Social TV Adds Value for Companies and Customers

Can social networking be considered an effective marketing tool, one that creates value for final customers? Market research shows that, during 2008, companies have increased their use of wikis, blogs, RSS, and podcasts, while their recourse to social networking has pretty much stayed stable compared to the year before.

The main function and advantage of a social network is that it allows linking across all members of a community. This advantage is behind the explosion of the social web as an online space where individuals sharing common interests can come together to share thoughts, comments, and opinions. The most popular social networking sites are: MySpace, Twitter, Gather, Friendster, Facebook, BlackPlanet, Eons, Linkedin.

Studies show that Web 2.0 is utilized by companies to improve the service they offer to final customers and to acquire new customers in existing markets. Hewlett-Packard uses its virtual community and social network to provide online support, enabling users to link to each other to exchange information and get answers on HP consumer products. This way, the company involves its customers in the production of value for the HP brand and reduces technical support costs. Also Texas Instruments manages an online community that provides information on its products. Its role is especially relevant for value creation in the post-purchase phase. Websites such as YouTube, del.icio.us e blogger.com also leverage their online communities to provide content that is then employed to generate advertising revenues.

Social TV is one of the most interesting phenomena linked to the development of online social networks. With this expression we refer to video services on the web that integrate other communication services such as voice, chat, context awareness, suggestions, peer ratings. The aim of social TV is to allow a shared television experience with other members of your group, as defined by social network communities on Facebook and YouTube. Social TV applications allow real-time interactivity with your network of friends, based on video-sharing and reciprocal recommendations. In the new context, the value created through the social network adds to the value of the product or service being offered, thereby creating a new value function: B2C + C2C (Business to Consumer plus Consumer to Consumer).

For the creation of services characterized by the presence of content generated by the same users, corporations should consider two critical aspects: persuading the target audience to enter the community, and persuading those that are already community members to go beyond passive spectatorship to create their own content. The emergence of such behaviors is influenced both by individual factors such as personality, perception, and experience, as well as to factors pertaining to the sphere of interaction and meaning surrounding the individual. Social networks thus represent new marketing tools that augment customer value and also pose a new challenge for firms to make an effective use of them, by capitalizing on the value offered to their customer base.