BAU International Berlin
Heinrich Heine Street 15
10179 Berlin
Bachelor Thesis
“The Economy of Social Media”
04.06.2017
Valentin Degen
[email protected] Student ID: 1401015 STATUTORY DECLARATION
I declare that I have authored this thesis independently, that I have not used other than the declaration sources/ resources, and that I have explicitly marked all material which has bee quoted either literally or by content by the used sources. Berlin,...... (Signature)
2 Table of Contents 1Executive Summary ...... 4 2Introduction...... 5 2.1Research Question...... 5 2.2Motivation...... 5 3Theory...... 5 3.1Social Media...... 5 3.2Types of Social Media ...... 6 3.3Social Media Networks...... 9 3.4The Interaction of Users and Businesses on Social Media ...... 9 3.5Assessment and Description of Value ...... 10 3.6Honeycomb Framework...... 11 3.7Pest Analyses ...... 13 4Empirical Part ...... 14 4.1Methodology ...... 14 4.1.1Qualitative Content Analysis ...... 14 4.2Revenue models of Social Media ...... 14 4.2.1Access Models ...... 14 4.2.2Data Collection Methods ...... 15 4.2.3Advertisement...... 17 4.2.3.1Advertisement Payment Methods ...... 17 4.2.3.2Targeting Techniques...... 18 4.2.3.3Advertisement Channels ...... 20 4.2.3.4Advertisement Content ...... 21 4.2.4Virtual Payments and Currencies ...... 21 4.2.5Virtual Goods ...... 23 4.3 Features of Social Media ...... 24 4.3.1Identity ...... 24 4.3.2Conversation...... 24 4.3.3Sharing ...... 26 4.3.4Presence ...... 28 4.3.5Relationship...... 29 4.3.6Reputation ...... 30 4.3.7Groups ...... 30 4.4PEST Analyses...... 31 4.4.1Political ...... 31 4.4.2Economical...... 33 4.4.3Society ...... 33 4.4.4Technology ...... 34 4.5Discussion 0f Revenue Streams ...... 35 4.6Discussion of the Features of Social Media ...... 37 4.7Value for Users and Businesses ...... 38 5Conclusion...... 39 6Table of References...... 40 7Table of Images ...... 51
3 1 Executive Summary This work is about the Economy of Social Media. It is focusing on platforms that are well-known, like Facebook and Twitter. A detailed examination of what is Social Media and its structure is provided. Platforms are introduced with its different purposes and the Value for users and businesses is faced. The variety of unique features for users and businesses in the Social Media environment, are analyzed with the Honeycomb framework. During the research for this work, it exposed, that this tool is a very approved theory. It exists also features of Social Media that consists out of direct Revenue Stream of the platform. These are examined and the Value for users and business are highlighted. The results of the work are informative and give exposure on how features of Social Media creates Value for users and businesses.
4 2 Introduction
2.1 Research Question
How do features of Social Media create Value for users or businesses by considering impacting factors with its consequence?
In order to deliver a thorough answer to this question, sub questions need to be answered:
What is Social Media? What are features of Social Media? What is Value in regard to users and businesses? What are impacting factors?
2.2 Motivation
This academic work will be the final one for my bachelor degrees. By the end of my studies I want to focus on my own business. My interests are in business and IT. IT fascinates me so much, because IT will change a lot in the future. Privately I was focusing on indirect income and I was stumble above Affiliate Marketing and Advertisement models on websites. When I was studying these possibilities, I got really interest in this topic and wanted to know how it works. I took Social Media(SM) as an example, because SM provides a big variety of Advertisement methods and innovations for people. My motivation is, that I want to use the gathered knowledge in my own project.
3 Theory
3.1 Social Media
The term Social Media is a combination of two components: social and media. Media indicates communicating and exchanging information via publications or channels, while social refers to the interaction between individuals within the group or community(Neti, 2011). For the term Social media literature offers an abroad range of definitions. The Bundesverband Digitale Wirtschaft provides the following definition: Social Media is a variety of digital media and technologies, that enables users exchange among each other and to create content alone or together. The interaction on SM platforms combines the correlational exchange of information,
5 opinions, impressions and experiences, plus the contribution on the creation of content(Naber, 2015). The following definition is focusing more on the software aspect, that is forming the foundation for communication of SM platforms: SM platforms are web based technologies and applications that support communication, relation building and information exchange in a social context. Consequently, SM is the bases of communication exchange, between users(Naber, 2015). The last definition provides a broader space to include more platforms that are also based on information exchange. These platforms could be Uber, Amazon and Airbnb. But this work will just cover SM platforms that don't offer a direct chargeable service or product. That means, platforms that are operating as middle mean, to generate revenue are excluded. This work will focus on SM platforms that provide users a free access, but they also can charge users for an extra service. Furthermore, it will be considered SM types mainly from the western world.
3.2 Types of Social Media
SM has different kind of types. These types differentiate with its purposes under each other. The types that are considered in this work are Social Networks, Micro Blogging, Social News, Social Sharing and Instant Messenger. Other SM types like Forums, Blogging, Content Curation platforms, Wikis and Live Streaming platforms are not considered, because either they have no Revenue Stream, or the purpose is already included in a SM platform that will be examined in this work. SM types are introduced with its associated SM platforms that will be assessed in this work.
Social Networks
A Social Networks is an application where people can form online communities. Users can communicate with each other via the Social Network and partly interact in the virtual space. A Social Networking platform is a medium which can be used for sharing opinions, experience, information, etc.(Partridge, 2011). It will be examined two SM platforms, that are Facebook and LinkedIn. Facebook the biggest SM platform on the world. The platform is focusing on connecting people and maintaining relationships. On the platform many features improving the interaction, like games, live videos and many sharing possibilities(Nations, 2016). Another Social Network is LinkedIn that can be understood as a niche network. This Social Network is focusing on the profession of people. LinkedIn connecting experts and
6 executives worldwide to make them more productive and more successful. The platform provides its users access to people, jobs, news, updates and insider information(Weiner(4), 2017).
Micro Blogging Micro Blogging is a form of normal Blogging. A user can publish on a SM Micro Blogging platform short messages/postings. Usually the letters which can be used within a post are restricted. The postings are issued publish or private. That means that all user of a network can make a posting publish, or just for a specific audience and set it private, for example for friends and followers. The postings are issued chronologically like in a blog. Users can receive the postings via different channels like SMS, Email, etc.(Dayter, 2016). The Micro Blogging platform for the examination is Twitter. Twitters mission is: “To give everyone the power to create and share ideas and information instantly, without barriers”(Dorsey, 2016). The platform is well-known for its Tweets. The default settings for Tweets are public. Unlike Facebook or LinkedIn, where users need to approve social connections, users can follow anyone on public Twitter(McMahon, n.d.).
Social News Social News Sites platforms, where users can publish news/content of other websites. Other users can usually make commends. Contributions can usually be read from all users. The unique thing is that users of the Social News platforms vote for prominence. To become a user that can vote and comment you have to register in general. Users can create profiles, where they can add friends and interests. Also, they can get notification via mail about happenings in the SM(Shiring, 2013). The Social News platform for the examination is reddit. Reddit is a Social News platform that is based on Micro Blogging. Reddit bridges communities and individuals with ideas, the latest digital trends and breaking news. Reddit wants to help people to discover places where they can be their true selves and empower the community to flourish. User can create communities on the platform about nearly any topic imaginable. Commenting is very popular on reddit. That provide additional information, vigorous discussion, context and often humor(reddit(4), n.d.).
Social Sharing On Social Sharing sites, users can upload content, that is shared to others users on the platform. This platforms can differ from video too music over photos(Evans, 2010). The platform that will be considered, are YouTube, Snapchat and music.ly.
7 YouTube is a Social Sharing platform and is focusing on videos(YouTube(1), n.d.). The mission of YouTube is, to give all people a voice and show them the world. The platform is based on four basic rights freedom of expression, freedom of information, chance freedom and freedom of belonging(YouTube(2), n.d.). Snapchat is different from Facebook and Twitter, because it let interact people in a new way with each other. Different features make the sharing on the app very entertaining. The app is mostly used by teens and young adults. Snapchat is just a mobile app and offers beside sharing also text chats and video calls(Moreau(1), 2017). Music.ly is a music video app. The 15-second videos are typically people lip-syncing or dancing to some top hits. Also, traditional music stars like Jason DeRulo launching their videos on the platform. The app builds a Social Network based on videos that just entertain people and keep them coming back(Carson, 2016). Instagram is a mix out of Social Sharing and Micro Blogging. Users can share photos and videos with descriptions in a newsfeed. Instagram can be understood as a simplified version of Facebook, with an emphasis on mobile use and visual sharing. Instagram works similar to other SM platforms, users can interact with each other by followings and being followed, commenting, liking, tagging and private messaging. Different to Snapchat, content will be saved(Moreau(2), 2017).
Instant Messenger Are applications that enables users to send instant messages to other users. To communicate users have to establish an account, that is based up on a messenger profile. Often Messengers ask for a security identifier, like a password or email. The established accounts of the Messenger can add each other into contact lists(Gabriel and Röhrs, 2017). The platforms that will be considered in this work are WhatsApp, Telegram and WeChat. WhatsApp provides the communication via text, voice, video, etc. The benefit of WhatsAp is that over 1 billion people use WhatsApp in 180 countries(WhatsApp(2), n.d.). Telegram is a similar to WhatsApp and is offering almost the same communication features. But the focus of the Messenger is on privacy(Toor, 2016). WeChat is a mobile text, voice and Video messaging services that has similarities with WhatsApp and Telegram. But WeChat goes beyond this. It can be understood as the Swiss army knife, that makes the app to the central component of a users life. Beside the basic functions, app offers games, M- commerce capabilities, geo location searching, blog posts, brand channels, payments and much more(Unknown(4), n.d.).
8 3.3 Social Media Networks
Social Media platforms with its users form a network. These networks can illustrated out of single hubs, that are interlinked to each other and form an interdependence.
Image 1, Social Network(Faas and Cavuldak, 2015)
Networks can have effects. A direct network effect is, if a direct coherence exists between the amount of users of a product and its Value. This effect can be found in communication networks, for example in the telephone network. The Value of this network is extra dependent on the amount of users. The telephone would be useless if no other people would use it. The Value of the telephone network increases with the increasing amount of potential interlocutor that can be reached. SM networks are the same, the only difference is that the SM network is virtual and the telephone network is haptic. Because of the possible effect and power of a network, it is few lucrative to dissipate a present network and replace it with a new one. Even if, new and more efficient technologies are available(Faas and Cavuldak, 2015). A good example therefore is Google+. The platform should combine all sharing services of Google, such as YouTube, Maps etc. and had a competitive advantage with its video call service Hangout. But for users, it was too tedious to run a second Social Network platform beside Facebook. Also, the amount of users on Facebook was crucial(Kühl, 2015).
3.4 The Interaction of Users and Businesses on Social Media
On SM users and business can be found. SM has many advantages for user. Users are connected on SM platforms and interact with each other. This platforms help to reach out to people with shared interest and share their thoughts and interests. In addition, the platforms enable a rapid information exchange between users regardless of the location. Hereby accrues a social connection through communication(Swati, 2016). “These platforms have been crucial in maintaining
9 relations with friends and family when apart. Relationships that otherwise would have weakened or faded away are kept alive through chats and updates”(Swati, 2016).
On the other side of the users are businesses, celebrities, government official and government bodies that can obtain knowledge out of the social networks. For example, how their audience reacts to postings that concerns them out of the enormous data generated on social network(Adedoyin-Olowe et al., n.d.). But also business use SM to communicate with their audience. It existing many techniques of communication and a hole business developed around SM marketing(Hainla, 2017).
3.5 Assessment and Description of Value
Beside the general purpose of a SM network, different features create Value for users or businesses. The general definition of Value is: “Value in business markets is the worth in monetary terms of the technical, economic, service, and social benefits a customer company receives in exchange for the price it pays for a market offering”(Anderson and Narus, 1998). Because the work consider just SM platforms that don't offer a direct chargeable service or product and users can use the platforms for free, consequently the definition has to adjusted to this work. The Value for users is the purpose of the SM platform, the features that support the purpose and the amount of users in the network. The supporting features can functions like sharing to improve the conversation, or building relationships to share common interests. The features can also have a direct commercial aspect. For business and SM platform its self, the amount of users on one platform is crucial and consequently Value. For business SM platforms are attractive because they can reach a higher scope. It also exist features for businesses to communicate with their target audience and to gathering information out of the network(Corcione, 2017). For SM platforms, the implemented Revenue Streams, that are supporting features for users and businesses, get a higher utilization with a bigger network. A Revenue Stream describes the way on how money comes into a business. A business can have several Revenue Streams. If a business is established it has to develop some kind of revenue stream, otherwise the business would make losses until money runs out(Genadinik, 2014).
10 3.6 Honeycomb Framework
To analyze the features that improving the purpose of SM platform, the work will apply the Honeycomb framework. The Honeycomb framework is a tool which analyses SM in seven dimensions: Identity, Conversation, Sharing, Presence, Relationships, Reputation and Groups. Every dimension analyses a specific face of SM user experience and its implications(Taprial and Kanwar, 2012). This tool helps to cluster the features. Some SM platforms have similar features, therefore a feature is just mentioned ones with the associated platform. The assessment will include how a dimension works with its hole aspect. For example not just where Conversation happens, even what improves the Conversation its self. Also, the focus is on new innovating features, because it can be assumed, that like in other industries innovation leads to profits(Engel et al., 2008). In the case of SM, the innovation leads to a higher amount in the network and consequently to profits.
Image 2, Honeycomb Framework(Taprial and Kanwar, 2012)
Identity The identity dimension explains how much a user provide their identity in SM setting. This can be name, age, gender, profession, location, and also information that portrays users in a specific way. The presentation of a user's identity happen through subjective information such as feelings, thoughts, likes and dislikes. Users and SM platforms focusing on different aims and discourse preferences. Many users on SM platforms using their real name, others are using nickname. The identity dimension is core of many SM platforms. This field is attractive for companies, they
11 can present themselves and develop strategies to get in contact with other individuals. But also individuals using the identity dimension to promote them selfs(Taprial and Kanwar, 2012).
Conversations The conversations dimension analyses to which extent users of an SM communicate with each other. A lot of SM platforms are created primarily to facilitate conversations among users and groups. There are many reasons for conversations. Users Tweet, blog, etc. to meet new people, to find true love, to build their self- esteem, or to be on the cutting edge of new ideas or trending topics. Some users see SM as a way to express themselves and making their messages heard and positively impacting humanitarian causes, economic topics, environmental issues or political discourse(Taprial and Kanwar, 2012).
Sharing The sharing dimension focus on the analyses on which extent users receive, distribute and exchange. SM consists out of users who are connected by shared objects. This object can be a text, picture, sound, link, video or location(Taprial and Kanwar, 2012). “Sharing alone is a way of interacting in social media, but whether sharing leads users to want to converse or even build relationships with each other depends on the functional objective of social media platform”(Taprial and Kanwar, 2012).
Presence The dimension explains how users can know if other users are accessible. This dimension includes knowing where others are, in the virtual world and/or in the real world whether they are available. On SM this works with status lines like “available” or “hidden”. Presence connects and bridges the virtual world and real world. Other SM focusing on location presence. Means if people presence around a user, or on specific locations(Taprial and Kanwar, 2012). “The dimension presence is interlinked to other dimensions. These dimensions are conversation and relationships”(Taprial and Kanwar, 2012).
Relationship This dimension represents the extent to which users can be related to each other on SM platform. On SM users can have a kind of association to each other that can lead to sharing, list as a friend, meetup or become a fan(Taprial and Kanwar, 2012).
12 ”Consequently, how users of social media platform are connected often determines the what-and-how of information exchange”(Taprial and Kanwar, 2012). Relations on SM can be different, some are regulated, fairly formal and structured. ”The general rule is that social media communities which don’t Value identity highly, also don’t Value relationships highly”(Taprial and Kanwar, 2012). The mechanism and ways to create relationships on SM varies from platform to platform. Often it depends on the focus of the SM which kind of mechanism it provides(Taprial and Kanwar, 2012).
Reputation The dimension analyses on which extend users can view the standing on others and including themselves. Reputation has different meanings in SM. On a lot of SM platforms, reputation is a matter of trust. Information technologies are not yet good at determining such sophisticated criteria(Taprial and Kanwar, 2012).
Groups This dimension explains on which extend users can build up groups and subgroups. ”The more ‘social’ a network becomes, the bigger the group of friends, followers, and contacts”(Taprial and Kanwar, 2012). Two major types of SM groups exist. The first is user base. Users can select friends/contacts and place their buddies, friends, followers, or fans into different self-created groups. “Second, groups online can be analogous to clubs in the offline world: open to anyone, closed (approval required), or secret(by invitation only)"(Taprial and Kanwar, 2012).
3.7 Pest Analyses
With the PEST analyses the impacting factors will be examined and implemented in the discussion. The results will be the consequence that requested in research question. The tool analyses the business environment in four areas. The word PEST is the abbreviation for the following four areas. Each letter represents an area that shall be analyzed. Political, the current and potential influences from political pressures. Economy, the economical impact on SM. Social, the ways in which changes in society affect SM. Technological, how new and emerging technology affects SM(Miller et al., 2011).
13 4 Empirical Part
4.1 Methodology
4.1.1 Qualitative Content Analysis
For conducting my research I used Qualitative Content Analysis(QCA). The QCA is a method for systematic text analysis. The main idea of the QCA is to formulate a criterion of definition, derived from theoretical background and research question, which determines the aspects of the textual material taken into account. Following this criterion the material is worked through and categories are tentative and step by step deduced. Within a feedback loop those categories are revised, eventually reduced to main categories and checked in respect to their reliability(Schreier, 2012).
4.2 Revenue models of Social Media Revenue Streams can take place on different locations in a platform, that depends on the framework of each individual platform. The research for this work showed that five revenue streams exist. That are based on: Access Models, Data Collection Methods, Advertisement, Virtual Payments and Currencies and Virtual Goods.
4.2.1 Access Models Freemium model Online platforms that are Freemium based, offer at least to user models. One is based on free services or products. This service or product is usually a low end version. Customers are enticed with that. Secondly, the platform offers premium services or products to buy. That can be a premium account with extra functions. The strategy is, if the users likes the service, they will pay for an advanced service(Matanovich, 2016). Freemium models make it easier to draw customers in, because the service is free. That makes it to a potent marketing tool. By using the Freemium model, users are attracted that the providers without wasting resources for marketing campaigns or sales people(Matanovich, 2016). For the Freemium based platforms, it can remain complicated to find the right balance to promote the premium service. It is difficult to convert Freemium user into premium user. Some platforms are using annoying tactics to convert users. This tactics comprise methods like unwanted ads or emails. That can lead to no premium
14 subscriptions, or that many Freemium users drop from the platform. The next example will illustrate how users can feel unfair treated when they using the Freemium model(Matanovich, 2016).
“A reader can view 10 free articles online per month before they have to pay a subscription fee, or else the website simply redirects them. If it’s must-read content, then presumably a reader will be happy to pay extra. Otherwise, it can just seem frustrating”(Matanovich, 2016).
Another way from Freemium based platforms to generate revenue is to offer marketers Advertisement space(Neck et al., 2017).
Subscription Model
The subscription model is a part of the Freemium model and based on the idea to offer a product or service to a customer and receive a periodic subscription revenue. These periods can vary individual, for example monthly to yearly. The model is focusing on customer retention and acquisition(Tarver, 2015). With the periodic sells, it is easier to establish a long time customer relation, because the customer is bound to the product(Lang, 2016). “In essence, subscription business models focus on the way revenue is made so that a single customer pays multiple payments for prolonged access to a good or service”(Tarver, 2015). The Subscription model is reliable, its guarantees itself to sale a product or service a periodic long. This periodic sell is wealthy than just one purchase of a customer(Tarver, 2015). “This makes revenue forecasting and business planning easier, since a company can project its sales farther out with more accuracy”(Tarver, 2015). Subscription models can offer a big supply of features. But some customers are using just a view features of their subscription. It can happen that a customer pays more than he actually used(Unknown(3), 2017).
4.2.2 Data Collection Methods
Data Mining
Data mining is a method that uses applications and algorithms to automatically generate empirical data from coherence of planning objects(Adedoyin-Olowe et al., n.d.). “Data mining techniques are used for information retrieval, statistical modeling
15 and machine learning”(Adedoyin-Olowe et al., n.d.). Social networks are important sources of online interactions and contents sharing, subjectivity, influences, approaches, evaluation, observations, assessments, feelings, opinions and sentiments expressions borne out in text, reviews, blogs, discussions, news, remarks, reactions, or some other documents(Adedoyin-Olowe et al., n.d.). Data mining allows companies to predict the future and upcoming trends out of previous collected data. Additionally, it is used to analyze buying behavior of customers like purchases, geographical location, time etc. Out of this knowledge sellers can tailor their product and services better to the needs of the consumer(Lombardo, 2016). The technology allows to detect and identify errors or losses in running systems. Out of the information manpower can be ensured and products can be offered to the market and losses and lacks can be avoided. “For example, customers who belong in a demographic who buy a certain product at a given day can be analyzed. With the gathered information, the owner will be able to strategize in order to increase sales like ensuring delivery of a certain product on time”(Lombardo, 2016). Opponents of data mining argue that the collection of data and analyzing the buying behavior, is a violating the privacy of the consumer. Further more, the technique is not 100% accurate, criminals could use the data to take advantage of the vulnerability of clueless consumers and use the information for their personal interests. The security of individuals can also be put in line since the person or entity mining the data can be able to identify specific individuals(Lombardo, 2016).
Data Licensing
Data Licensing applies when it comes to exchange of data(Tollen, 2015). “Licensing is defined as the granting of permission for a consumer to re-use a data set under defined conditions”(Koubarakis et al., 2014). The exchanged data consists out of intellectual property(any patent, trademark, service, mark, registered design right, or any license under or in respect of any such right(Groves, 1997)) that creates ownership rights on data. The licensed data can include competitive Values where owners make reasonable efforts to keep is secret(Tollen, 2015). The licensor generates revenue by offering data to recipients. The recipient can use the data to create marketing campaigns, to understand competitors and markets, to identify new products and customer needs, etc. The analyzed data can also be resold to third party(Tollen, 2015). The conditions of Data Licensing are developed under clear legal terms(Tollen, 2015).
16 Cookies Cookies are small data from websites that are saved on the computer of a user. Cookies save information like preferred language and other personal website settings. By visiting a website again, a cookie transmitted saved personal data back. Through this process individual settings can automatically adjusted. Cookies can collect various of information that can identify a user. This information can be name, surname, address, email, phone number etc. A website/cookie can just collect data that a user provides. Websites can't take the email address of a user without allowance, in addition a website has no access to data on the computer(Firefox, 2017).
4.2.3 Advertisement
4.2.3.1 Advertisement Payment Methods It existing different kind of Advertisement Payment Methods on SM for marketers. These methods are helping marketers to budget better, by individual payment techniques. The first method that will be introduced is a common technique and calls Real-time-bidding, also known under the term “Programmatic Advertisement”(Holland, 2014).
Real-time-bidding
Real-time-bidding is describing an automatic auction process in online marketing, where advertisers bid for an advertising space. The auction is in real time and the marketers with the highest bid can advertise the space. Advertisers set their bids up on the Advertisement space and information of the user. Advertisers that are using real-time-bidding consider users individually. A user that provides much information is more attractive for advertisers, because advertisers can target better. Therefore, those users receive higher bids(Holland, 2014).
Pay-per-Click
Another method that is focusing on the action of the user, is Pay-per-Click. The Advertisement technique deducted after a click of an Advertisement medium, like a banner or text Advertisement. The marketer is not paying for the collimation of the Advertisement, but for each click of a user(Mordkovich and Mordkovich, 2005). The benefit of Pay-per-Click Advertisement is, that marketers just pay for an action of a
17 user and not for the displaying of the Advertisement. Affiliate Marketing
A more complex method that includes Pay-per-Click is Affiliate Marketing. It is appointed of third-party websites. These websites offer advertising space for marketers, that want to acquire new customers, or advertise/sell products or services. The provider of the third-party website is called “Publisher” or “Affiliate”. The advertiser whereas called “Merchant” or “Advertiser”. When a user clicks on the Advertisement, a personalized link is linked to the user or a Cookie is set on the computer. With this Cookie/link the Merchant can match the activity of the consumer to the Affiliate. The Affiliate receives a provision when is comes to a success. The success can based on three different models. The first model is Pay-per-click, like mentioned above. The Affiliate receives a provision when a user clicks on the Advertisement. The second is based on the contacting of the user, Cost-per-Lead. A user registered on a website, like enter a email address. The last model explains a sale, when a user bought a service or product. That method Cost-per-sale/Cost-per- order. Affiliates can receive provisions up to 30 days(Hoffmann(3), n.d.).
Postview- Tracking
Another method is Postview- Tracking. This method proves that just views on an Advertisement(not clicks) have also impact of the buying behavior of consumers. The Postview- Tracking allows to set a Cookie, even if a consumer didn't perceive, or clicked on an Advertisement. The Cookie counts the possible eye contacts to the Advertisement of the consumer. When the consumer leafs the page with the Advertisement, the user can be identified up on the integrated Cookie when the user visits the website again. An Affiliate becomes not only a provision for the sell, but also for passive perception of the Advertisement. Consequently, an Affiliate becomes a provision within the duration of the Cookie(Hoffmann, n.d.).
4.2.3.2 Targeting Techniques Targeting methods are techniques that target consumers up on different information. The information are gathered with Cookies and Data Mining techniques. Targeting methods are represented by a broad range where each method has its individual focus. Common SM platforms like Facebook, Twitter and LinkedIn offer different kind of targeting types. The following techniques will be introduced in this section: Interest Targeting, Behavioral/Connection Targeting, Custom/ Audiences Targeting, Lookalike Targeting, Conversation Tracking, Retargeting(Remarketing). To receive
18 information for the different targeting types, Cookies and Data Mining techniques are used. Interest Targeting
Interest Targeting is focusing on self reported activities, skills, interests, follows, likes, friends, products, industries etc. It depends on how much information a user can report on a specific SM platform(Ganguly, 2015).
Behavioral/Connection Targeting
Behavioral Targeting is using data from previous buying behavior, intents and device usage. Instead, connection targeting is focusing on specific connection to pages, apps, groups, events etc.(Omar and Levin, 2015). “Both types of targeting take past behavior into account to help you determine intent”(Ganguly, 2015).
Custom/Tailored Audiences Targeting
Custom/Tailored and Audiences Targeting are the same. Different SM platforms call this targeting type differently. These methods reach their potential customers by uploading a list of email addresses, phone numbers, usernames, user IDs etc. (Ganguly, 2015).
Lookalike Targeting
Lookalike Targeting is focusing on people that are similar to the audience a business care about. The similarities can be in activities, skills, interests, follows, likes, friends, products, industries etc.(Ganguly, 2015).
Conversation targeting
Conversation targeting is about to match a conversation (conversation is the transformation of a user to a customer, or at least to a registered user(Stahlmann(1), n.d.)) to specific Advertisement. This is done by developing the website where the conversation will happen. The development records and tracks purchases and buying behavior of the customers and is matching this information to the belonging Advertisement. With that advancement marketers can measure better the efficiency of an Advertisement(Ganguly, 2015).
Retargeting(Remarketing)
This method tracks a user through different websites and shows Advertisement on a new website that a user is visiting. The content of the Advertisement is about
19 products and services that a user didn't buy at a previous website. This Advertisement method is based on the interest of a user and not of the content of the website(Beck, n.d.).
4.2.3.3 Advertisement Channels Advertisement can be displayed on different channels in SM platforms. The common channels are Banners, Popups and Posts in the timeline/NewsFeed. Snapchat invented a new from called “Discover”. In that section, this four Advertisement Channels will be introduced.
Pop Ups
“Pop-ups are small windows that ‘pop up’ over the top of web pages in your internet browser”(Schofield, 2010). Advertisers are using them to get the attention of user. But also Pop Ups are used to give a user helpful information. Users user don't have to navigate away from the page and can remain(Schofield, 2010).
Banners
A Banner(Display Advertisement) is an Advertisement medium that is integrated in a website. A Banner can also advertised in a Pop Up. It existing numerous forms of sizes and formats. The locations of the Banners on a website are mostly sideways or above. Many Banners include a request to click on a Banner(Call to Action) (Clement, n.d.). The Banner relegates back to the companies website that is running Advertisement. By a click of the Banner the user will lead to the advertisers website(Delp, 2006/ort einfügen). Multimedia Banner with sound, video and interactions that are not covering the content of a website have a high psychological efficacy. Those Banners are addressed individual to the user and the user have access to the full content(Clement, n.d.). On the other side, some Banner types are so big that they overlap the content of a website. A user has extra to close the Banner to have access to the content. This phenomenon also leads to, that users using AdBlocker, otherwise users have to close always the banners manually(Clement, n.d.). “There is also a perception that video advertising impacts on the speed of browsing, which is also particularly frustrating for readers”(Austin and Newman, 2015).
20 Posts Advertisement can also be included in the timeline or NewsFeed of an SM platform(Facebook(1), n.d.). To post Advertisement direct in the Timeline or NewsFeed have the advantage that recognition will be high. On the other hand, user can become annoyed of the Advertisement.
Discover Discover is for news and entertainment outlets that are displayed before the app starts. “Users turn to it to view short-form, video-driven content from brands like ESPN, BuzzFeed, and Cosmopolitan.... Discover has become a way for legacy media brands to reach a younger audience in a totally new way”(Webber and Taylor, n.d.).
4.2.3.4 Advertisement Content A new trend of Advertisement Content is Native Advertisement. Native Advertisement is Advertisement that is adjusted to the website and aims to be recognized as normal content, or like a part of the website and not as editorial content. The adjustments are in design, like fond style, color and shape(Hollstein, 2017).
A part of Native Advertisement is Sponsored Content. Sponsored Content can be an article with a picture, video, images, inclusion of an Instagram post etc. in the Time line or NewsFeed. This Advertisement content has a large variety of different combination of content and aims to fit to the user experience. Sponsored Content doesn't aim to sell a product or service, rather it should be informative, entertaining and useful for the user. This factors should reinforce the consumer relation to a brand and should influence public perceptions in a positive way(Bowden, 2017).
Because Sponsored Content is not a selling activity rather an informative source for the user, user have a higher willingness to view such an Advertisement. It has shown, that it is a good method for brands to target younger consumers(Austin and Newman, 2015).
4.2.4 Virtual Payments and Currencies Online Payment
21 Online Payment is an internet based system that is processing economic transactions(Davidson, n.d.). Mostly these systems are run by third-party corporations like Click2Pay and PayPal(Davidson, n.d.). But also the messenger WeChat offers such a service(Russell, 2016). And WhatsApp, overs with the partner app FreeCharge Online Payments(Kashyap, 2016). The provider of online payments make a profit by taking a percentage of the transacted money. Another common method is to signing contracts with cooperations that need to make a large amount of transactions(Davidson, n.d.). Online Payment systems greatly expand the reach of a business and its ability to make sales(Davidson, n.d.). Business can safe money, because cash supply and deposit reserved. Beside the payment information also marketing information(about discounts) can be communicated. The data of customers allows Data Mining. For users, Online Payments make online transaction fast and convenient independent from the location(Hofer, 2013). The technology is widely spread, but some countries don't allowed, due to national law. But also because of the unwillingness of some vendors and consumers to work with residents of countries where national regulation is lax(Nigeria)(Davidson, n.d.).
Virtual Currency
With Virtual Currencies user can make Online Payments on platforms or beyond. Therefore, Online Payments and Virtual Currencies share advantages like having fast access to the money and making fast transactions(Hoffmann(1), n.d.). A single advantage of some Virtual Currencies is, that the transaction cost are cheaper(Siluk, 2013). Mostly Virtual Currencies are established from website providers. Users of the website can deposit real money and will receive an equivalent Value of Virtual Currency(Hoffmann(1), n.d.). Facebook Credits for example, take just place on the platform. The Credits are used in different social games to by for example Virtual Goods. The benefit is that users can use one currency in multiply games and Facebook apps. Facebook makes money by selling Credits(Hoffmann(5), n.d.)
To exemplify Virtual Currencies with its advantages and disadvantages, the Bitcoin is a good example. The Bitcoin is a cryptocurrency, that is in the online world accepted as means of exchange or currency. Every cryptocurrency's depends on a peer-to- peer network and to an accordingly minutes(Sixt, 2016). In the case of the Bitcoin the decentralized peer-to-peer network is the Blockchain(Carlson-Wee, 2017). The Bitcoin enables users to send virtual money anywhere in the world. The service of Bitcoin is always available. The Bitcoin relies not on a common bank
22 system. That's why the users are in control of the money. The Bitcoin network itself keeps the system save, because it is decentralization(CoinReport.net, n.d.). That also prevents an over-issue(Siluk, 2013). In total just 21 million coins will exist, that will support the long-term Value against traditional currencies. The transaction cost are generally low with a percentage of around 1 percent. That is compared to the other lower, which have transaction cost of 2 – 3 percent. The Bitcoin is increasingly wide accepted as currency. Also, the currency with the Blockchain offers more anonymity and privacy than common transaction methods. The government can not influence the system like freeze or seize Bitcoin units, because it is independent from political agents(Martucci, n.d.).
On the other side, despite high visibility prosecutions of the most egregious offenders, Bitcoin remains attractive to criminals and gray market participants(Martucci, n.d.). The currency is the most liquid and easily exchanged cryptocurrency, it is susceptible to high price volatility. In the Bitcoin systems are no charge backs or refunds manageable. Because the currency does not rely on a legal bases, it can be replaced by superior cryptocurrency(Martucci, n.d.).
4.2.5 Virtual Goods The revenue model that is based on Virtual Goods is aims to sell virtual items and objects in online communities. The utilizing depends on the characteristics of the community. In SM gift symbols(flowers, hearts, etc.) are sent among the users. Online games have more functional goods(arms, tools, etc.) that are needed to challenge tasks in the game. In Virtual Realities the focus is more on decorative goods(clothing, accessories, etc.), with these goods avatars can be designed. Beside Virtual Goods also virtual property and virtual services are offered(Frieling, 2011). Operators like game owners that provide Virtual Goods regulate the ownership of the Virtual Goods with so called EULA's(end user license agreements). In these agreements operates have exclusive control of the Virtual Goods(real estate, armour, creatures, people/avatars, currencies, skills, achievements, accounts) and therein have no legal significance or status. Users can not negotiate the EULAs and have to accept them, when they want to use the service of the provider(Unknown(2), 2016). “This approach is the cleanest from the game operators perspective, as it protects them from exposure to liability arising from disputes involving ownership of virtual goods”(Herzfeld, 2012).
23 4.3 Features of Social Media
4.3.1 Identity Facebook offers many possibilities to display identity. Users can create their own profile, which includes space for general information about the person and preferences like movies, music, books, etc. The profiles give also the option to display information such as relationship status, political view, religious view, age, location etc. In addition a profile on Facebook enables users to upload photos/videos and create albums, that can viewed from other users. A user can choose to leave his profile public or make it to a private one. A private profile can just viewed from friends of a user. The NewsFeed provides users the space to post statuses about their thoughts and believes. For these posts different media types can be used for better expression(Nelson, 2012). In the Sharing section it will go in more detailed.
LinkedIn offer similar application as Facebook. People can ad CV's in different languages to their profile. Also, references can be added. Other web profiles can be integrated in the LinkedIn profile. The features of LinkedIn are also count to the Reputation dimension. Beside normal user profiles, it can also be company profiles established. Because of the detailed profile information, the search function can work very accurate on LinkedIn(Benske, n.d.).
On the other side of this very detailed profiles with many applications for expression, are low level profiles. This profile can be found on Instagram. Users can create a bio(with max 150 letters) and can express themselves more with photos and video posts(Instagram, n.d.).
4.3.2 Conversation The conversations form vary under the different kind of SM types. At Twitter a Microblogging service, people make so called “Tweets”. That are texts that can be max 140 letters long. Users can add photos, videos and links. Tweets are posted in the timeline where followers can read and see the Tweets(Twitter, n.d.). Users can ad hashtags(#) to Tweets. That should explain more about the content of a Tweet. With hashtags user can fast and pointedly find information, as well as actual trends and topics can be followed(Abelt(2), n.d.). It is also possible to Tweet via sms(Twitter, n.d.). User can Retweet, Retweeting works by taking a Tweet from
24 another user and add it to the own timeline. Users do this for example to inform their friends about special events or happenings(Abelt(1), n.d.). On Facebook users have more freedom for conversation. Users can view each others photos and comment on them(depending on the privacy settings). Also, they can send comments, messages and instant messages to each other(Nelson, 2012). Facebook offers an extra messenger for its users(Unknown(6), n.d.). In common messengers like WhatsApp, the conversation happens in chats, calls and video conversations. The conversation in chats can include text, voice, video, pictures, emoticons and files. The messenger improved conversations in big groups. Users are now able to quote a particular message and reply accordingly(Chronicle, 2016). The messenger WeChat extend conversations with video. The service is called “Sight” where users can add 6 sec. videos to the conversation(WeChat, 2015). Also, users can create they own animated emojis. The app is called MojiMe, it lets users put their faces into hand-crafted WeChat stickers. It is possible to make a single moji, that is a character featuring the face of a user. But also a buddy moji of two users is possible. The mojis can be used with any friend on WeChat(Millward, 2014). Another feature of WeChat is Drift Bottle. Users can send messages in a virtual sea and random users pick them up. They can keep it or add text or audio to the message and tossing it back to the virtual sea(Voo, n.d.). The messengers like WhatsApp and Telegram offers an end-to-end encryption between users. Just the sender and the recipient can read the message. Another feature of Telegram is the self-destruction mode. If a recipient has read the message, it will automatically destroyed from both mobile devices, sender and recipient. Users can set countdown for the self-destruction. The countdown starts, when the recipient has read the message(Telegram, n.d.). Telegram also offers a double confirmation for the normal chat. Means beside the common on off sms code confirmation, users can add a password that is requested when entering the chat(Telegram, n.d.). At Telegram users also have the opportunity to add self programmed bots(Telegram, n.d.). Bot is the abbreviation for robot. In the information technology a bot is a program that widely runs on his own, after ones initiated. A bot works extensive self-sufficient. The term bot is neutral, it doesn't say anything about the programming(Mumme, n.d.). In the case of Telegram a bot could interact in a chat (Telegram, n.d.). Platforms like WeChat and Instagram offer business accounts, that improve the communication/conversation between business and customer. WeChat developed application programming interface(api) and services to encourage all types of businesses to use the WeChat public accounts system to
25 develop custom features for their account. It exists two types of public accounts on WeChat, personal and business. The personal account is for normal people that just want to use WeChat on its basic functions. Under the business account two different accounts are available. Ones a subscription account, where owners can send broadcast message per day to the subscribers. The account can reply to any user message within 48 hours. Push notification are not included. This account type is for users who want to push more frequent content. In addition, this account can just be used for individuals. Secondly, the service account is the best for businesses and organizations who want access to advanced WeChat public platforms features. This account includes: four broadcast messages per month, displayed inline with personal contacts, user receives push notification, the account can reply to any user messages within 48 hours, custom menus supported for all service accounts and Payments API supported for all verified service accounts(Maruma, 2014). Instagram business is offers a similar service for businesses. The account has access to contact data, analytics and can display Advertisement(Leto, 2016). Also, Instagram is testing a new shopping experience(Instagram Business Team, 2016). “Each post will have a tap to view icon at the bottom left of a photo. When tapped, a tag will appear on various products in the post—showcasing up to five products and their prices. Once a tag is selected a new detailed view of the product will open. This functionality will bring important product information to the consumer earlier in the journey, all without having to leave the Instagram app to search”(Instagram Business Team, 2016).
4.3.3 Sharing At Facebook users can share content on different location in the platform. These locations are: user timelines, groups, events, own pages and in separate messages(Facebook(5), n.d.). Content forms that users can share are videos, links, photos, multimedia(combination of photos and videos) and Open Graph Stories(Facebook(4), n.d.). Open Graph Stories have four basic elements:
Actor- the person who posts the story, App- every story includes attribution to the app that created it, Action- activity the actor performs and Objects-the thing the actor interacts(Facebook(2), n.d.).
26 Image 3,Open Graph Story(Facebook(2), n.d.)
Beside sharing created content, users can also share content from other websites. Users can integrate customized Facebook buttons on websites and apps. These buttons are so called sharing interfaces and following the publishing behavior of the shared dialog(Facebook(4), n.d.).
Image 4, Customized Buttons(Facebook(4), n.d.)
User can also add “app links”. That are links in shared content that revers back to the origin of the link, a website or app. The link can even link to a specific context within an app. In external apps Facebook offers quote sharing. Quote sharing enable users to quote in two ways, user defined or publisher defined(Facebook(4), n.d.). “User defined quote sharing enables users to highlight text and share it”(Facebook(4), n.d.). Publisher defined quote sharing enables owners of an app to preselect text for sharing and place a share button next to it. Like at Twitter user can associate a hashtag with a shared link, photo, or video(Facebook(4), n.d.). On Snapchat Users can create photos and short videos(snaps) and send them to their friends. Users can create their own snaps with different features. With the scissors tool users can cut peaces out of a snap and ad it some where else. The
27 sticker tool enables to ads stickers and bitmojis. It is also possible to ad text to the snap this can be done by typing text. Also, user can just draw by touching the screen with the finger. In the end, users can decide how long friends can see the snap on the platform(Snapchat(1), n.d.). Another feature is Snapchat Lens, that is based on augmented reality. Users can add real time effects and sounds. The app identifies the face of the user and adds a mask. Users can decide between different masks. Each mask ask for an action of the user, like move your eyebrows up. The mask reacts to the action. By switching to the back camera of the phone, users see the world with a different lens(Snapchat(2), n.d.). User can also create their own filter and let their friends know where they are. This filters so called Geofilter. Snapchat offers free Geofilter that can be activated in the app. Also, Individual/community Geofilter and on demand charged Geofilters. Individual/community geofilter are not allowed to contain brand names. Instead, on demand Geofilter can be used for Advertisement purposes, like from companies, but those kinds have first to be approved from Snapchat(Baykara, 2016). On Demand Geofilter are also a way for companies to get in touch with the consumers and consequently belongs to the Conversations section. To improve the sharing experience for the user, Snapchat introduced Spectacles classes. The Spectacles let a user capture the moment from a user perspective. The Spectacles are basically sun classes with record function. They have to paired ones with Snapchat on the mobile device and then snaps are automatically imported(Snapchat(3), n.d.). All snaps can be posted in a story, where friends can see snaps up to 24 hours(Snapchat(4), n.d.).
4.3.4 Presence On the messenger WhatsApp, user get displayed when a specific person was on(last seen). If a person reads a message, then blue ticks appear behind the text, a form of read receipts. Both functions can be put off for privacy reasons(Chronicle, 2016). Facebook offers a chat sidebar where contacts appear. The contacts are friends, or people, a user has sent a message request, or has messaged and contacts uploaded from mobile devices. If users with a green point/light next to their names are on chat. Users with a red point/light next to their names are nearby. Users with a phone next to their names are on the Facebook or messenger app on their mobile phones. Users with no icon next to their names are not currently active, but messages you send them will still go directly to their message inbox. Users can turn their chat of, then the user appears inactive on the chat(Facebook(3), n.d.).
28 Facebook offers live-streaming video capabilities to users. To display what kind of people are live on Facebook, the provider uses a map. The map illustrates the hole world, with the locations where people are currently online(Baral, 2016). “A quick glance shows activity clusters”. “Users move their cursor to change the position of their map and utilize the zoom function on the upper left side to zoom in or out.”(Baral, 2016). By hovering the cursor over a location, a window will pop up with the users name, photo the number of viewers, how long they have been live- streaming and a description of the user(Baral, 2016).
Image 5, Facebook Live Map(Baral,2016)
4.3.5 Relationship At the SM platform LinkedIn, users acting in a network. The network has different degrees. The degrees differ from first degree contacts, to third degree contacts. First degree contacts are direct contacts, users have agreed to a request. Second degree contacts are user that are connected to another user with a first degree contact. Users can send a request to each other, or send an inmail. Third degree connections are users that are connected over a second degree user. It depends on the privacy settings on the third degree contact, if a user can send a request or, just get in contact by sending an inmail(Weiner(3), 2015). A completely different relationship system offers Musical.ly. When users record the same song on the app, they get automatically combined(Carson, 2016). “its done the same thing with a new Q&A feature where someone can ask a question of a Muser via video, and that person can respond in their own video. Musical.ly combines the two”(Carson, 2016). Also, WeChat is going new ways with the features Look Around and Shake. Look
29 Around let users connect with random people that are physically around them. User can see the name, custom status, their profile picture and their distance from each other. They can select genders and can start a conversation(Voo, n.d.). The feature Look Around belongs also to the Presence section, because it consider people that are currently present around a user. With the app Shake people can also meet randomly. Users will be connected, if they shake their mobile device. Users can start a conversation, or can shake again to get another random user(Voo, n.d.). Snapchat invented a method to get more information out of a relationship between users. Friend emojis change depending on the interaction of users. It existing eleven emojis with a different meaning. For example a golden hard explains, that two users are best friends, the users send each other the most snaps. Or a baby emojis explains, that users just added each other(Snapchat(5), n.d.).
4.3.6 Reputation The hole SM platform Reddit is based on a voting system, consequently on Reputation. Users vote content with likes and dislikes. Accordingly, the content becomes popular or less popular on the platform(reddit(3), n.d.). Also, views are expressive, like the platform YouTube is using it beside other forms(Kietzmann et al., n.d.). On Facebook since last year, users can create a more detailed Reputation of other users and accounts. Beside the normal “like” button also reactions are available. It existing five different reactions. That are: love, haha, wow, sad and angry. Posts will now show the mix of reactions they have received(Newton, 2016). Also, through the very detailed information like job, civil status, etc. of the user profiles(Identity) from Facebook, Reputation can be derived. Also, on Facebook users can reply to comments, which can also improve the Reputation within a conversation Facebook(6), n.d.). At Instagram users can like comments, or switch comments off for individual posts(Woollasten, 2017). Twitter and similar SM platforms working with followings, that are also meaningful in the case of Reputation(Kietzmann et al., n.d.). LinkedIn whereas offers that users can write a recommendation for a other user(Weiner(4), 2017).
4.3.7 Groups In many SM types users are able to form groups. In messengers for example like WhatsApp, people can form simple group for exchange of text, voice, video, pictures and files(WhatsApp(1), n.d.). “Every group has one or more admins.... Only admins can add or remove participants”(WhatsApp(1), n.d.). Just admins can make other participants admins. If an admins leafs the group, a new admin will be randomly
30 assigned(WhatsApp(1), n.d.). Another form of groups offers LinkedIn. Owners of those groups have more functions, sending announcements to group members, closing a group, adding or editing a logo for the group, using LinkedIn log, approving and pre-approving group members, editing group information and group settings, merging groups, deleting group conversation and comments(Weiner(1), 2017). LinkedIn doesn't allow excess of identity of a group. Because it could impair the trust of users to the group and LinkedIn(Weiner(2), 2017). At Reddit users can establish groups, they are called subreddits. A subreddits are like niche forums(Aaron, 2014). They include specific rules, that can be individual designed from the Admins(reddit(1), 2017). “Each rule must have a name, and optionally a markdown-supported description....Each rule is designated as applying to posts & comments (the default), posts only, or comments only....This determines how the rule will be used in reporting and possibly other places in the future”(reddit(2), 2016). Admins can edit and delete rules at any time(reddit(2), 2016). “A community can define up to 10 rules. Subreddit rules populate the report menu”(reddit(1), 2017). Each subreddit have and voting systems for links, self posts, and comments that depend on the subreddit theme(Aaron, 2014). Every subreddit has a focus and for the most part, effectively maintains that focus(Aaron, 2014).
4.4 PEST Analyses
4.4.1 Political
European Commission The European Commission is an institution of the European Union. At this institution representative of the citizen of the European Union and economy meet to develop new law(European Commission(2), n.d.). In Europe the EU is to tighten the law about the internet. The European Commission introduced on the 01.10.2017 the ePrivacy Regulation. The ePrivacy regulation is regulating the electronic communication in the European Union. Beside the classical phone call, now short massage services and video calls in the internet are included. The general Data protection regulation covers a high data protection level.(European Commission(1), 2017). The ePrivacy regulation involves so called Over-the-top-provider. Over-the-top providers are owners of internet applications where users can sent content like
31 videos, Voice-Over-IP, Instant-Messaging etc.(Toy, 2015). Every provider of electronic communication is falling in this definition of the European Commission(European Commission(1), 2017). The ePrivacy regulation provides that just meta and location data are allowed to use for specific purpose. For example, for accounts and warranty of the service. For other purposes the permission of the user is needed(European Commission(1), 2017). The regulations covers also new regulations for Cookies. Providers of electronic services shall have the right to use the data of their users for commercial business purposes, as long the user not explicit prohibit it. But providers are just allowed to make collection of the surf behavior and app usage data(Cookies), if a user explicit agree to that. Just the entrance on a website does not longer counts as a conformation for data collection. If a user goes to a website, a banner or advice window has to appear with a notification that this website is using Cookies. The banner or advice window has to have the size that it can't be overlooked. Just a ok- button for confirmation on the banner or advice window is not allowed, because the user doesn't have a real choice of approval. In addition it is not allowed to make a notification, that the user has the possibility for specific Cookie settings in the browser. The user has to have the choice to either really agree or disagree that a Cookie is placed on the PC. The choice has to be done by Opt-in query. Opt-in query is done by check boxes(agree, disagree), the check boxes don't have a cross in it already. The user has to make the cross actively in the check box of his choice. If the cross is made, the user have to click on “confirm”. If a user left the banner or advice window uncared, the provider is not allowed to place Cookies which need a active confirmation of the user. If a user is disagreeing to that a Cookie is placed on the computer, the website can't be looked. Following the General Data Protection Regulation, a user shall be allowed to refuse Cookies without getting drawbacks. Moreover, a website provider has to offer the users that did a confirmation to every time a recall, opt-out. Also, website providers have to check, if users made the “Do Not Track” option in their browser. This option explains that the user doesn't agree to Cookies in general. The European Commission wants that in the future users regulate all Cookies in their browser private settings and not individual for each internet site. If a Cookie does not endanger the privacy of users following the assessment of the European Commission, an allowance is not needed. That could be a Cookie that helps to create the E-commerce shopping basket(European Commission(1), 2017).
32 The European Commission wants to protect the consumer more, when it comes to unsolicited Advertisement. Internet consumers have to agree to automated calls, sms and emails. Following the ePrivacy regulations Adblockers(AdBlocker are open source Advertisement filter and pop up blocker, that can be installed in common browsers(Faida et al., n.d.)) are allowed and provides are permitted to check if consumers using Adblockers on their browser. In addition, providers have the allowance to restrict content, or even hinder the entrance to their website, if a consumer is using an Adblocker(European Commission(1), 2017).
4.4.2 Economical Economically SM is in the spot light, because it becomes an important part of digital communication strategies for businesses. SM delivers measurable results is sales, leads and branding(Hainla, 2017). “It also enables to reach a large number of people at a low cost”(Hainla, 2017). An indicator therefore are the overall Advertisement revenue. In the USA it increased from 2015 to 2016 by 19%. The total amount in 2016 was $32.7 billion(Sruoginis, 2016). In comparison, in Germany the expected net volume in Advertisement was about $1,99 billion. That is an increase of 6,3%(Mudter and von Wersch, 2016).
4.4.3 Society The usage of SM has an increasing trend(Chaffey(1), 2017). In USA 67% of time spent online is on a mobile device, with an increasing trend. In the first half of 2016, 47% of the online Advertisement in USA on mobile devices. The number of users in the USA going online via computer is steady, but time spent is declining as shift to mobile continues(Sruoginis, 2016). Beside this also more users start to use AdBlockers. In the UK 39% and in the USA 47% have installed an Adblocker on their computer, mobile, or tablet. Because consumers are annoyed of Advertisement and the interruption in the reading experience(Austin and Newman, 2015). The same trend regarding annoying Advertisement can be seen in Banners. In USA(29%) and UK(31%) around three in ten online users actively avoid sites where is traditional banner advertising, because it is distracting(Austin and Newman, 2015).
Another important topic for the society is data protection. “The survey of 3,000 Internet users was fielded by independent research company OnePoll and spanned audiences of 1,000 each in the United States, United Kingdom, and
33 Germany”(Laguna, 2016). 53% of the people stated that they would immediately stop working with SM if there was news of a privacy scandal with that company. 57% stated that SM should not be allowed to share data. The statements have an increasing trend. In all three countries the people care more about keeping their data private(Laguna, 2016). “But are less confident in their ability to do so and are taking fewer actions to protect their privacy”(Laguna, 2016). A topic that a part of data protection is government surveillance. 68% of the interviewed people stated that they are against “back doors”(unlock encrypted devices) for the government. They think, criminals could also use the back door in encrypted connections to steal personal data. 69% of people stated that government officials also would have easier access encrypted data(Laguna, 2016). The half of the interviewed people stated that there is no need of back doors. A good example on how important data protection for users is, is WhatsApp. WhatsApp is the biggest provider of instant messages. In the past many users changed from WhatsApp to other messengers, because of a lack of data protection(Brands, n.d.). Since that point, the messenger provides an end to end encryption communication and become one of the safest messengers(Floemer, 2017).
4.4.4 Technology The new haptic technology from Immerson Corp. improves the experience of mobile Advertisement. The new technology is approved in many industry sectors(automotive, hospitality and food and beverage). “The study of Immersion’s haptic technology, which enables users to feel touch effects on digital devices, found that adding touch to ads increases engagement and users sense of connection with a brand”(Quach, 2017). The technology elicits a strong emotional response, especially increasing levels of happiness and excitement(Quach, 2017). “Compared to standard video ads, haptic video ads show a 62% increase in feelings of connection to the brands....More users felt excited after viewing ads with haptics – 38% compared to 30%..... More users felt happy after viewing ads with haptics – 44% compared to 37%”(Immersion Corporation, 2017). Another strong technology is Virtual Reality. Virtual Reality will change the way of content consumption. The company Oculus, owned by Facebook is working on Virtual Reality. Today it is easier to produce videos, there are more available and in a higher demand.(DeMers, 2016).
34 4.5 Discussion 0f Revenue Streams
Freemium The Freemium model is for users very attractive, because they can use a free service. On the other side it can be annoying when it comes to restricted content, Advertisement or to aggressive question methods. From the business point of view, the Freemium model is a strong marketing tool, but it remains difficult to convert a user in to a subscriber. One can assume that the Freemium model is good for young business and platform to develop a customer relation and to get the attention of the market.
Subscription For SM the Subscription model is predictable revenue stream, because of the periodic income and that makes it reliable. SM platforms have to offer good content that people will subscribe. Unfortunately customers waste some times money for their subscription. But on the other side they can use a service and pay periodically, what is convenient.
Data Collection Data collection tools are very useful for businesses(Data Mining, Data Licencing, Cookies). Data can be used for different targeting methods in Advertisement. Analyzed data enable advertisers to create personalized content, that is more efficient. Also, It gives more control over the operating area, in the case of SM over the platform. Unfortunately the law about data especially in Europe becomes more strict. Over- the-top-provider like Facebook will be included in the new regulations. In the future the usage of cookies will face stricter policies. That will have possible negative impact on data collection and therewith marketers have to find new ways to gather data. In addition, the awareness of users about their personal data is increasing, consequently the society claims more protection. Cases like WhatsApp and surveys illustrate how important data protection for the society is. The mentioned factors will possibly decrease the amount of data available. Thus, the over all processing of data becomes more difficult and will negatively affect advertisers. The question is, if methods like Postview- Tracking, or different targeting methods can still be used and how strong the impact on the new laws in Europe will affect SM.
35 Advertisement For businesses Advertisement offers a lot of options and is very attractive. An indicator therefore, are the increasing revenue amounts of SM Advertisement. For marketers different Payment Methods on common SM platforms give them more control of their budget. Especially Affiliate Marketing have one extra benefit, it amplified scope. Targeting Techniques are very efficient and offer many opportunities. Marketers have many possibilities to display Advertisement, but users are annoyed of many channels. New forms like Discover provide better communication to the consumer. In addition, Sponsored Content with its adjustments to the website offers a new approach of successful communication. Also, the new technology TouchSense Advertisement shows much potential. Because of the increasing trend of mobile usage, advertisers have to adjust they Advertisement design, to reach a maximum user experience. On the other side, is the annoyed platform user. User extra avoid SM platforms where Banners are displayed and the usage of Adblocker is on a high amount. The government is also protecting the consumer for data exploitation and give more rights by the usage of Adblocker.
Online Payments Online payments improving the way on how business can be done in the internet, because the transaction are fast and direct. For businesses the technology is a good way to expand the business. For users of SM platforms Online Payments are pretty attractive because of its convenience. Users can transactions without leaving the platform.
Virtual Currency Virtual Currency is a smart revenue stream, because people exchange physical money into virtual money, that is developed from the provider. Consequently, the provider creates Value out of code. But also an environment must be provided, where the currency can be used. The system behind the Virtual Currency can deliver many benefits: In the case of the Blockchain, benefits like safety and transparency. On the other side any other Virtual Currency could replace it, because it has no legal framework. Also, the environment can protect for specific disadvantages. The Facebook Credits will not be affected of a replacement, because it can just be used on the Facebook platform. On the other side, users can not benefit from all possible advantages of Virtual Currency, because the usage is restricted to the platform.
36 Virtual Goods For Providers Virtual Goods have a brought range of applications. That indicates in how many ways they can be implemented. Like Virtual Currencies, Virtual Goods are a smart revenue stream, because users convert real money in to Virtual Goods. But providers also have to offer an environment where users can use the Virtual Goods. An additional advantage is, that providers have all the rights of the goods, what is worse for the users. But it seems to be, that users take the circumstances because of the advantages of Virtual Goods.
4.6 Discussion of the Features of Social Media The possibilities for a user to express their Identity is very large on SM. Indeed, it depends on the SM type/purpose. But platforms like LinkedIn enable extra the integration of other web profiles. Conversations happen in different forms on SM and each form has its own benefit for the user. The platform Twitter has just one channel for Conversation and Tweets have a restricted letter amount. In the case of Twitter(Micro Blogging) it makes sense to restrict the Tweets because a Tweet is for a broad audience and otherwise the platform would loss clarity. Whereas, Facebook offers a lot of different channels for Communication. Completely different, WeChat provides with the feature Drift Bottle, the opportunity to meet random people, and the hole platform for Conversation(similar to Twitter), but messages will just receive one user.
On Messengers the Conversation is restricted to friends, but extra features improve the conversations, like users can quote a particular message in a group chat and reply accordingly. WeChat even offers more interaction with its mojis. A new way of Conversation are chat Bots. Because of the awareness of personal data more Messengers offer extra security.
In addition, Messengers and Social Sharing platforms offer extra business accounts for companies that they can interact with their audience in different ways and provide detailed information about products and services.
Sharing is a major feature on SM. Platforms like Facebook offers many sharing possibilities. Users can share activities and content from other apps. Extra features like share buttons make it easier to share content. All features make Facebook to a well interlinked platform. Other platforms like Snapchat, offer users more to create content that should be shared. Users have many options to establish unique content with technologies like augmented reality and locations. Unlike other social networks,
37 which keep the content online forever unless users decide to delete it, it can be assumed, that Snapchat's disappearing content makes online interaction feel more human and a little more grounded in the present moment. Also, extra devices are invented to improve the sharing experience.
To see if users are present online on SM platform, are similar under Messengers. Messengers have different information signs that let other users know about the presence. But the Presence can also be based on the location of the user like the feature Look Around from WeChat, what provides a new user experience.
The types of forming a Relationship differ on platforms. It existing formal structures like on LinkedIn. But also people are directly put together, because of their common interest. On other platforms, users get randomly connected to each other. The platform Snapchat even evaluates the standing of relationships.
On SM platforms Reputation can be find in different forms like content voting systems, likes, dislikes, comments, followers, reactions, views, documents, recommendations and even profiles of third party websites. Also, platforms are interlinked, that users can gather more information about each other.
Groups on SM vary. On messengers the settings are more restricted. But people can also have a lot of freedom like on reddit and LinkedIn. Especially reddit is very innovative with its individual group rules.
4.7 Value for Users and Businesses
SM features create Value in many ways for users. SM platforms are mostly open for every one. Platforms allow user to interact beyond the platform for financial purposes. Platform own currency improving the interaction on the platform and offer more possible benefits for users. It remains to be seen how SM platforms will develop further in this case. Platforms on Virtual Goods improving the interaction and grandstanding on the platform. Users can express their selves very detailed. The platforms offer many media types for communication and provide a lot of tools and features to create own content. Virtual Reality will be the next step in this case, where users can in collude. With Facebook's vested inters in Virtual Reality, it can be assumed that a lot of Virtual Reality optimized content will accuse in the future on SM. To improve the sharing experience SM platforms collaborate together and develop own devices. On SM there are many forms to create relationship for users to interact in networks. In addition, innovative methods display the degree of a
38 relation. With these methods users get more feedback of the state of relation in the virtual space, what can be seen as a step in Virtual Reality. Reputation is displayed in many forms, here also platforms collaborate to improve the purpose for the customer. Offered groups of SM provide space for interaction for specific topics and purposes. SM provides a lot of freedom for users to be creative and designing the platform environment.
SM features are very advanced for businesses and create thus a lot Value. Platforms enable business to gather information from the networks. Many ways for businesses are provided to target their audience. Also, platforms provide individual payments for business success, instead paying for unpredictable actions. Platforms offer business to communicate with users at the same eye level and extra space for communication is established. Like users, business can also create content in many ways for interaction with their audience. Even, innovative selling opportunities are emerging.
5 Conclusion
Personal Critics
To summarize everything, I am satisfied with the work. I started in time and the work is a good source of information. Unfortunately, I had to change the research questions many times, because it was my first time of using one. Also, games are more emerging on SM and I didn't consider them. Readers will need previous knowledge to understand this work better. A more detailed explanation of the frameworks of the examined SM platforms would be helpful. Also, the connections between the dimensions of the Honeycomb framework could be more highlighted.
Critical Reflection of Results
The results for the user where expected, because SM with its features are omnipresent. Instead, the results of the business side are very detailed and interesting. Also, the impact of the western society and government of SM Revenue streams is incredible. All in all the work helped to understand SM in its hole extend.
Implications
39 People who want to know more about SM can use this work as an introduction of this field. Marketers can gather information about Advertisement methods with the possible future changes. It also can be used to develop new features, or a new SM platform up on the provided knowledge.
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7 Table of Images
Image 6, Social Network...... 9
Image 7, Honeycomb Framework...... 11
Image 8,Open Graph Story...... 27
Image 9, Customized Buttons...... 27
Image 10, Facebook Live Map...... 29
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