Adopting Online Social Networks for Commercial Friendships

Presenter

Dr. Sabine MatookThe University of Queensland

UQ Business SchoolBrisbaneAustralia

Dr. Sabine Matook and Dr. Susan A. Brown

Agenda

1. Motivation and Introduction2. Background on Relationships3. Research Model and

Hypothesis Development4. Survey Results and Scenario

Interviews5. Outlook

Motivation• Online Social Networks (OSN) are a special form of social

networks on the Internet• OSN members create personal websites and add personal

information in these networks to connect with friends, family, and colleagues.

• OSN can have different purposes : business-oriented networks and personal-oriented networks

• OSN allow us to digitally represent our connections with other individuals - our network of social relationships

• Statics : MySpace has nearly 130 active users, Facebook more than 300 million active users

• That means, we have a fascinating phenomena – but what do we do with it? – is not utilized to its full extent

Introduction

• Introduction of commercial friendship in personal-oriented OSN

• A commercial friendship emerges when a firm representative is given access to the OSN by the user

Benefit for firms

• Requires OSN users willingness to add the firm rep

Research Question: Which factors influence the OSN user to add commercial representatives to their friends’ lists?

My academic history• Individuals establish relationships to satisfy needs • Communal relationship and exchange relationship (Clark

and Mills, 1993)• Exchange relationship: members assume that a benefit is

given with the expectation of receiving a benefit in return. The receipt of a benefit incurs a debt or obligation to return a comparable benefit.

• Communal relationship: members assume that each is concerned about the welfare of the other. Behaviours are motivated by nurturing and caring for the needs of the other.

• Friendships are classical communal relationship• Commercial relationships are inherently exchange, they

may take on communal characteristics (Price and Arnould, 1999)

Background on Relationships

Commercial Relationships

• Commercial relationships are of interest in relationship marketing.

• Social exchange theory (Thibaut & Kelley, 1959): individuals engage in relationships as long as they are rewarding.

• Assumption that a benefit is given in expectation of receiving a benefit in return

• Relationships assessment with respect to the benefits and costs

TEACHING & LEARNINGUnderstanding commercial Friendship in OSN

•Personal-oriented OSN are friendship networks•OSN users add another person based on the friendship relationship• If a firm rep wants to be added then s/he needs to play the “friendship rules” and offer benefits while keeping the cost at a minimum •Relationship marketing examined benefits and hindrances (costs) a customers can expect to receive from engaging in commercial relationships

Benefits commercial relationships

Relationship benefits relate to 4 types:

1. Social benefits : emotional part of the relationship

2. Psychological benefits :cognitive processes of triggered by the relationship

3. Economic benefits: monetary benefits

4. Customization benefits : special benefits

TEACHING & LEARNINGCosts of commercial relationships

Relationship costs are categorized into 4 themes:

1. Up keep themes: activities to keep up the relationship

2. Time themes: time to initiate and utilize the relationship

3. Benefits themes : Existence of problems with the benefits

4. Personal loss themes: privacy issues, anonymity, and loss of social status

TEACHING & LEARNINGWhich benefits and costs matter in OSN?

The benefits that matter in OSN are: (1) convenience, (2) preferred treatment, (3) discounts/price breaks, and (4) tailoring of services. 

The costs that matter in OSN are: (1) loss of privacy through self-disclosure, (2), loss of content control, (3) loss of social status, and (4) risk of missing out otheropportunities.

Considering the virtual environment of OSN, certain benefits and costs are relevant.

Different Behaviors in OSN

• Users do use different functions in an OSN

• Use of security featuresto restrict access

• Different intensity of usage (frequency of updates, number of friends, time spent to post and read others messages)

• Different behaviour is motivated by individual characteristics, e.g., extraversion-introversion

Block Information It Can ContainInformation Information Basic – age, gender, religious and

political views;Contact – telephone, address;Relationships – your status and what you are looking for;Personal – details of hobbies and interests;Education – where you have studied;Work – current and past places of employment;Picture – a place to store pictures you want to use as your profile image.

Status A place to write what a user is currently doing/thinking.

Friends A randomized listing of 6 of a user’s friends and their profile pictures and a link to a page displaying all your friends.

Photos A list of user created photo albums generated via an application that allows a user to upload photographs to their profile.

Video A facility to post videos to a profile.Notes A place to write notes and import them from other

spaces on the web, such as blogs.Groups A list of Facebook groups a user belongs to.The Wall A bulletin board where friends can leave messages,

notes, good wishes and other comments.

Light et al., 2008

12

Defining Friendship Relationships

(1)friendship is associated with intimate self-disclosure because friends are expected to share any personal issues;

(2)friendship is based on voluntary social interaction and thus, friends are expected to commit free time to the interaction with one another in the absence of any external pressures;

(3)friendship is motivated by a communal orientation, which means that rewards are not given in expectation of a return and individuals operate on the principal of concern;

(4)friendships have an intrinsic, end-in-themselves quality, which means there is a mutual personalized interest in the degree to which the partners react to one another as unique, genuine and irreplaceable.

Subjective closeness of the friendship = extent to which communal norms are followed, which means friendship characteristics are present

Research Model

H1: A positive value of the relationship has a significant positive impact on an individual’s willingness to add the firm representative as an OSN friend. H2: A negative value of the relationship has a significant negative impact on an individual’s willingness to add the firm representative as an OSN friend .

H3: OSN behavior has a significant impact on an individual’s willingness to add the firm representative as an OS friend.

H4: Individual characteristics have a significant impact on the willingness to add the firm representative as an OSN friend.

H5: The degree of closeness has a significant positive impact on the relationship between the value of the relationship and the willingness to add.

Empirical WorkMulti-Step procedure:

1. Determination of benefits and costs individuals (i.e. OSN users) see in adding a friend and a firm rep to their network

2. Development of scenarios

3. Pilot test the scenarios in interviews with OSN users

4. Pilot test the scenarios with OSN users in final settings

5. Large study to determine factors that impact the OSN user to add a firm rep to their friends’ list.

Determination of benefits and costs for OSN users

• Open – end online survey among 59 facebook users• Demographic • Four questions to determine benefits and costs

1. Why would you add someone as a friend to your Facebook?

2. Why would you NOT add someone as a friend to your Facebook?

3. Why would you add THE TRAVEL AGENT as a friend to your Facebook?

4. Why would you NOT add THE TRAVEL AGENT as a friend to your Facebook?

Introduction of a service encounter and then

Results - Adding a friend

Would add because Would NOT add becauseReason Frequency Reason Frequency

Ongoing close relation ship with the person 34 Person is unknown 50

Person is know - superficial relationship 34 Person is not liked 14

Maintain current contact & revive past relationships 33

"I don't want them to know my personal details"

14

Initiate new relationships 13 Contact with the person is not wanted 11

Social Surveillance 11 Only loose contact exists 6

Share personal details and information with others 6

FB is only used to stay on contact with family and close friends

3

Results - Adding a service providerWould add because Would NOT add because

Reason Frequency Reason Frequency

To get updated information 6 Fear of personal information disclosure 16

To receive discounts/ promotions/ deals

8Fear of getting spam / advertising/ selling me something

13

Perception of a personal relationship 10 Dislike the person in face-

to-face interaction 2

To build a closer relation- ship with the agent 8

I don't want to use my Facebook for business purposes only social

6

Convenient contact option 13No existing relationship with the person "he is not my friend"

25

I would not. 21 Uncertainty about the purpose 7

Scenario Development

-- Explorative study to pre-test the scenarios-- Interviews with 35 Facebook users

Creation of scenarios that include:• Aspect of friendship in communal relationships• Relationship benefits of commercial relationship• Relationship costs of commercial relationships

Test of three scenarios – many more combinations possible1. Commercial relationship cost and commercial relationship

benefits are balanced (C=B) and friendship is not present2. Commercial relationship cost are larger than commercial

relationship benefits (C>B) and friendship is not present3. Commercial relationship cost and lesser than commercial

relationship benefits (C<B) and friendship is positive present

My academic historyAnd finally think about this situation. You just booked a trip to Florida and you had a lot of fun with the travel agent while choosing a cool hotel. In addition, he pointed you to a hotel hat had a good price but also was in a quite and safe neighbourhood. After every-thing is booked the travel agent Chris suggests that you add him as a friend in Facebook. You are now considering whether or not you should accept him as a friend in your Facebook account. Chris has a VIP membership with the Hilton Hotel. If you add him as a friend in Facebook, he will share his membership benefits with you, so you would get a buy-1-get-1-free dinner buffet voucher. In addition, when you are on this trip to Florida, you would like to have more information on cool locations in Miami and the ferry schedule to get to Key West. Chris (the travel agent) is always online with his Facebook account. Through the internet in the hotel lobby you can easily get him on Facebook to ask him any questions, using instant messages for his immediate response.Also, Chris’s company (the travel agency) is a corporate partner with United Airlines. Thus, he has access to a lot of discretionary benefits from the airline. If you add him as a friend in Facebook, you can get a once in a while free upgrade to Business Class and not only for the Florida trip now. But at the same time, you are concerned that Chris could see all the pictures of you including your pictures taken at your birthday parties and on your trip to Orlando’s Walt Disney World with your little sister.

Example for a scenario :: 3 benefits-1 cost + friendship

Balanced (2B-2C)

Unbalanced towards Costs (1B-3C)

Unbalanced towards Benefits (3B-1C)

YES - Add NO - Add YES - Add NO - Add YES - Add NO - Add

Frequency 14 21 7 28 23 12

Percentage 40% 60% 20% 80% 66% 34%

Results – Scenario Development

Balanced (2B-2C)

Unbalanced towards Costs (1B-3C)

Unbalanced towards Benefits (3B-1C)

YES - Add NO - Add YES - Add NO - Add YES - Add NO - Add

Frequency 14 21 7 28 23 12

Percentage 40% 60% 20% 80% 66% 34%

Combination FrequencyYes – No – Yes 8 membersNo – No - Yes 9 members

sum: 17 membersAll three Yes 5 membersAll three No 11 membersOutlier: Yes-Yes-No/ No-Yes-Yes 2 members

TEACHING & LEARNINGQuotes from the Interviews with Participants

Quotes MeaningShe is not going to post on my wall, because she won’t be allowed to and she won’t be able to see my friends because she won’t be allowed to.

Participant would use security features to access the information that service provider would see.

The benefits are too good, and I had fund with him, I did like him obviously – so why not?

Participant’s decision was impacted by the benefits but also the perception of a personal relationship.

Yes. Using Facebook is my personal & professional life already collided. Usually I would keep them separate, but as soon as I have a Facebook account, I adapted my activity accordingly. I am showing less and less of myself in Facebook. Instead of removing myself from Facebook, I change my behaviours.

Participant indicated that the use of personal OSN for commercial friendships is feasible.

Because she can give me discount, and it’s handy that she is on facebook chat all the time, because, if I am stuck somewhere I could ask her. I don’t worry about her seeing the pictures.

For this participant, the benefits outweigh the costs in scenario 3.

No, I don’t think I need a travel agent as a friend in my Face-book account. I mean it’s none of the travel agent’s business what I am doing. I doubt there are any benefits for adding him in my Facebook.

For this participant, the costs outweigh the benefits in scenario 2.

For the upgrade to business class, sometimes, you can get it from the mileage program. If you have to paid all your benefits with your privacy, the benefit does not outweigh the privacy.

For this participant, the costs outweigh the benefits even in scenario 3.

TEACHING & LEARNINGOutlook

• Finalize the scenarios • Develop the questionnaire to collect data

for the OSN behaviour• Pilot study again and final study

TEACHING & LEARNINGThank you very much for your attention.

Any feedback, comments, and suggestions for us in continuing with this research project.