Marketing cascades
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Charlie Brummitt Just gave a great presentation to our office here at Universal McCann. While mainly conceptual, here are a few key points helpful to ad-agencies: ...

Charlie Brummitt Just gave a great presentation to our office here at Universal McCann. While mainly conceptual, here are a few key points helpful to ad-agencies:

Key Takeaways of the day:
1. Don’t waste your money on “Influencers”: The key to product adoption is not to pay large fees for Influencer promotions (i.e. celebrities or high profile bloggers), but rather to heavily target early adopters on multiple new-media channels.
a. Each individual has a unique threshold of how many people in their network need to use a product before they will adopt it themselves. By targeting those with a low threshold who are likely to try new products without much persuasion, you can seed adoption across multiple networks at greater mass to reach those with higher thresholds
b. Influencers (i.e. celebrities/high Klout users) can generate slightly higher user adoption, but not enough more than early adopters to justify huge fees.


2. Targeting Early Adopters: Early adopters tend to share very similar character traits by brand.
a. Analyze archetypes of early adopters as opposed to all adopters to better target users during a product launch


3. Apply tactics on multiple new-media sites simultaneously to exponentially increase adoption.
a. FB, Twitter, Pinterest, etc. campaigns are too often in silos. If a user sees friends from different networks promoting the same product, it exponentially increases their potential to purchase. Focus more on measuring these initiatives as a collaborative whole through mixed-media modeling.

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Marketing cascades Presentation Transcript

  • 1. Threshold cascades for marketing Charlie Brummitt University of California, Davis Graduate Group in Applied Math Presenting work by others and joint work with K.-M. Lee, K.-I. Goh (Korea University)
  • 2. Soundbites1. Target the easily influenced.2. Targeting influentials probably not worth it.3. Use new media. (Even a little bit.)
  • 3. Threshold cascade model• A large group of individuals must make a decision between two choices A, B. • Examples: Do I buy an Android instead of Apple phone? Do I use Charles Schwab or not?• Probability a person i chooses B over A increases with # of i’s contacts who have chosen B. Reasoning: utility increases with # users, compatible technology, recommendations, influence.
  • 4. Evidence for threshold model Live Journal DVD purchases• Kotler (2000): 60% of 7000 European consumers influenced to buy a new brand by family and friends• Jupiter Communications (1999): 57% of people visit a new website due to personal recommendation (highest influence)
  • 5. Example: Joe buys an iPhone once ≥ 20% of his friends haveCommon choice: Joe Joe activates hard 3thresh- > 20% olds 5 3 of 5 friends chose B
  • 6. Example: Joe buys an iPhone once ≥ 20% of his friends haveCommon choice: Joe Joe activates hard 3thresh- > 20% olds 5 3 of 5 friends chose B 1. Start with a social network 2. Initially activate a few (e.g., everyone has ≈ 5 friends, random people (seeds) chosen randomly) How “early adopters” (or use a real social network) “given free copies”cascades work 3. Run the cascade dynamic 4. Final cascade size till no one can activate here: 70%
  • 7. What affects 1. threshold: 2. Number ofcascade size: % of friends friends needed
  • 8. What affects 1. threshold: 2. Number ofcascade size: % of friends friends needed z=1 z=3 z=7 z=9 cascade size r 1 average cascade size r cascade window no cascades 1 z = average 2 4 6 8 10 number of friends need enough z = average too many interactions: 2 4 6 8 10 number of friends interactions difficult to get enough of Conclusion: more ads & your friends to activate influence → harder to convince them
  • 9. Influentials hypothesistwo-step flow of communication from cascades driven by a criticalmedia to influentials to everyone else mass of easily influenced people= influentials = people who influence their friends (not celebrities, formal leaders) (Katz, Lazarsfeld 1955)
  • 10. Influentials not that importantDefine influentials: top 10% of influence
  • 11. Influentials not that importantDefine influentials: top 10% of influence relative influence influentials trigger slightly larger cascades relative cascade size but not as much as their relative influence suggests. Cascades are driven by “easily influenced people influencing other easily influenced people.” Conclusion: don’t overspend on tiny fraction. Target the easily influenced. few interactions, low threshold Watts, D.J. & Dodds, P.S. Influentials, networks, and public opinion formation. Journal of Consumer Research (2007).
  • 12. Hyperinfluentials, communitiesConsider hyperinfluentials, who influence way more people But these hyperinfluentials are difficult to convince.
  • 13. Hyperinfluentials, communitiesConsider hyperinfluentials, who influence way more people But these hyperinfluentials are difficult to convince. People belong to groups. But influential people tend to interactMany of our friends are friends. with influential people (assortativity) and are difficult to influence. Focus on easily influenced people.
  • 14. Conclusions on influentials hypothesis• Influentials less important than generallysupposed• A critical mass of easily influenced people• The particular people who cause cascades arelikely due to chance.• Marketers: if social influence is important,target easily influenced people. Watts, D.J. & Dodds, P.S. Influentials, networks, and public opinion formation. Journal of Consumer Research (2007).
  • 15. Multiple kinds of influence c olleagues frie nds ilyf am • Different social spheres • 4 of your contacts bought a Windows 7 smartphone • How likely will you buy it, too? Brummitt, Lee, Goh (2011) arXiv:1112.0093
  • 16. Multiple kinds of influence work r friends Twitte 3, m = 1 collea k1 = 1 k 2 gu = 4, es m1 =Go out for drinks 2 with colleagues. 2 of 4 bought aWindows 7 phone.Will I buy it too? 1 1 max{ , } > R ? 3 2 Rule: I’ll buy it if large enough % of colleagues have. Or enough friends, enough Twitter followers, etc. Effect: large cascades easier.
  • 17. Tool for marketers:Advertise even a little in new mediaFacebook is crowded.
  • 18. Tool for marketers: Advertise even a little in new media Facebook is Add another way to interact crowded. (e.g., Instagram). Sparse layer can spark a cascade in the dense layer→ Viral marketing campaigns more effective with each new medium: Google AdWords, Twitter, blogs, forums, iPads, Pandora...
  • 19. Stubborn people• What if people aren’t so easily influenced by just one social sphere?• Example: I won’t buy a Windows 7 phone unless >10% of my friends and >10% of bloggers whom I follow buy one.• Suppose a fraction q of people are easily influenced (need just one social sphere), 1-q of people are stubborn (need all social spheres)
  • 20. Discontinuous jump in cascade size. average Explosively viral.cascade size ρ qH1L = qH2L • • qH1L = qH2L • • 1.0 1.0 0.8 0.8 0.6 0.6 0.4 fraction of easily jump 0.4 0.2 0.2 influenced people 0.0 0.2 0.4 0.6 0.8 1.0 q 0.0 0.2 0.4 0.6 0.8 1.0 q q z=1 z=4 Many interactions → abrupt jump in few friends many friends cascade size
  • 21. qH1L = qH2L • • 1.0Implications of 0.8 ρ 0.6 jump 0.4 0.2 0.0 0.2 0.4 0.6 0.8 1.0 q q• Well-connected networks attain suddenly large cascades as people become easier to persuade (increase q)• Viral campaigns either fail or flourish. Hard to predict.• Example: qsmartphone app ≫ qcar, apps go viral more easily than Priuses.• Globalization, technology → more connections & ways to connect → more explosively viral• - Does the success of your marketing campaigns change smoothly or abruptly? - Is adoption more viral/explosive in electronic media? - How does adding new media affect marketing success?
  • 22. Thank you!Charlie Brummitt Collaborators:cbrummitt@math.ucdavis.edu Kyu-Min Lee, Kwang-Il Gohwww.math.ucdavis.edu/~cbrummitt/ (Korea University)