The challenges and opportunities of Social Media

Andreas M. Kaplan, Michael Haenlein

ESCP Europe, 79 Avenue de la Rèpublique, F-75011 Paris, France


The top of the agenda for many business executives all over the world are Social media. They all try to find a way to use Social media and how to make a profit out of it. Such as Wikipedia, YouTube, Facebook, Twitter and Instagram are applications that business executives are interested in using to achieve profit. Despite the interest there seems to be limited understanding of what “Social media” means. This article will intend to clarify some of the questions around the term “Social media”. We are going to start by describing the concept of Social media and discuss the difference from related concepts like Web 2.0 and user generated Content. Then we are going categories the different applications of Social media into more specific groups, like: collaborative projects, blogs, content communities, social networking sites, virtual game worlds and virtual social worlds. At the end of this article we are going to provide 10 tips for companies that intend to use, or already are using social media.


  1. The specter of Social Media.

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  1. What is Social media – And what is it not?

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  1. The challenges and opportunities of Social Media.

3.1. Collaborative projects.

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3.3. Content Communities

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3.4. Social networking sites.

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3.5. Virtual game worlds.

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3.6. Virtual social worlds.

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4.Ten pieces of advice for companies deciding to use Social Media.

The domain, Social media is very active and always moving forwards. The Social media applications that are popular and up-to-date today may have no popularity tomorrow. Because of that it is important for firms to have a type of direction guide that can be applied to any form of Social media. We will divide our advice into two groups: five points about using media, and five points about being social.

4.1.1. Choose carefully

There are a lot of Social media applications and new ones appear every day.

  • “Being active” on Social media is one key requirement to success.
  • Choosing the right medium depends on the target group and the message to be communicated.
  • Each Social media application attracts a certain group of people, and firms should be presence where the customers are.

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4.1.2. Pick the application, or make your own.

In some cases the best thing is to just join an exciting Social media application and take advantage from its popularity and user base. Social media applications only get more attractive to join the more members it got. Sometimes the right application just isn’t available yet. Buy, make or both – whatever the decision is, it is crucial to understand the basic idea behind Social media. It is not strait forward selling or advertising, it is all about sharing, participation and collaboration.

4.1.3. Ensure activity alignment.

If one decides to use several Social media applications in order to have the largest possible reach it is very important that the Social media activities are all coordinated to each other. Using different contact channels can be rewarding and profitable. But it is important to remember that the goal of communication is the reduction of uncertainty. Nothing are more confusing than contradicting messages from several different channels.

4.1.4. Media plan integration.

Different types of Social media also hold for the relationship between Social Media and traditional media: integration is the vital. While you may think of these things as complete different channels, consumers do not. Both Social media and traditional media represent your corporate image. It is also important to remember that Social media has low cost media coverage if you compare to standard advertising in traditional media, and the high impact Social media have can lead to profitable results.

4.1.5. Access for all.

Once it is decided that the firm is using Social media applications it is worth checking that all employees may actually access them. Many firms usually block Facebook, YouTube and Second Life on corporate computers for fear that staff might spend a lot of time on Social media rather than working. This is a possibility, but it cannot imply that employees need special permission to enter the company blog. But you do need to avoid that every one of your employees are working on material to the blog at the same time. One possibility is to make one group in charge of the management of corporate Social media, and let the other employees be occasionally participations. The first group will then have the administrator rights – while the second group does not. Eventually there will be necessary to create guidelines for the Social media usage. For example it is very important that every employee needs to identify himself or herself when posting a comment on the corporate blog. Otherwise, end-consumers could get the wrong impression that anonymous accounts are used to enable employees to post fake messages and overly-positive feedback. This could seriously damage your whole Social media campaign.

4.2. Five points about being social.

4.2.1. Be active.

Social media are all about sharing and interaction, so make sure your content is always fresh and that you engage in the discussions with your customers. It is important to remember that your effort in Social media extend beyond answering to negative comments and defending product offerings. Social media is about engaging people in open and active conversations. Participants on Social media has the desire to become both producers and consumers by engage actively. Be considerate of this and act accordingly.

4.2.2. Be interesting.

If you would like your customers to engage with you, you need to provide a reason for them to do that. First, listen to your customers. Find out some basic things about your customers, what they would like to hear, talk about, what is interesting to them enjoyable and valuable. You need to develop content that meet those expectations, and to keep the customers interests in mind every time you post something.

4.2.3. Be humble.

Social media existed before you decided to engage in them. Do not expect that you know better how to use them than others that have spent hours and hours on Facebook and Second Life, for example. Before you start using or entering any application, first take some time to discover it and how to use it. Learn some basic rules and its history. Interaction and feedback are very important elements in any type of Social media, and blogs. The way to failure is by thinking that Social media is just about posting existing TV spots on YouTube or putting prefabricated press announcements on corporate blogs.

4.2.4. Be unprofessional.

Avoid overly-professional content offerings. Blend in with the other users and don’t be afraid to make mistakes. There is no need to spend a whole lot of money to design a perfect MySpace profile or to hire professional’s writers to manage the corporate blog. Maybe a work colleague can write about his or hers last vacation. Social media users are just like you, they know that everything doesn’t always go perfectly. By being nice to other Social media users you can go a long way.

4.2.5. Be honest.

Be honest and respect the rules of the game. Do not try to force your way into Social media where companies are not allowed to be involved. Other participants may in some cases find out who stands behind anonymous user accounts, because in Social media you are dealing with some really technologically people from all over the world.

5.Nothing to lose but their chains.

If you are not participating in Social media like Facebook, YouTube or Second Life some industry gurus claim you are not a part of cyberspace anymore. Read more:


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