Social Networking Service Branding

Branding is one of the success factors in business and the segment of social networking services is not an exception. Branding can provide a number of advantages to products and services, including social networking services such as increasing the levels of product recognition, assisting with new products positioning, and formation of strong brand equity.

Due to the highly intangible nature of social networking services, their brand value can be stated to be highly subjective. Specifically, when Facebook went public in May 2012, its share has been priced as USD38, causing the company to be valuated at USD104 billion, the highest valuation for a newly listed public company to date.

However, its share price has been reduced to USD18 after only several months by August 2012 (Miller, 2013).

Social networking service is a highly competitive area and the major players in this market include Facebook, YouTube, LinkedIn, Twitter, Pinterest, Google+ and others.

Comparisons of various aspects of social networking sites as of July 2013

Source: eBizMBA 

Interestingly, assessment of popularity of social networking sites is not a straightforward matter. For example, opening a Google Mail (Gmail) account automatically registers a new Google+ social networking profile, and for this reason Google has been subjected to criticism in terms of proving inaccurate data of the popularity of its social networking platform.

All of the successful social networking service provides listed above target specific customer segment among population. For example, LinkedIn is mainly aimed at professional aiming to establish and sustain professional networks whereas Pinterest positions itself as an informal social networking site.

However, a certain tendency can be observed in this regard in a way that leading social networking sites such as Facebook, Twitter and Google+ are constantly increasing the scope of their target customer segment, aiming to attract population of all ages, professions, levels of education etc.

Moreover, due to similarity of functions and features of the majority of social networking sites the importance of patents, trademarks and intellectual property is paramount in the field of social networking services. In other words, innovations in design and functions is a critical success factors for social networking services, however these can be duplicated by other social networking sites, and therefore they need to be protected as intellectual property by patents.

There are many lawsuits are in progress in e-commerce in general, and social networking area in particular at any given time. For example, according to Roberts (2012) Yahoo! alone has submitted claims against Facebook for 10 patents such as Dynamic Page Generator (US Patent 598327), Online Payback System with Community Bias (US Patent7454509), System and Method to determine the validity of an interaction on a network (US Patent 7668861) and others.

Similarly, trademarks represent another important area in business that should not be underestimated in the provision of social networking services. Perceived to be an effective identifier of a business, trademarks secures the name, logo and other elements of the business from being used by other businesses, and take unfair advantage of brand value and competitive edge associated with the business that has ownership of the trademark.

Social Networking Service Branding as a Source of Competitive Advantage

Brand positioning decisions have been made by strategic level management in relation to each of the popular social networking sites discussed above, and specific sources of competitive advantage have been selected in each case.

For example, the most popular social networking site Facebook has formulated its mission statement as ‘to give people the power to share and make the world more open and connected’ and accordingly Facebook attempts to attract customers through valuing and promoting democratic values and open-culture.

An alternative social networking site, Twitter, on the other hand, associates its competitive advantage with ‘real-time sharing’ i.e. the possibility to share the messages of up to 140 characters in a real-time manner. Therefore, through a range of additional Twitter features such as ‘reply’ and ‘retwet’, messages shared in this specific social networking site can be spread across the globe in shorter period of time. Twitter also places its competitive advantage on simplicity of design and usage of its services.

Competitive advantage of LinkedIn relates to its focus on providing network among professionals and accordingly its brand positioning is closely associated with offering career benefits to users.

Lack or absence of competitive advantage can be deadly for the future of any social networking site, and the same is true for any other type of business. Therefore, it is important for the providers of social networking platforms to be focusing on their present competitive advantages, and at the same time exploring opportunities of finding new sources of competitive advantage.

Negative Aspects of Social Networking Services and their Impact on Service Branding

There is a set of disadvantages associated with the use of social networking sites and services such as loss of privacy, online bullying, fake profiles and wrongful information, and internet addiction and these issues might have negative implications on performances and branding efforts of social networking providers.

Loss of privacy and compromising the security of personal data can be specified as one of the main disadvantages of using social networking services. There is a risk that personal data on user profiles can be accessed by individuals and organisations and used for a wide range of illegal purposes with negative implications on the users of social networking profiles.

Although leading social networking service providers such as Facebook, Twitter and Google+ have publicly declared their high level of commitment to data protection through various channels, the loss of privacy and data remains to be a substantial problem, causing many people not to use these services.

Another significant disadvantage of using social networking services relates to the display of inaccurate information on user profiles, status updates, and viral messages. Inability of users to check the authenticity of information on social networking sites further enhances the negative impacts of this problem.

Inaccurate information might be published in social networking platform for a wide range of reasons such as attempt to impress other people, major scam program, humour etc. nevertheless these instances greatly compromise the branding efforts of social networking service providers. Specifically, this negative impact relates to loss of belief on all messages appearing on social networking sites by users that may even led to the relevant account being deleted.