Market Opportunities for Social Software
Social Software - Hype or Future Market?
Within only a few years, new media formats have been established on the Internet which are embraced by the term "Social Software". Social software refers to all those applications which support communication, interaction and collaboration in the Web. They are an instrument for initiating and maintaining social relationships, they facilitate project work spanning distributed locations and encourage information exchange. E-mail, Instant Messenger and groupware applications are among the well-known ones whereas applications like weblogs, wikis, social bookmark services and podcasts are novelties.
Compared with previous applications, they are easy to use and therefore open to users without any programming skills. In addition, they are based on the principle of self-organisation – there is no controlling authority. Anyone can comment on articles and link relevant information. The result is an enormous dissemination potential, which is responsible for high rankings, for example of weblogs, in search engines like Google. This means that information and relationship networks are growing exponentially.
Social Software in Relationship Management
Companies are increasingly interested in this dynamic and it is gaining ever stronger influence on business processes. EBusiness not only focuses anymore on the mere processing of transactions (ordering, registration, data administration) but also on the interaction with business partners and customers. Thus, new potentials in the field of B2B as well as B2C are created. Central to these new applications is direct communication, which allows for a dialogue with all important stakeholders.
Blogs for example are quickly and inexpensively constructed and easily operated. They are therefore in particular qualified for small companies not having a large marketing or PR department. By means of corporate blogs, current industry related issues and competitive strategies can be commented on (CEO blogs). In case of product or company crises, an argumentative discussion with citizens, customers or other stakeholders concerned is possible at short notice (product and crisis blogs).
Social Software in Knowledge Management
By using knowledge databases called wikis, new possibilities are opened up to jointly concentrate and position information. Regions and towns already use such social software applications in order to present themselves on the Internet, for instance the city of Karlsruhe, whose wiki is at the moment the largest city wiki in Germany.
Wikis give companies the chance to easily concentrate information cross-sectorally. In a company, knowledge is not always generated there where it is needed: The service department for example learns directly and at first-hand from the customer which problems occur with a product. This knowledge must then be transferred to the research & development department, only there it can be introduced into the product development process. Employee know-how can be concentrated at a certain point and managed efficiently. The coordination of different partners in large projects is just as well supported by these forms of social software as the documentation of large-scale software development processes. IBM, for example, already keeps over 2,800 weblogs worldwide for knowledge and project management. This leads to the development of completely new forms of cooperation, knowledge generation and information.
Social Software in Marketing
Another objective of the use of social software applications is to support project launch. Numerous companies already use social software applications in order to promote their products target group-specificly. When introducing their products, they count on the positive net effect which makes sure that the short, entertaining advertising films (vodcasts) or radio features (podcasts) wander via e-mail from one potential customer to the next without any further active dissemination on the company’s side. Thus, the circulated contents penetrate the social networks of the Internet users at an almost exponential rate. In contrast to traditional commercial mailings, the messages are passed on through personal contacts. This type of dissemination is usually referred to as viral marketing. DaimlerChrysler, for example, uses these applications for introducing the new R-Class and communicates its vision of a new generation of diesel-engined vehicles by the medium of podcasts.
You will find more detailed information on this topic in our current market study "Market Opportunities by Social Software" (in German).
