3. SOCIAL MEDIA & THE LESSONS LEARNED

Despite being a relatively new and unstudied paradigm, several lessons have already emerged from social media. These lessons come in two forms: (a) lessons on ethics and (b) lessons on society’s desire for democratic business practices.

a. LESSONS ON ETHICS IN SOCIAL MEDIA

Many businesses have thought about ways in which to capitalize on the tremendous power of social media. Wal-Mart is one of those businesses. In late September 2006, Wal-Mart launched a blog entitled “Wal-Marting Across America.” The blog featured the writings of a couple, Jim and Laura, who was traveling across America in an RV. Jim and Laura spent each night parked in front of Wal-Mart stores. They wrote about their trip and their positive experiences with the Wal-Mart employees. One such entry described an employee “going the extra mile” (qtd. in Siebert, “Pro-Wal-Mart Travel Blog Screeches to a Halt,” par. 4). Everything about the blog seemed reasonable. However, there was one major problem. Jim and Laura were being paid by Wal-Mart and that information was not disclosed to the public. Instead, the public was led to believe that Jim and Laura were satisfied customers acting on their own.

Shortly after the launch of the blog, or “flog” (fake blog) as it has come to be known, Business Week exposed the scam. What had been intended to improve Wal-Mart’s brand reputation had now become one of the biggest brand damagers in the company’s history. News headlines and bloggers from across the blogosphere ripped into Wal-Mart and Edelman – the public relations firm responsible for the flog. Bloggers sent a clear message: transparency is absolutely necessary for participation in the social media sphere. No company, not even Wal-Mart, is immune to this expectation. Consumers did and will react negatively to any public organization that attempts to deceive. [...]

2. EMERGING TRENDS IN SOCIAL MEDIA

As social media has become increasingly popular, several trends have emerged that change the way businesses should interact with consumers. These trends can be placed into three major categories: (a) Changes in Consumer-Business Relationships, (b) Changes in Market Research Practices, and (c) Changes in Consumer Expectations.

a. CHANGES IN CONSUMER-BUSINESS RELATIONSHIPS

With the advent of social media, consumers are increasingly affected by the opinions and reviews of their peers. A poor review of a product on a friend’s blog is more than enough to dissuade a purchase. On the other hand, the praising of a product through a tweet might be enough to convince a teetering customer to finally buy a product. This personalization of the decision-making process has devalued the opinions of professional product reviewers and has made it vital for businesses to interact with consumers on a personal level (Godara 146). Social media and marketing consultant Deborah Schultz, phrased it well: “it’s all about a new attitude: a behavioral and cultural shift” (Molander 39).

Understanding the new “attitude” is absolutely key for businesses. Consumers are turning to mediums like Twitter and Facebook to find out what their peers are saying about various products. Armed with that knowledge, businesses must enter the social media realm as well. Through social media, businesses have the opportunity to effect the opinions of [...]

Mark Zuckerberg is a 25-year-old billionaire poised to be the most influential character in modern business and technology.  How is it possible that Zuckerberg, a college dropout with no prior business experience, could enter the Internet market and create the fourth-most-visited Web site in the world (Alexa)?  The simplified answer is that he recognized, or at least capitalized on a massive paradigm shift in the way we do business online. Through the development of his social networking Web site, Facebook.com, Zuckerberg practically invented what we now call social media and completely restructured the business landscape.  In order to be competitive in today’s business environment, businesses and individuals must understand (1) the changing landscape of modern business, (2) the emerging trends of that landscape, and (3) the lessons learned from this new business paradigm.

1. THE CHANGING LANDSCAPE OF MODERN BUSINESS

Five years ago, few had ever heard the term “social media.” However, things were about to change; Facebook was introducing itself to a Harvard University community, YouTube was brewing in the minds of its creators, blogging was starting to catch on, and the practices and principals of Web 2.0 were dictating how new Web sites and communities were being built (Blood).  The paradigm shift toward social media had begun and the world was taking notice.

Two driving factors identify the shift: (a) the diversification of information authors and (b) the reconsolidation of information mediums.

a. THE DIVERSIFICATION OF INFORMATION AUTHORS

Traditionally, information has been funneled through major media organizations like CNN, Fox News, and The New York Times.  These organizations act as gatekeepers through which information must pass before it is received by society at large.  The gatekeepers decide the relevance and importance of information.

Social media has restructured this process.  Instead of funneling information through the gatekeepers, social media acts as a bridge that connects information directly to [...]