Case study: Social networks and viral marketing

Social network marketing describes the application of social network analysis to marketing problems. In particular, when deciding which customers to target in a marketing campaign, social network marketing takes into account how consumers influence each other. It is particularly powerful in industries which have easy access to social network data, like in telecommunications, online social networks, online gaming and so on. Like for retention two types of subscribers can be identified:

  • Influential subscribers who are likely to infect other subscribers to take up a product. Influential users will spread a new product much more quickly.
  • Subscribers who are under pressure to take up a product as well because some of their peers are already using the product. For example, people who have a lot of friends using an iPhone are much more likely to buy an iPhone as well.

When running social network marketing campaigns there are a number of campaign related factors that need to be done differently than in traditional marketing campaigns. Viral marketing expert Simon Rees identifies the following 7 success factors for viral marketing:

  1. They deliver on their promise, at every level (purchase, set-up, use, payment, brand, etc.): proposition excellence.
  2. The product or its use is highly observable.
  3. The specific role of word-of-mouth in propagating your type of product is understood.
  4. There is an economic benefit to word-of-mouth for your customers.
  5. The product or campaign can tap into the zeitgeist, the spirit of the age.
  6. Influential expert users can be identified and nurtured.
  7. The product can be made to appeal to communities of interest.

Social networks and viral marketing (Case-related questions & problems for use in class room discussions can be found at the end of the case study.)