FACEBOOK MESSENGER KIDS Social media for under 13-year-old kids with raising dilemma

Prepared by: CHEN MA 809091 HAN UNG 885781 JIAJIA FU 955428 ROSENDO TREVIÑO 865216 Messenger Kids Case Study !1 Abstract This case study will investigate Messenger Kids, a new service Facebook offers to children. This disruptive technology platform raises concerns and creates dilemmas for users attributed mainly to a high level of uncertainty. The purpose of this article is to evaluate Facebook’s Messenger Kids from the parents’ perspective on the dilemmas that new technology and privacy concerns create. The service is analysed in different aspects including the perceived risks, cost- benefit comparison and service quality gaps. The customer lifetime value metric is also utilised to explain how Facebook can make profit with a free app without ads. This paper then provides recommendations to the company to enhance the user experience and increase the service perception.

Keywords: service management, service quality, technology services, social media

Messenger Kids Case Study !2 Case story MESSENGER KIDS Facebook’s new app with raising dilemmas

Jane Johnson stood in the kitchen looking outside the window and reflected on how technology and the Internet are changing human relationships. The effects on information transferability, virtual connectivity and digital privacy are both positively and negatively far-reaching, which made Jane deliberate how to best prepare Jess, her seven-year-old daughter for these changes.

Messenger Kids by Facebook

It is not exaggerated to say that social media is embedded in our lives. People tweet their thoughts, post their photos, share their day to day stories and even apply for jobs through social media apps. However, at what age is it appropriate to join social media? US Federal law prohibits children under the age of 13 to sign up to any form of social media[1], however research shows that 93% of six to twelve-year-old in the

U.S. have access to tablets or smartphones and 66% of them have their own devices. A recent survey indicates that 60% of children use messaging apps, social media or both. Previous mentioned research shows that kids had the right hardware but the wrong software.[2] Messenger Kids is notably Facebook's solution to the problems of modern parents, but the question now is if children under thirteen years old should be on social media?

Facebook’s new service targeting children between six and twelve years old launched in December 2017 exclusively to the American market, but it is expected to expand to different countries in the near future. It is a free app with no advertisements or in-app purchase. This video calling and messaging app allows kid users to

Messenger Kids Case Study !3 connect with parent-approved contacts, which creates a more controlled environment.[3] The kid-friendly environment not only complies with the Children’s

Online Privacy Protection Act (COPPA) but also offers lots of fun with interactive masks, reactions and sound effects.

The Johnson’s

Facebook Messenger Kids, hence, could be an ideal solution for kid's digital literacy in this hyper-connected world.[4] People live in a fast-dynamic world, and the

Johnson's has family members living all over the world. Both parents work and sometimes need to travel or spend long hours at the office. Messenger Kids is a service that facilitates long-distance relatives, friends and parents to have a conversation with the children… but at what cost? There are concerns with privacy, screen addiction, social skills development, psychological health, among many others. Some critics also question the intention of Facebook, claiming that this free service is used to lure children into harmful social media. They believe that the company tries to seize the opportunity for expansion, even though it is at the expense of kids’ well-being[5]. The Johnson’s as many families in the US have been raised the dilemma as to what is the cost they need to sacrifice for their kid to use this service?

One day Jess asked Jane if she could get an app called “Messenger Kids” on her iPad. “All my classmates are using it.” “Really?” “Well, I mean, most of them.

They use it to do group assignments, and chat with friends after class. And you know

Kelly, right? My best friend. She uses the app to keep in touch with her grandparents.” “Well, what did your dad say?” “He said no… but, please, it’s really a great app. Please, mom!” “Let me think about it, okay?”

Messenger Kids Case Study !4 Jane gave it a thought and decided to call Kelly’s mom, Laura, for a discussion. “Yes! That app is amazing!” Laura said, “We came to New York when

Kelly was four. Her grandparents still live in San Diego. At the beginning, we talked to them on the phone and everything was fine. But it only took a few months, I think, for

Kelly to become estranged from grandparents and show very little interests in talking to them.” “And the app helps?” “Exactly. I didn’t expect too much from it. But it turns out to be a great help. The app comes with lots of mask, frames and GIFs. Kelly always plays with these features when chatting with her grandparents and they all have so much fun.”

Connectivity Benefits vs Privacy Concerns

The app would allow Jess to connect with her grandparents on the other side of the country, as well as to keep in touch with Jane more often. Jane, 34 years old, is an advertising practitioner in New York. She is often working overtime or on business trips. Her clients want her to be on call 24 hours a day, 7 days a week. Consequently, she could hardly spend any quality time with her daughter, not to mention she often misses out on Jess's daily life. Just like many others of her generation, Jane and her husband have been Facebook’s users and in a love-hate relationship with Facebook for years. Their problematic experience with the social media platform made them wonder if they want to put their daughter in the same position.

Jane mentioned this to her husband at night. “This app can help me communicate with Jess when I am not at home.” “I don’t think that’s a good idea,” said her husband, “why do you think they offer this kind of free service to us, to our kids? They are just trying to lock them in with the chat app and lure them into

Facebook when they turn 13. You know Facebook’s data privacy scandal. How can

Messenger Kids Case Study !5 we trust a company like that?” Jane nodded, “true, but probably that’s why we should get Jess prepared for it. You know, help her build digital literacy skills, teach her how to protect her privacy, when everything is still under our control.” “That’s a good point, but, we always pay a price for service, even if it’s a free app. It might be

Jess’s personal information, or our family’s. And what if something goes wrong…

Just, let us really think about it thoroughly, okay?”

Following the trend

In the last couple days, Jane found Jess become quiet at home. After a long talk, she

finally figured out that her little girl was being left out by schoolmates. Jess could not join their conversations because they used Messenger Kids that she did not have.

Jane and her husband felt sorry for Jess. Even though they were kind of blaming the app for what their daughter went through, they decided to install it for Jess. However, it did not take too long for them to notice and started to worry that Jess got increasingly addicted to her iPad. She checked the app constantly, waiting for her friends’ replies. Jane sadly found she got even less time with daughter now, because of the app.

Cyberbullying

What deepens Jane’s concern is that her colleague Richard has a son being cyber- bullied. Richard is a single dad of a ten-year-old kid named Ryan. Since he had to work all day long, he allowed Ryan to use social media to stay connected when he was at work. However, his son was having a hard time since some of his personal photos got spread through social media. When Richard became aware of that, Ryan had already become a victim of cyberbullying. He was constantly mocked by

Messenger Kids Case Study !6 classmates through group chats and was suffering depression that was life- threatening.

Jane told him that her daughter was using Messenger Kids. Richard was surprised and showed great concerns, especially after he realised that even though

Jane could control the contact list, she did not get direct access to the information that Jess shared with other people.

At the beginning, Jane was sold because she wanted to use the app to communicate with her daughter. Also, the app made lots of promises on empowering parents with total control of their kids’ social media behaviour. However, Jess started to refuse sharing her chatting contents with parents. At this point Jane had to admit that she had underestimated the issues that this app could cause. She wondered if she should delete it from Jess’ iPad or not. On the one hand she does not want her kid to be left out of school but on the other hand, she does not want Jess to face the potential drawbacks that social media could cause. Jane has to make a decision fast, but what should she do?

References

[1] Federal Trade Commission. (2018). Children's Online Privacy Protection Rule ("COPPA"). Retrieved from https://www.ftc.gov/enforcement/rules/rulemaking-regulatory-reform-proceedings/childrens-online- privacy-protection-rule [Accessed 22 April 2018]. [2] Constine, J. (2017), ‘Facebook ‘Messenger Kids’ lets under-13s chat with whom parents approve’, TechCrunch - Startup and Technology News, 5 December Retrieved from

[3] Messenger Kids. (2018). Facebook Messenger Kids | Safe Kids Chat App. Retrieved from https:// messengerkids.com/ [Accessed 20 April 2018]. [4] Collin, P. (2018) Facebook’s new Messenger Kids app could be good for digital literacy, The Conversation. Retrieved from http://theconversation.com/facebooks-new-messenger-kids-app-could-be-good-for- digital-literacy-88857 [Accessed 22 April 2018].

[5] Shaban, H. (2018). Child advocates urge Facebook to end Messenger Kids. The Washington Post. [online] Retrieved from https://www.washingtonpost.com/news/the-switch/wp/2018/01/30/child-advocates-urge- facebook-to-end-messenger-kids/?noredirect=on&utm_term=.67de4d4ec2f8 [Accessed 20 April 2018].

Messenger Kids Case Study !7 Discussion Q1. Discuss the perceived risks that Jane experienced during pre-purchase stage and their impacts on her decision making process

Given today’s economic and competitive environment, it is crucial to understand consumers and their thought processes during stages of decision making: the pre- purchase choice among alternatives, the consumer’s reaction during consumption, and the post-purchase evaluation of satisfaction (Hoffman, Douglas, Bateson & John,

2015). A current study published on Harvard Business Review found that in order to increase customer loyalty, their decision process must be kept simple (Spenner &

Freeman, 2012). According to the findings, simple information seeking processes, trustworthy source of information, minimum perceived risks and available evaluation among alternatives are the best tools for winning consumers in the first glance. The following analysis will put perception of risks into focus to understand their impacts on Jane’s decision to install Messenger Kids app and provide recommendations to reduce those perceived risks.

Consumers of services tend to perceive a higher level of risk during the pre- purchase decision stage compared to consumers who purchase goods. They might experience significantly unpleasant consequences and uncertainty (Hoffman,

Douglas, Bateson & John, 2015). With respect to uncertainty, Jane may never have experienced how her daughter, Jess used social media before and hence has no idea what to expect. In fact, the impacts of social media on users’ well-being are proved to strongly associate with how they use the platform rather than the platform itself

(Shakya & Christakis, 2017). Therefore, even though Messenger Kids has performed well on other kids with promising performance, the mother is not guaranteed that this particular app will have the same successful outcome on her daughter. Furthermore,

Messenger Kids Case Study !8 uncertainty is likely to increase as Jane lacks sufficient knowledge on social media for kids and possible after-effects (Mourali, Laroche & Pons, 2005). Furthermore, consumers experience perceived risks also due to the level of satisfaction with their service provider in the past (Hoffman, Douglas, Bateson & John, 2015). In this case,

Jane and her husband show a great concern towards Facebook’s recent privacy and data scandal, hence, have low incentive to risk trying the new service.

The poor use of social media could lead to consequences that the Johnson family cannot anticipate with any certainty, and some of which are likely to be unpleasant. The wide range of risks that the parents perceive are presented in the table below.

Table 1. Perceived risks in Jane’s pre-purchase stage

TYPES OF RISKS EXAMPLES IN THE CASE

Functional (Performance) Privacy and data collection Risk Messenger Kids receives a lot of positive evaluation on its performance The uncertainty as to of offering a safe and engaging social media platform for kids under 13 whether the service will years old (Collin, 2017). Even though Facebook emphasises on the perform as what was complete restriction of advertising and data collection in the app, Jane promised and/or expected and other parents are still raising the great concern about kids’ privacy, mostly due to the recent Cambridge Analytica data scandal of Facebook, the parent company (Nivea, 2018).

Psychological Risk Cyberbullying The possibility that the Social media are raising the concern of profoundly impacting children’s service will not fit an interaction with others. Cyberbullying has emerged as a potential harm, individual’s self-esteem raising questions regarding its influence of mental health (Shulhan, Hamm, Scott et al, 2015).

Relational experiences & formation of children’s identity Yust (2014) points out that social media allow identity play in which kids prefer to act a role in front of the computer instead of physically interacting with people. The online relationships will encourage screen addiction and ’detached attachment’, which might have negative implication on children’s emotional growth and discourage pro-social behaviours.

Physical Risk Negative impacts on well-being Possible damage, harm or The negative outcomes on physical health are possibly caused by the injury to the consumer or screen addiction of social media users (Kamenetz, 2018), as well as the their possessions injuries from bullying.

Messenger Kids Case Study !9 The increase in negative outcomes and the importance of these outcomes will increase the perception of risk (Hoffman, Douglas, Bateson & John, 2015). In this case, due to the importance of her kid’s well-being, Jane experiences greater and more dramatic perceived risks. As a consequence, the negative outcome is likely to occur, including the withdrawal from decision making process and ultimately the purchase. Even when Jane decides to install the app, the high perceived risks will negatively impact her satisfaction by narrowing down the tolerance zone.

Theoretical frameworks recommend increasing personal sources of information, providing more knowledge and information about the service and enhancing brand loyalty to reduce the perceived risks (Mourali, Laroche & Pons,

2005). However, the case shows a considerable need to modify the service itself at

first. Detailed suggestions will be presented later in this paper.

Discussion Q2. Discuss the benefits and sacrifices Jane encountered during service usage.

Perceived value of services relative to those of competitors plays a critical role in enhancing business’s performance (Buzzell & Gale, 1987). Perceived value is defined as the overall evaluation of the consumer on the utility of a service based upon the perception of what is received and what is given (Zeithaml, 1988). The get components refer to the benefits that consumers receive from the service. In contrast, the given components associate with the costs or sacrifices that consumers encountered from the consumption. The perceived costs include both monetary price and non-monetary sacrifices such as time, energy and psychic costs.

Messenger Kids Case Study !10 Regarding the benefits, Messenger Kids offers Jess a free video calling and messaging app to communicate and stay connected with her mom and dad, grandparents and friends. Parental control, which is the main feature of the app, provides a sense of safety as Jess can only connect with parent-approved contacts.

Jane’s perception of control increases as she can request to check on the messages as they are unable to be deleted or hidden, unlike other platforms such as Snapchat,

Viber or WhatsApp, etc (Facebook, 2017). Furthermore, Facebook’s kid-friendly texting app is also easy to use and partly similar to the existing Messenger that Jane and her husband are using. The app, hence maximises the service convenience by reducing time and effort spent by the users (Berry et al., 2002). More importantly, as reported in the case, the majority of kids are using social media underage, which potentially causes risks to their mental health and relational experiences (Yust, 2014).

Therefore, Messenger Kids without ads, in-app purchases and data sharing is an appealing tool for kid’s digital literacy (Collin, 2017).

On the other hand, it is crucial to note that even though the app is free, the non-monetary sacrifices, especially the psychic costs could detract from the perceived value of the service (García-Fernández, Gálvez-Ruíz, Fernández-Gavira,

Vélez-Colón, Pitts & Bernal-García, 2018). Likewise, Jane might not want a free app because the non-monetary sacrifices related to service could be more important for

Jane and her daughter. The case points out that screen addiction, mental health- related problems, privacy issues and social relationship are of great concerns to the parents. In fact, Jess undergoes the troubles not too long after her first use. Child advocates, educators, and parents have addressed the harms of social media to children’s healthy development in the open letter to CEO Mark Zuckerberg, calling on

Facebook to shut down the app. Debating over its benefits for digital literacy, the

Messenger Kids Case Study !11 collective argues that younger children have not fundamentally developed enough to fully understand the privacy issue, including “what is appropriate to share with others and who has access to their conversations, pictures, and videos” (Garun, 2018). The lack of understanding can lead to the possibility of cyberbullying as Ryan experienced in the story. As a result, from both Jane’s perspectives and the controversial debate of the advocates, educators and other parents, the app is perceived to have negative impacts on kids, families and society.

As defined earlier, perceived value is the ratio of benefits to costs. Therefore, in order to effectively increase the perceived value, Facebook should try to lower the sacrifices, rather than adding more benefits due to the high costs associated with the strategy. Tactical suggestions will be presented at the final part of this case.

Discussion Q3. Use the Gaps model to identify Messenger Kids' service quality problems.

It is vital for service provider to constantly increase service quality to satisfy consumers. However, negative disconfirmation may occur anytime before, during or after consumption due to the gaps between the service that customers expect and what they actually receive. Gap Model is an efficient tool for company to identify the service problems, improve their service quality by reducing the gaps and hence, achieve customers' satisfaction (Naik, 2010).

Messenger Kids Case Study !12 Knowledge Gap

Knowledge gap refers to the differences of managers’ perception of consumer expectations with customers’ expectations (Luk & Layton, 2002). Generally,

Messenger Kids provides a platform which supports kids to communicate with their friends and family. However, it is not the entire customers’ desire. As for Jane, rather than simply improving communication through digital media, what Jane desires more is to improve relationship with Jess by spending more quality time with the help of

Messenger Kids. However, Messenger Kids does not provide specific activities designed for kid-parent interaction or guarantee quality communication between them. As a result, the perceived service quality has decreased.

Communication Gap

Communication gap represents the differences between how Facebook advertises the Messenger Kid and how the app actually works. The company guarantees to provide a safe and fun messaging platform with significant parental control. Even though, the app actually delivers these promises, the costs that it causes to kids and their parents are considerable, which outweighs its benefits. As previously mentioned, screen addiction, mental health issues, relational experience, etc. are the costs arising during consumption but yet to be disclaimed by the service provider.

The lack of reliability in the service will result in the decrease of perceived service quality. However, it is also important to note that the incomplete customer's input is likely to contribute to this negative outcome. The shortage of digital literacy and knowledge on responsible use of social media for kids, and Jess's overuse of social media represent a challenge for Messenger Kids to deliver on promises (Fitzsimmons

& Fitzsimmons, 2006).

Messenger Kids Case Study !13 Perceived Service Quality Gap

The above analysis points out the service gap since there is a difference between what Jane expects from the app and what she actually receives. While the mother desires a communication platform to stay in touch more frequently with her daughter, the app drives Jess further from Jane by taking up for the kid to talk with her classmates. Even though it can be argued that the outcome is subjective to user's behavior, it is crucial to acknowledge Facebook's insufficient and overpromising communication when it first introduces the app. Consequently, the lack of knowledge and information and the overemphasis on the benefits while neglecting the service costs lead to the poor perceived quality in Jane's mind and potentially cause negative word-of-mouth.

Discussion Q4. Use the customer lifetime value (CLV) metric and relationship marketing theory to explain how Facebook can make profit with Messenger Kids, a free app without ads.

Customer lifetime value (CLV) considers the total value a customer can bring to the company throughout the duration of relationship the customer maintains with the company, instead of the value limited to one transaction (Berger & Nasr, 1998). Since

Facebook offers Messenger Kids for free without advertisement or in-app purchases, this service will not generate any direct revenue for the company. Therefore, customers acquired by Messenger Kids, especially children since they do not have

Facebook accounts at this point, should be regarded as unprofitable customers for

Facebook. For a profit-oriented company, they should not have developed this app because the company is supposed to get rid of unprofitable customers (Stone,

Messenger Kids Case Study !14 Woodcock & Wilson, 1996). However, taking the customer lifetime value into consideration, those children can become profitable for Facebook if the company can retain those customers and transfer to the ‘regular’ Facebook platform when they turn 13.

Following this perspective, it makes more sense if people regard Messenger

Kids, Messenger (for 13+) and Facebook as a whole. All the free services the company offers with Messenger Kids can be considered as costs of customer acquisition. With this investment, Facebook starts building relationship with children under 13 for an opportunity to cross-sell other services that generate profits.

Installing Messenger Kids is the first transaction these new customers have with

Facebook. A great experience will lead them to make more transactions. In other words, they are more likely to install other apps that generate profits for Facebook such as Facebook, Messenger and, WhatsApp.

Customers who are satisfied with this service also spread positive word of mouth. In the case, Kelly and her mother Laura as well as Jess’s other schoolmates act as referral customers that encourage Jane and Jess to accept the new service.

Information from personal resources has significant impacts on customers’ attitudes towards the service (Hoffman, Douglas, Bateson & John, 2015). By retaining those referral customers and keeping them satisfied, Facebook can acquire a large number of new customers with potential profitability.

Another reason that the company needs to use Messenger Kids to acquire new, but currently unprofitable customers is that their flagship, Facebook, is struggling in acquiring and retaining profitable customers. In recent years, teenagers have been leaving Facebook for other social media platforms like Snapchat (Guynn,

2017). Therefore, Facebook needs to find a way to increase market share among

Messenger Kids Case Study !15 younger generations. However, comparing to the almost untapped market, competition among social media for customers over 13 is much more intensive. While the number of competitors increases, the acquisition costs also rise rapidly (Min et al., 2016).

Variables including retention rates, acquisition cost and expected expenditure of the customer all influence the calculation of CLV. With Messenger

Kids, Facebook tries to avoid direct competition and reduce acquisition costs. It will be easier for Facebook to retain kids to continue using the Facebook platform when they turn 13 versus having to acquire new customers within that age range as competition is more intensive at that stage.

These retained customers (children) will know their role and will follow the service delivery script. They will be more aware of and prepared for issues such as privacy protection that Jess’s parents concern and cyberbullying that Ryan has experienced when using Facebook underage. On the one hand, they are more likely to act appropriately and take responsibility for their own behaviours with better digital literacy. This will save indirect cost for Facebook and will reduce complaints received since users become more educated with social media service.

Effects on parents

However, from parents’ perspective, the idea that Facebook targets their children as potential profitable customers in a long term is quite irritating. Despite all the benefits this app offers to the family, parents believe that the company is just trying to reach kids when they have less digital literacy and are likely to be persuaded. By doing so, the company can lure their kids into Facebook when they turn 13. Some critics believe children can only understand the complexities of marketing communication

Messenger Kids Case Study !16 and make rational judgement when they reach reflective stage, which is around 11 to

16 years old (Roedder-John, 1999). In the case, Jess easily gets persuaded by her friends and she is not able to rationally evaluate risks and benefits before becoming a promoter herself. As a consequence, Facebook is considered as taking advantage of children.

Many Facebook users including Jess’s parents find themselves having developed spurious loyalty to Facebook, which traps them into a love-hate relationship with the service. They are unsatisfied with the service, but they cannot easily delete their Facebook accounts because of limited alternatives and high switching cost. With 84% of users expressing concern after the personal information scandal, only 8% of them decide to stop using the service (Guynn, 2018). Apparently,

Jane and many other parents do not want their children to build the same relationship with Facebook. Therefore, they are unwilling to accept Messenger Kids.

Discussion Q5. Provide recommendations on what Facebook could have done to reduce the perceived risks, increase the perceived value and reduce service gaps.

There are several opportunities for Facebook to tackle in order to make customers satisfied with the service. As discussed, screen addiction is among the major concerns to parents. The app, hence, can reduce or eliminate the pressure by adding time control feature through which parents control the duration of kids’ using the app. Customisable pop-up messages during usage, such as “Have you done your homework/chores?” are also suggested to enhance kid's responsible use of social media.

Messenger Kids Case Study !17 The following paragraph presents recommendations for Facebook to close the current gaps in their service to increase the perceived service quality and customer satisfaction. It is necessary for the app to create specific activities based on customers' demands. Facebook should focus on communicating their service’s value and co-creating value by building community groups to share experiences and provide feedbacks. The company should also create surveys to achieve further insights about the factual needs and expectations for Messenger Kids. Both quantitative method such as questionnaires and qualitative method such as focus group interview are required.

Secondly, they need to decrease the communication gap. Messenger Kids needs to provide a more congruent advertising to customer by indicating the potential problems to customers rather than building an unachievable expectation.

Meanwhile, there is a general concern from parents for a free service without advertising. After the Cambridge Analytica scandal, Bloomberg reported that Mark

Zuckerberg’s company is conducting market research to see the impact of altering the current business model by changing the revenue model to an alternative version of the service offering an ad-free experience by charging the customers (Oreskovic,

2018). To reduce the perceived risk and increase congruency of the advertising,

Facebook should provide clear guidelines to helps kids to use social media appropriately in their website. By doing this initiative, customers who are worried about their privacy may feel protected and thus be more willing for their children to use the app.

Relationship marketing can help Facebook change some negative attitudes.

Relationship is formed based on mutual understanding between service provider and customers, and in this case between Facebook and parents. Facebook should deliver

Messenger Kids Case Study !18 the messages that fully address parents’ concern, in order to reestablish relationship with those parents who are also Facebook users. Consequently, they will have better chance to cross-sell Messenger Kids to parents. Meanwhile, the company needs to show their genuine concern for children’s welfare instead of simply treating them as potentially profitable customers. The company needs to clearly demonstrate their responsibility of protecting and educating children in the digital world. One way to achieve that is focusing on communicating the relationship benefits that children can get to their parents. For example, by using Messenger Kids early, children will develop better digital literacy and privacy awareness; therefore, they will know what to expect and feel less anxiety when they start using the mature version or other social media.

Messenger Kids Case Study !19 References

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Messenger Kids Case Study !22