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Chapter 8
E-Commerce, Web 2.0,and Social Networking
Before the Internet…
• How did we do business?• How did companies communicate with
customers?• Who controlled the relationship?
E-commerce: buying and selling of goods and services over public and private computer networks
Evolution of Interorganizational Systems
How do companies use E-Commerce?
• E-Commerce is the buying and selling of goods and services over public and private computer networks
• Merchant companies – take title to the goods they sell. They buy and then resell them.– Example?
• Nonmerchant companies – arrange for the purchase and sale of goods without ever owning or taking title– Example?
E-Commerce Merchant Companies
• Types – May use different IS– Sell directly to customers • B2C
– Sell to companies• B2B
– Sell to government• B2G
• Web storefronts – customers can manage orders
Example
Nonmerchant E-Commerce
• Most common– Auctions
• Others can serve specific industries or interests
– Clearinghouses
• Provide goods and services at stated prices and arrange for delivery but never take title
– Electronic Exchange
• Matches buyers and sellers
How does E-commerce improve market efficiency?
• Disintermediation– Elimination of middle layers in supply chain• Distribution directly to buyer• Eliminates carrying costs, shipping costs are reduced
• Improved flow of price information– Customer can find best price for the value– Seller can understand price elasticity• Direct information from consumer• Price experimentation
Web 2.0Loose grouping of capabilities, technologies, business models, and philosophies
First Example:
Comparing Web 2.0 withTraditional Processing
Group Exercise
• Each group look at one of the characteristics• Compare and contrast the differences
between Web 2.0 and Traditional Processing– What do the terms mean?– Can you find an example of the Web 2.0
characteristic?
Software as a Service
• Companies that don’t sell a product or license• They provide software as a service (free)• Thin client processing (no software installed)• Example: Google Maps
Why is Web 2.0 important?
• Use increases value• Participation and ownership differences– “Do what you want, we’ll publish it.”
How can businesses benefit?
• Advertising– Adwords – you pay to put your ad on sites or in
search results– Adsense – others pay you to put their ad on your
site• Social Networking• Mashups
Internet Advertising
(Extra content, not in book)
Advertising
• Targeted Advertising possible in Facebook– Location– Demographics– Interests
• Send people to your site for information, to buy product, or to your Facebook page to become a fan
Facebook Advertising
• Designing the Ad– Choose External URL or a page– Title– Body– Picture
Facebook Advertising
• Target the Ad– Location – Demographics– Likes/Interests– Education– Workplace– Facebook Connections
Facebook Advertising
• Set the Budget
Some Terms to Know
• Total Impressions = How many times our ad is visible to users
• Total Clicks = How many times users click on our ad to visit our page
• Click Through Rate = Clicks/Impressions• Average CPM = Cost per 1000 impressions
Tracking Clicks and $ on Facebook
Designing the Ad
• Choose type of ad– Text– Image– Display Ad– Mobile Ad
Text Ad
Display Ad
Ad Settings
Keywords
• Make your own list• Use Keyword Tool to
find other suggestions
Tracking Ad Performance
Comparing CPM toEvaluate Advertising Options
• Print Advertising– $400– 32,000 pieces– CPM = 400/32 = $12.50
• TV Advertising– $1500– 135,000 viewers– CPM = $11.11
• Facebook Advertising– $2600– 12 Million impressions– CPM = $0.22
Extra Credit: The Mobile Movement
• Watch video• How do you use your phone?– Over a 3 day period, log your use. – Summarize in a chart how you use your phone
• Messages (text or email)• Information search• Purchases• Social Networking
• Did use of your phone impact purchasing decisions? How?
Social Capital
• Investment in social relations with the expectation of returns in the marketplace
• Adds Value by providing:– Information– Influence– Social Credentials– Personal Reinforcement
• Total Value of your Social Capital: # and strength of relationships and the resources controlled by those related
• Over 100 million members• Professional network of contacts• Resume management/availability• Find and be introduced to potential business
partners and experts• Interact in group settings• Recruiting
Step One – Get Established
• Establish your Profile– Contact information– Experience– Education– Recommendations
Step Two – Get Connected
• Add connections– Click on Contacts• Add connections from your:
– Email addresses– Colleagues– Classmates– LinkedIn’s recommendations
– See who others are connected with and send invitations
– Rule of Thumb: Connect with whom you know
Step Three – Get Involved
Source: http://www.socialmediaexaminer.com/social-media-funnies-bikers-get-linkedin/
Extra Credit
• Create a profile on LinkedIn• Connect with me and other professors• Join a JMU group• Post a discussion item on LinkedIn• Advice:– Review your Facebook and Twitter presence and be sure
that if you connect them on LinkedIn that there is nothing embarassing or inappropriate for a professional
– If you don’t connect accounts, make sure your security settings are appropriately set on Facebook
How Social Networks Add Value to Businesses
• Number of relationships• Strength of relationships• Resources controlled by “friends”
Traditional vs. Social Networking with Technology – How is it different?
Business Applications for Facebook
• Applications– Social– Useful– Expressive– Engaging
• What apps on FB do you use?
Should We Have a Group or Page?
• Use for group interaction and communications– Consider Facebook Groups– Can be secret, open, or closed
• Use for promotion to current or prospective customers– Consider Facebook Pages– Post variety of information related to your
business• Profiles – for individuals
Measuring Engagement
(Extra content, not in your book)
Engagement Ratio
Engagement Ratio = # of Interactions Fans
Interactions:• Likes to your posts• Comments on your post• Wall posts by others• Shares
Facebook Engagement Rates(Interactions/Fans)
0
1
2
3
4
5
6
7
8
9
Sep-10 Oct-10 Nov-10 Dec-10 J an-11 Feb-11 Mar-11 Apr-11 May-11 J un-11 J ul-11 Aug-11
Rockingham Progressive Allstate Loudoun Mutual
Comparing Engagement Ratios
Beauty of Comparing Ratios
• Denominator is # Fans – puts you in comparable terms with those who are much larger or smaller
• Allows you to see what’s working
• Downside – It’s manual
Using Twitter
Twitter’s Uses
• Short updates (140 characters or less)• Instantaneous• Relationship builder with those you may not
know…yet• Research on variety of topics• Research of candidates
An Analogy – Twitter is like a Party
• Can be as large as you want it to be• Invite (Follow) people who tweet about things that
interest you– People you can learn from– People you can help
• What do you say? – What you would say when networking at a party
• Use manners, show kindness, have fun• Source:
http://www.inc.com/marla-tabaka/giving-up-on-twitter.html
Twitter Terms
• Following, Followers• Tweet, Retweet, and DM• Hashtags to know– #anyterm – used to categorize tweets• #hburg• #jmu• #fail
– #ff – Follow Friday – recommendations on who to follow
Business Application of Twitter
• Dialogue with stakeholders– Public relations– Relationship sales– Market research
User Generated Content (UGC)
• Ratings and Surveys• Opinions• Customer Stories• Discussions• Wikis• Blogs• Videos
Crowdsourcing
• Users provide services to or on behalf of the vendor
• Combines social networking, viral marketing, and open source design
• Example: www.msdn.com
Empowering Customers
• Enterprise 2.0 – application of Web 2.0, collaboration systems, social networking to facilitate the cooperative work of people in organizations
• SLATES– Search– Link– Authoring– Tags– Extensions– Signals
Risks of Social Networking
• Junk and crackpots• Inappropriate content• Unfavorable reviews• Mutinous movements• Dependency on social network vendor
Example: www.facebook.com/progressive
