The Economy of Social Media

With a plethora of social media websites out there from Facebook to Google+ to “you name it, we've got it” one has to ask how they all got up and running and are still in business. I know that they say that anyone can start a website but in order to be successful you need to have some kind of business acumen, seed capital from somewhere, marketing help, and lots of other things I would guess to be successful. We have all heard the story of Facebook and its origins in a bedroom in Harvard. But in order for Facebook to grow beyond that it needed people willing to invest in it and had money injected into it from various sources such as Peter Theil of Paypal and Accel Partners (wikipedia.com, 2014). Bodies like these didn't do it out of the goodness of their hearts. They believed in the product and felt it would be successful. Facebook had to present a business model to such people to show, what was the concept it had, how it would grow, provide budgets for its business, how it would market itself. Accel Partners for example put $12 million into Facebook back in 2005 (wikipedia.com, 2014). I am sure it wouldn’t have unless it was convinced by what had been presented to it. By putting in seed capital they provided Facebook in the early days with the monies to grow and develop into the site it is now. To allow it to hire the expertise it needed across all aspects of its business, Further down the line even Microsoft injected monies into it (wikipedia.com, 2014). You don’t have to have big backers to make launching a social media site possible, and building your own community. There are sites on the web that allow people to do this. Sites like ehow.com show you how to start a social media website and guide you through all the steps necessary.   

With a site up and running and hopefully making money profit then raises its head. This can come in different forms. It can be a purely revenue based item as in advertising revenue which is the main revenue from social media sites; it can be profit from the point of view of the number of hits or subscribers using the site. The general public can profit from having such a site available. They can benefit from, for example, being able to communicate with friends on say WhatsApp to keeping in touch with friends on Facebook. People who have invested in the site from say private investors providing seed capital to the general public buying shares will see profits in the form of dividends or increase in the value of their shares. When we talk of SM sites we are not talking of industries that produce widgets. It is in an electronic format, intangible, all bits and bytes, sent across cyberspace. The way it is developing and what has been pointed out in previous blogs a huge portion of the world’s population is engaged, and is continuing to grow, with these sites and enjoying what they offer. We are all consumers of such sites from messaging with family and friends on WhatsApp to tweeting about the world around us on Twitter, the list is endless.

http://en.wikipedia.org/wiki/Facebook

http://www.ehow.com/how_7893191_start-media-website.html#ixzz2uB116OCF

When I think of graphs, I think of math's problems with an x and y axis and scratching my head trying to work out how to complete the problem! In respect of Social Media it is a different animal altogether. There are various definitions in respect of it floating around the web.

From what I have read, in general, it can be looked at as a web of data or a data structure. Looking at the graph below it can be you in the middle and all the bits and pieces of data you have online in social media sites and everywhere else on the web and how that connects you to your friends, other people, companies, events, communities and vice versa. From getting tagged in a photo or liking a posting on Facebook, to liking a song on Pandora or posting on a community website, these all are part of the social graph. Per businessinsider.com the social graph "draws an edge between you and the people, places, and things you interact with online."

(Image courtesy of http://socialgraphcentral.wordpress.com/)

This data is very important to many parties outside your immediate circle of friends, communities etc., it is important in a commercial sense. Our habits on these sites, our likes, dislikes, recommendations are important to advertisers and companies targeting goods at not only us but the people we know, the communities we are part of. Those recommendations that turn up on Facebook are carefully targeted to you. It drives on-line commerce by increasing the seller's audience and the follow-on sales. It can also enrich the user. It can provide opportunities to people either through increasing their job prospects, drumming up business, selling things on-line, to putting people in touch with others who in everyday life would not meet, allowing access to communities dealing with particular problems. The list is endless.

By engaging in this whole new world the user exposes both himself and everyone he is involved with to the joys of online advertising through the personal information put up in the internet. This is where the open graph can come into play. Per mashable.com an open graph refers to the Facebook Platform that "provides a set of APIs and tools which enable third-party developers to integrate with the "open graph" — whether through applications on Facebook.com or external websites and devices." For example there are numerous sites who can sign into with your Facebook name and password. Spotify for example then uses this technology to post what you’re listening to onto your friends’ news feeds. Your friends can then comment, like, or listen to the song you have been listening to.

This can then be self-propagating. Your friends can log onto Spotify with their Facebook information and do the same thing as you, increasing interest and probably sales. Countless enterprises has access to your news feed and all that precious data about everything and anything. This makes feel a bit uneasy as these companies are getting exposure to your thoughts and opinions, things that you can choose to keep private on Facebook if you choose to or other social media sites. This new technology should come with a warning, something similar to the old phrase of "buyer beware."



 http://mashable.com/category/open-graph/

http://www.businessinsider.com/explainer-what-exactly-is-the-social-graph-2012-3#ixzz2tPDZUcu9

Social Media and its importance

(Image from statisticsbrain.com)

The whole “Social Network” phenomenon is ever changing. This not only relates to the companies that come, Facebook, and go, Myspace.com, but also the demographics of people who use it, the numbers who use it, how its usage is spread across the world, even the make-up of the audience for the different social media sites. If the numbers are to be believed there are hundreds of millions, even billions of people using sites from Facebook to Twitter to YouTube. Are we living in a global village? From a size perspective maybe.

From a survey done by marketingfacts.com it found that in May 2013 it found in the United States alone that “Nearly three-quarters (72%) of online US adults were using social networking sites as of May 2013, up from 67% in late 2012, according to a recent report from the Pew Research Center's Internet and American Life Project." This equates to hundreds of millions of people. The demographic of this is quite interesting and is on the website. The highest group is women and aged between 18- 29, educated and earning less than $30,000 a year and living in an urban area. Please read more at http://www.marketingprofs.com/charts/2013/11514/who-uses-social-networks-age-race-gender-and-income-breakdown#ixzz2svFIoDVv.

When we look at world in total, the site statisticbrain.com throws up some amazing facts. It makes for very interesting reading. Please see below.

http://www.statisticbrain.com/social-networking-statistics/

Per the site the top county using social networking is Israel with 11.1 hours on average per month, while the United States only comes in at 7.6 hours. The statistics are surprising in that what is classified as “engaged” countries in social networking there are very few western countries i.e. the United Kingdom, the big countries of Europe. The big users are countries such as Russia, the Philippines, Turkey, Columbia and even Chile. So size doesn’t actually equate to usage volume. One would think the USA would be on top of the chart because it is so technologically advanced and its population in general is sophisticated and plenty of disposable income to buy devices to use social media. But no, per the statisticbrain.com website Israel leads it.

When we talk about a global village, and one unified group we have to remember that social media can be different in countries. For example in China there are many different sites used by Chinese users, maybe because of censorship laws, but even saying that these sites accommodate local cultural needs. Please check out link to these sites at business insider - http://www.businessinsider.com/a-quick-guide-to-chinas-social-networks-2013-10. The US social media sites dominate the rest of the world in general, i.e. Facebook, YouTube etc. but within these countries the demographics will change from country to country. What ages dominates Facebook in Israel, maybe totally different in Russia for example. What is the salary ranges of people using Instagram in Chile as opposed to France. What are the subject’s people talk about on Facebook in Australia as opposed to Peru. All these statistics show different interests at work, different cultures in place. This information is also important from a financial standpoint as it is very important to advertisers in these countries who can make advertisements country specific and user specific within those countries. A very interesting site that gives stats per country can be found at the following link; http://www.mikekujawski.ca/2012/05/01/why-internet-users-and-social-media-users-are-now-essentially-the-same-thing/

So determining the importance of social media is hard to judge. Is it just to do with its users and the fact that we all may have a common point of interest in the way we communicate and group ourselves or is to do with the number of users and this is what the phenomenon is based on? Depending on what people are doing on social media size can be important. People can be part of large communities on Facebook for example, they can be advertising or selling things, the number of hits a video gets on YouTube is a declaration of its popularity, the size of your following on Twitter is all so important and quoted regularly in the traditional media. Size of a social media sight and its users is all so important to advertisers and a way of determining the importance of it in the world. The IPO’s of Facebook and Twitter emphasize how important size is in valuing these companies. But in saying that, the people who use social media are important as well. People are the life blood of social media, they provide the interest in it, they drive these sites forward technologically, and they spread the message about them. The people who use social media can influence popular debate, trending on Twitter, for example, is monitored and taken notice of by the relevant parties concerned. It is a fine line as to what we use to judge social media’s importance.

What is Social Media?

With the world we live in now the question asked in the title of this blog should be as obvious as the nose on your face or is it. Most people thing they are tech savvy and understand all the new-fangled ways to communicate with their friends and family. That they are using this very hip phrase "Social Media" and are part of the "scene". Most people think of social media as your Facebook's, YouTube's and Twitter's of this world, and they would be right, but most people don't know why they are  classified as such. A definition of Social Media is provided by Merriam Webster and it states that Social Media are "forms of electronic communication (as Web sites for social networking and micro blogging) through which users create online communities to share information, ideas, personal messages, and other content (as videos)", (m-w.com, 2014). This definition encapsulates a lot of things and points out that surfing the web, looking at websites, or googling people is not using social media as they don't allow the user on the main to do the above. Also non electronic media such as newspapers, magazines are not social media even though they are under the banner of media. These types of outlets allow people to comment on their websites about articles but it doesn't create an online community like the definition above states.



[Image: Yahoo.com]

Social Media gives people the opportunity to interact 24/7 in all forms from messages to pictures and videos. People can be instantly updated as to what you are doing, there is instant feedback on what you say and do and people can interact like they are in the same room even though they be hundreds or even thousands of miles away from each other . This can be a bad thing as well. As the saying says " too much of a good thing, can be bad for you". There is only so much information a person can take and I feel myself when I am using Facebook that I become jaded after a while by my friends' updates even though I love them dearly.

But what does using all of these social media sights tell us about ourselves. Are we really that needy that we need to be in constant touch with people, that "likes" or "dislikes" on Facebook satisfy some yearning for instant gratification, that tweeting about some restaurant or T.V. program you have watched is needed to satisfy an urge "to shout it from the nearest rooftop", or telling the world about your nasal hair, or whatever we are a doing at the time. Do we really not have anything better to be doing with our time! It does raise the question of what we use to do with our time before this great technological revolution happened! Were we needing to be in instant touch with each other and we didn't know it,  were we poorer emotionally because of it? There is no likes or dislikes going on in respect of what we were up to. I think we probably cherished our relationships more because of the lack of instant contact with people. That we savored our interactions with our friends when we met them as they may only have been of a defined period. That we talked more to each other. With all this tweeting and Facebook postings and Instagram etc. we don't actually talk a lot to each other. It is all written word or bits or words!

Anyway, I will stop now as I have said enough and say that I do like social media even if I expressed my doubts about I will continue to use it in the future.