Social Contagion – An Empirical Comparison of

Transcript:Social Contagion – An Empirical Comparison of:
Social Contagion – An Empirical Comparison of Seeding Strategies for Viral Marketing Hinz, Oliver / Skiera, Bernd / Barrot, Christian / Becker, Jan U. (2011), "An Empirical Comparison of Seeding Strategies for Viral Marketing", Journal of Marketing, 75 (November), 55-71 Oliver Hinz Bernd Skiera TU Darmstadt University of Frankfurt Christian Barrot & Jan U. Becker Kühne Logistics University, Hamburg A changing environment… …requires new marketing instruments Companies discover innovative new methods to proactively stimulate and channel Word-of-mouth Viral Marketing as savior Viral marketing: consumers mutually share and spread information, initially sent out deliberately by marketers to stimulate and capitalize on word-of-mouth (WOM) traditional Marketing instruments are facing shrinking effectiveness in the face of new social media Information over-flow: Traditional advertising instruments such as print ads or TV commercials struggle to reach an audience growing tired of ever more ads Rise of social media: Communications is shifting towards digital social media, such as facebook, twitter, email or SMS. Credibility: Studies have shown the higher effectiveness of customer-initiated communication (e.g., word-of mouth) compared to advertising Effective customer acquisition: Marketing managers have discovered social interactions between existing and potential customers as new sources for customer acquisition VIRAL MARKETING Rapidly gains Ground Global spending for viral marketing campaigns → Shift from traditional marketing budgets towards viral 2001 2006 2013 e e Forecast Stephen, Andrew (2010): Viral Marketing: Tell a Woman, Working Paper, INSEAD, Fontainebleau. $ 76 Mio. $ 980 Mio. $ 3.000 Mio. VIRAL MARKETING utilizes the advantages of personal communications in social networks Viral marketing Advantages familiar senders have a higher credibility for the recipient familiar senders are not blocked by spam filters (higher reception and open rates) low to very low cost (e.g., for distribution via SMS or email) Key success factors Content (e.g., funny, entertaining, surprising, motivating) Willingness-to-share, often stimulated by incentives (e.g., coupons, competitions, financial rewards) Social Network Structure (e.g., connectedness) Seeding (selection of starting points to maximize campaign impact) Strategy 1: High-degree seeding Hypothesis: Seeding of individuals with a very high number of personal contacts (High- Degree) maximizes the reach of a viral marketing campaign → Supported by, for example, Katz/Lazarsfeld 1955; Rogers 1962; Coleman et al. 1966; Rosen 2000; Weidlich 2000; Hanaki et al. 2007; van den Bulte/Joshi 2007 three potential seeding strategies based on Sociometric measures are discussed in literature (1 / 3) Strategy 2: High-betweenness seeding Hypothesis: Seeding of individuals acting as “bridges“ or intermediaries between