Mindshare markets of attention and reputation

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This module draws on material from Chris Anderson's book "Free" to describe economies of Attention and Reputation, and how they relate to each other.

This module draws on material from Chris Anderson's book "Free" to describe economies of Attention and Reputation, and how they relate to each other.

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  • 1. (Stanford BUS-21) Martin Westhead Mastering Marketing Mindshare: Reputation and Attention How to make money by giving things away
  • 2. Overview  Motivation  Non-monetary Economies - Attention - Reputation  Quantification - PageRank - Page Views / Engagement  Conversions - Reputation -> Attention -> Money
  • 3. Motivation  Why would you offer a free product? - Network effects - (Related) Mindshare  Previously talked about network effects  This lecture is on Mindshare - How mindshare markets work - Conversion of mindshare to money
  • 4. Non-monetary economies Every abundance creates a new scarcity “In an information-rich world, the wealth of information means the dearth of something else: a scarcity of whatever it is that information consumes. What information consumes is rather obvious: it consumes the attention of its recipients. Hence a wealth of information creates a poverty of attention” – Herbert Simon (Social Scientist)
  • 5. Maslow’s need hierarchy • Creativity • Personal accomplishment Self Actualization • Need for respect, reputation • Respect for others Self-Esteem / Ego • Professional and personal relationships • Need for love and belonging Social • Secure • Protection from theft, violence, instability Security / Safety • Basic survival • Food, clothing shelter Physiological
  • 6. Scarcity helps us navigate abundance – and keep score
  • 7. Mindshare Economies  Attention Economy - TV shows compete for this  Reputation Economy - Brand compete for this  Are these really economies? - Economics: The science of choice under scarcity – Adam Smith
  • 8. Celebrity business model Reputation Attention Money ($$) Make / publish content Collect royalties Popular content Convert ConvertBuild
  • 9. Quantifying Reputation “If the attention I pay to others [arrow 2] is valued in proportion to the amount of attention earned by me [arrow 1], then an accounting system is set in motion which quotes something like the social share price of individual attention. It is in this secondary market that social ambition thrives. It is this stock exchange of attentive capital that gives precise meaning to the term “vanity fair”. –George Franck Economist, 1999 1 2 Value connection Attention Attention me
  • 10. Reputation: Citation Analysis  Scientific papers  Authors reputation - based on number of citations  Metric: Number of references to a document references
  • 11. Internet References: The URL  Uniform Resource Locator  Core technology  Invented by Tim Bernes Lee (1989)  IETF RFC 3986  http://<domain>/<path>  Like citations, links measure reputation - Link says: Go to this other place, leave my site - If you like it maybe you will think more of me - Ideally this exchange leaves both parties richer
  • 12. Reputation: PageRank  Google’s Algorithm for ranking search results  Rank of a page depends on - The number of pages linked to it - The number of pages linked of each of those - …and so on…  PageRank is a sophisticated reference metric hyperlink hyperlink
  • 13. Quantifying Mindshare  Measure of reputation - PageRank  Measure of attention - Page Views  Google: central bank of reputation, control: - Inflation - as the web grows - Counterfeiting – via link spam
  • 14. Attention Reputation Cycle Reputation (PageRank) Attention (Page Views) Money($$) Paid traffic User finds site Advertiser pays for user attention Build SEO and marketing
  • 15. Many Economies  PageRank is the gold standard of reputation - USD of reputation currency  There are other measures in Web 2.0 - Facebook friends - Twitter followers - Number of bookmarks (e.g. Delicious)
  • 16. Attention and Engagement  Attention (page views) - Easy to quantify - Hard to know if action is valid - Just because someone opened a page, did they read it? - Easy to fake - Easy to automatically generate fake page views - Lower value to advertisers  Engagement - Complex to quantify - Too many metrics: Facebook like, a Digg, Google+1 - Mostly action clearly valid - Harder to fake - Need many Facebook accounts to fake Likes - Higher value to advertisers
  • 17. Engagement Measures bounce rates, CTR, days since last visit, exit rate, entrance rate, frequency, number of new visitors, number of visitors, number of returning visitors, number of bookmarks (e.g. on Delicious), number of comments posted, number of content syndication (RSS), content contribution (adding a comment, adding a review, rating, uploading an image or video), number of repeated visitors, page views, time spent (dwell time), visits per visitors, number of tags (e.g. on Flickr), number of emailed and printed stories, number of Facebook likes, number of re-tweets, number of messages sent (instant, email), number of conversions (e.g. subscribing, buying), number of Facebook fan pages, number of search queries, common paths (e.g. from front page to mail tool then exit), external comments and reviews (for products), etc … “User Engagement – A Scientific Challenge” - Mounia Lalmas
  • 18. Summary  Motivation  Non-monetary Economies - Attention - Reputation  Quantification - PageRank - Page Views / Engagement  Conversions (R -> A ->$)