry in the onlineencyclopedia Wikipedia. Here, for example, cus-tomers can read that the 2007 model of Hasbro’sEasy-Bake Oven may lead to serious burns on chil-dren’s hands and fingers due to a poorly-designedoven door, and that the Firestone Tire and RubberCompany has been accused of using child labor in itsLiberian rubber factory. Historically, companieswereabletocontroltheinformationavailableaboutthem through strategically placed press announce-ments and good public relations managers. Today,however, firms have been increasingly relegated tothe sidelines as mere observers, having neither theknowledgenorthechance—or,sometimes,eventheright–—to alter publicly posted comments providedby their customers. Wikipedia, for example, ex-pressly forbids the participation of firms in its onlinecommunity.Such an evolution may not be surprising. After all,theInternetstarted outas nothing more than a giantBulletin Board System (BBS) that allowed users toexchange software, data, messages, and news witheach other. The late 1990s saw a popularity surge inhomepages, whereby the Average Joe could shareinformationabouthisprivatelife;today’sequivalentwould be the weblog, or blog. The era of corporateweb pages and e-commerce started relatively re-cently with the launch of Amazon and eBay in1995, and got a right ticking-off only 6 years laterwhen the dot-com bubble burst in 2001. The currenttrendtowardSocialMediacanthereforebeseenasanevolution back to the Internet’s roots, since it re-transforms the World Wide Web to what it wasinitiallycreatedfor:aplatformtofacilitateinforma-tion exchange between users. But does that meanthat Social Media is just old wine in new bottles?Probably not! As we will delve into further, thetechnical advances that have been made over thepast 20 years now enable a form of virtual contentsharing that is fundamentally different from, andmore powerful than, the BBS of the late 1970s.This article discusses the challenges and opportu-nities that emerge from this evolution for firms, andprovides structure to better understand the rapidlyevolvingfieldofSocialMedia.WebeginbyprovidingadefinitionandclassificationofSocialMediabylookingat their historical roots, technical specificities, anddifferences from other entities such as Web 2.0 andUser Generated Content. We then focus on sixtypes of Social Media–—collaborative projects, blogs,contentcommunities,socialnetworkingsites,virtualgame worlds, and virtual social worlds–—and presentways in which companies can efficiently make use of these applications. Based on this analysis, we thenderive a set of 10 recommendations companiesshould follow when thinking about developing theirownSocialMediastrategy,beitwithrespecttotheseaforementioned types or other applications whichmight emerge in the future.
2. What is Social Media–—And what is itnot?
As highlighted, the idea behind Social Media is farfrom groundbreaking. Nevertheless, there seems tobe confusion among managers and academic re-searchers alike as to what exactly should be includ-edunderthisterm,andhowSocialMediadifferfromthe seemingly-interchangeable related concepts of Web 2.0 and User Generated Content. It thereforemakes sense to take a step back and provide insightregarding where Social Media come from and whatthey include.By 1979, Tom Truscott and Jim Ellis from DukeUniversity had created the Usenet, a worldwidediscussion system that allowed Internet users topost public messages. Yet, the era of Social Mediaas we understand it today probably started about 20years earlier, when Bruce and Susan Abelsonfounded ‘‘Open Diary,’’ an early social networkingsite that brought together online diary writers intoone community. The term ‘‘weblog’’ was first usedat the same time, and truncated as ‘‘blog’’ a yearlater when one blogger jokingly transformed thenoun ‘‘weblog’’ into the sentence ‘‘we blog.’’ Thegrowing availability of high-speed Internet accessfurther added to the popularity of the concept,leading to the creation of social networking sitessuch as MySpace (in 2003) and Facebook (in 2004).This, in turn, coined the term ‘‘Social Media,’’ andcontributed to the prominence it has today. Themost recent addition to this glamorous groupinghas been so-called ‘virtual worlds’’: computer-based simulated environments inhabited by three-dimensional avatars. Perhaps the best known virtualworld is that of Linden Lab’s Second Life (Kaplan &Haenlein, 2009c).Although the list of the aforementioned applica-tions may give some idea about what is meant bySocial Media, a formal definition of the term firstrequires drawing a line to two related concepts thatare frequently named in conjunction with it: Web2.0 and User Generated Content. Web 2.0 is a termthat was first used in 2004 to describe a new way inwhich software developers and end-users started to60 A.M. Kaplan, M. Haenlein
 
utilize the World Wide Web; that is, as a platformwhereby content and applications are no longercreated and published by individuals, but insteadare continuously modified by all users in a partici-patory and collaborative fashion. While applicationssuch as personal web pages,Encyclopedia BritannicaOnline, and the idea of content publishing belong totheeraofWeb1.0,theyarereplacedbyblogs,wikis,and collaborative projects in Web 2.0. Although Web2.0 does not refer to any specific technical update of the World Wide Web, there is a set of basic function-alities that are necessary for its functioning. Amongthem are Adobe Flash (a popular method for addinganimation, interactivity, and audio/video streams toweb pages), RSS (Really Simple Syndication, a familyof web feed formats used to publish frequentlyupdated content, such as blog entries or news head-lines,inastandardizedformat),andAJAX(Asynchro-nous Java Script, a technique to retrieve data fromweb servers asynchronously, allowing the update of webcontentwithoutinterferingwiththedisplayandbehavior of the whole page). For the purpose of ourarticle, we consider Web 2.0 as the platform for theevolution of Social Media.When Web 2.0 represents the ideological andtechnological foundation, User Generated Content(UGC) can be seen as the sum of all ways in whichpeople make use of Social Media. The term, whichachievedbroadpopularityin2005,isusuallyappliedto describe the various forms of media content thatare publicly available and created by end-users.According to the Organisation for Economic Co-operation and Development (OECD, 2007), UGCneeds to fulfill three basic requirements in orderto be considered as such: first, it needs to bepublished either on a publicly accessible websiteor on a social networking site accessible to a select-ed group of people; second, it needs to show acertain amount of creative effort; and finally, itneeds to have been created outside of professionalroutines and practices. The first condition excludescontent exchanged in e-mails or instant messages;the second, mere replications of already existingcontent (e.g., posting a copy of an existing newspa-per article on a personal blog without any modifi-cations or commenting); and the third, all contentthat has been created with a commercial marketcontext in mind. While UGC has already beenavailable prior to Web 2.0, as discussed above,the combination of technological drivers (e.g.,increased broadband availability and hardwarecapacity), economic drivers (e.g., increased avail-ability of tools for the creation of UGC), andsocial drivers (e.g., rise of a generation of ‘‘digital natives’’ and ‘‘screenagers’’: younger agegroups with substantial technical knowledge andwillingness to engage online) make UGC nowadaysfundamentally different from what was observed inthe early 1980s. Based on theseclarifications of Web2.0andUGC,itisnowstraightforwardtogiveamoredetailed definition of what we mean by Social Me-dia.Inourview–—andasusedherein–—SocialMediaisa group of Internet-based applications that build onthe ideological and technological foundations of Web 2.0, and that allow the creation and exchangeof User Generated Content.Within this general definition, there are varioustypes of Social Media that need to be distinguishedfurther. However, although most people would prob-ably agree that Wikipedia, YouTube, Facebook, andSecondLifeareallpartofthislargegroup,thereisnosystematic way in which different Social Media ap-plicationscanbecategorized.Also,newsitesappearin cyberspace every day, so it is important that anyclassificationschemetakesintoaccountapplicationswhich may be forthcoming. To create such a classifi-cation scheme, and to do so in a systematic manner,we rely on a set of theories in the field of mediaresearch(socialpresence,mediarichness)andsocialprocesses (self-presentation, self-disclosure), thetwo key elements of Social Media. Regarding themedia-related component of Social Media, socialpresence theory (Short, Williams, & Christie, 1976)states that media differ in the degree of ‘‘socialpresence’–—definedastheacoustic,visual,andphys-ical contact that can be achieved—they allow toemerge between two communication partners.Social presence is influenced by the intimacy (inter-personalvs.mediated)andimmediacy(asynchronousvs.synchronous)ofthemedium,andcanbeexpectedto be lower for mediated (e.g., telephone conversa-tion) than interpersonal (e.g., face-to-face discus-sion) and for asynchronous (e.g., e-mail) thansynchronous (e.g., live chat) communications. Thehigher the social presence, the larger the socialinfluence that the communication partners have oneach other’s behavior. Closely related to the idea of social presence is the concept of media richness.Media richness theory (Daft & Lengel, 1986) is basedon the assumption that the goal of any communica-tion is the resolution of ambiguity and the reductionof uncertainty. It states that media differ in thedegree of richness they possess–—that is, the amountofinformationtheyallowtobetransmittedinagiventime interval–—and that therefore some media aremoreeffectivethanothersinresolvingambiguityanduncertainty. Applied to the context of Social Media,we assume that a first classification can be madebased on the richness of the medium and the degreeof social presence it allows.With respect to the social dimension of SocialMedia, the concept of self-presentation states thatUsers of the world, unite! The challenges and opportunities of Social Media 61
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