Social Capital, Social Capital Markets (follow SoCap09 on Twitter), Social Enterpreneurship, Social Venture Capital (…) are very buzzworthy terms at these days, and they are all in the the close relation with Social Media…
It is indicative that many social media experts use the term “Social Capital” to clarify and define the benefits of an organization’s use of Social Media, although there are not a lot of places where you can find the explanations about connections between the Social Capital and Social Media.
Defining Social Media Capital
Social capital is a social science concept, which in essence defines the value of the connections in the (offline and online) social networks.
As in the other forms of Capital, the value is not important by itself,Â when it is produced by the connections in the social networks. That value can be earned and spent, as the benefit of organization’s engagement in social media environment.
According to Susan Mernit, Social Media Capital represents the value which is developed by the connections, the reputation and the influence of an individual or an organization, in the social media environment.
Susan Mernit also defines the connections between Social Capital and Social Media Ecosystem (Social Media Capital), with the three Rs rule – Referral, Recommendation and Reputation.
The Experts and the Practice of Social Media Capital
Steve Rubel recently created a column in The AdAge magazine – “How to Build Social Capital“, with the practical advices in the field of Social Media Capital.
Mashable has the interesting text related to Social Media Enterprise, or B2B segment of Social Media Capital.
Stephen Denny has interesting example which clarifies the difference between Offline Social Capital and Social Media Capital:
A friend of Stephen Denny (she has a significant offline social capital) posted a Tweet, which made him ‘a little angry’: “Please go to some website and vote for my company in some contest that you’ve never heard of.”
In this case, the online reputation of the mentioned person is not well developed, although she has earned enough offline reputation, according to Mr. Denny. She could not persuade him to do the desired action, because she does not have enough online influence:
- The reputation between these two persons is developed through theirs mutual trust. It is not a trust between her company and him. The trust in friend and the trust in friend’s company are two completely different trusts! Advice – Do not forget that you are not the company you represent!
- Unknown Web site and unknown contest are not the ways how you can earn the online credibility. One of the basic parameters of the development of online credibility is – provide the relevant content. If you do not know what is a relevant online content, you have to learn online evaluation.
Social Media Capital and Reputation Economy, Social Innovation, Generation G
It is very obvious why at these days all of “stuff in business” is related to “Social Innovation” (look at the first paragraph of this article).
In online environment, Social Media Capital is the concept that follows the thoughts about “Economy of Free“, by Chris Anderson, which is based upon something called “Reputation Economy“.
Some authors use the term Whuffie (Whuffie Factor) as the Reputation System measure. Whuffie is the reputation-based currency, and it is perceived as the synonym for Social Capital. The authors who use the term “Whuffie”, they put the equal sign between the Social Capital and the reputation.
There is the (online) population which is (conceptually) raised through the actual social changes, and the (buzzword) name of those people is “Generation G” – “G” comes from “Generosity”. “Generation G” is culture of individuals (based on the leading societal and business mindset) who share, give, engage, create and collaborate in large numbers.
It can be said that reputation means social (media) capital, or in other words, reputation is currency that influence the most of the online business success.