This week’s theme is ‘Diffusion and Social Influence’. In this blogpost I will discuss the required articles, as well as two additional articles that I’ve found and two cases to illustrate social influence.
The first article from Aral, S. and Walker, D (2011) discusses if firms can add viral features to products so they are more likely to be shared among peers. The writers state that viral product design may be more effective in encouraging new product adoption than traditional marketing strategies. I agree with this, because when people receive an invite or recommendation from a friend, they will be more likely to react to this. However, I think that viral product design can also backfire. When people receive too much invites, they will eventually ignore all of them.
The article from Eisenmann, T., Parker, G., and Van Alstyne, M.W. (2006) discusses the challenges of two-sided networks. I think this article is very useful for platform providers. It helps them understand the Social Media market and it makes them aware of the challenges in two-sided markets.
The last required article written by Li, T., Sprengers, D. and Van Dalen, J. (2013) discusses whether Twitter messages proxy present or even future stock performance and whether they can be used to make better investment decisions in stock markets. I find this research quite interesting, because this shows how Social Media networks can be used for different purposes. Although Yahoo! Finance is a great Social Media network that is used to gather financial information for stock buyers, a network like Twitter could be even better and more convenient, because it doesn’t only provide financial information, but also other information which can affect the stock market.
However these three articles are very useful for understanding the different purposes of Social Media networks, I would like to discuss the term “social influence”.
The first article discusses the difference between social influence and homophily. The authors describe homophily as a process in which people with similar characteristics form ties. Social influence is described as the effect of influencing others with human decisions (Ma, Montgomery and Krishnan, 2009). I think this article is useful for marketing managers, because they need to identify what the reason behind a customer’s purchase is. This is because they require different strategies.
The other article discusses why social influence matters to businesses. In this article eight industry insiders define what social influence means, how to measure it, and why it truly matters. Tip: don’t spam influencers with offers, but develop a relationship with them (Dubois, 2015).
To illustrate social (media) influence, I will discuss two cases: Boxed Water and the #IceBucketChallenge. Both companies encouraged people to share content and to raise awareness. Boxed Water did this by working with influencers to spread the word about their philanthropic campaign with the National Forest Foundation, #Retree (Talbot, 2015). The #IceBucketChallenge was used to promote awareness of the disease ALS and encourage donations to research. This campaign actually encouraged participants to nominate their friends and to share their videos online (Braiker, 2014). This is a great example of a viral product design. Because people are more likely to participate when their friends nominate them and they see that their friends have also done the challenge.
References:
- Aral, S. and Walker, D. (2011) Creating social contagion through viral product design: A randomized trial of peer influence in networks. Management Science 57(9) 1623-1639.
- Braiker, B. (2014) The ‘Ice Bucket Challenge’: A case study in viral marketing gold, http://digiday.com/brands/ice-bucket-challenge-case-study-viral-marketing-success/
- Dubois, L. (2015) Why Social Influence Matters to Businesses, http://www.inc.com/guides/201103/why-social-influence-matters-to-businesses.html
- Eisenmann, T., Parker, G., and Van Alstyne, M.W. (2006) Strategies for Two-Sided Markets. Harvard Business Review 84(10) 92-101.
- Ma, L., Montgomery, A. and Krishnan, R. (2009) Homophily or Influence? – Analysis of Purchase Decisions in a Social Network Context, http://pages.stern.nyu.edu/~bakos/wise/2009/papers/wise2009-5b2_paper.pdf
- Moore, H. and Roberts, D. (2013) AP Twitter hack causes panic on Wall Street and sends Down plunging, http://www.theguardian.com/business/2013/apr/23/ap-tweet-hack-wall-street-freefall
- Li, T., Sprengers, D., and van Dalen, J. (2013) Leveraging public sentiment to beat the market. Working Paper.
- Talbot, K. (2015) 5 Brands on Instagram That Succeed with Influencer Marketing, http://www.socialmediaexaminer.com/5-brands-on-instagram-that-succeed-with-influencer-marketing/
