The Science behind Viral Marketing is a look at the key factors that drive growth in viral marketing. (Hint, the most important factor is not the one everyone expects.) It also looks at what is needed to get virality to work, and how to create and optimize viral marketing campaigns or viral products. One part of the presntation shows the key formulae behind viral marketing. Suitable for marketers or for product designers.

1. The Science behindViral Marketing Lessons Learned

2. Explosive growth! YouTube Facebook Zynga Groupon Twitter Gilt Groupe All have set records for growth rates The key is Virality

3. The Power of Viral Marketing When it works it is Free!! Far more effective than paid promotions and advertising campaigns If done well can be self-sustaining + growth Unfortunately rarely achieved!

4. The Best Business Model Virally acquired customers are free Monetization(LTV) Cost ofCustomerAcquisition(CoCA)

5. Topics The Science behind Viral Marketing How to do Viral Marketing Optimizing for Virality Making this work for your business Examples

6. Where my experiences come from Tabblo Photosharing site Founded by Antonio Rodriguez, 2005 Acquired by HP within 18 months Great investment return All credit is owed to Antonio Rodriguez

7. The Viral Loop

8. The Math behind Virality Key variables: Custs(0) The initial set of customers i The number of invites sent out conv% The percentage of invites that convert into customers

9. The Viral Coefficient K The Viral Coefficient K = no of invites x The conversion % (i x conv%) Turns out to be a very important variable. It equals the number of new customers that each customer is able to successfully invite.

10. An Example Custs(0) = 5 i = 10 conv% = 20% K = 2

11. The Formula New custs added in this cycle = New custs added in the previous cycle x K Assumes that customers only send out invites once, and not continuously in every later cycle To calculate the number of customers at any particular cycle (c): Custs(c) = Custs(c-1) + NewCusts(c)

12. Sensitivity to K See Spreadsheet model

13. Sensitivity to K

14. What we learned Viral Coefficient must be > 1 to have viral growth Viral Growth is a compounding phenomenon Increasing the Viral Coefficient has a big impact on the rate of growth

15. YouTube versus Tabblo Both started around the same time YouTube’s growth massively outstripped Tabblo What was happening here?

16. Tabblo’s Viral Loop User discovered Tabblo Wait till they take some photos Upload Share (i.e. invite others) Some portion of those think, this is great, I want to use this myself Wait till they take some photos Upload Etc.

17. YouTube’s Viral Loop User discovers YouTube Sees some hilariously funny content Decides to share that with friends Friends see hilariously funny content Decide to share that with their friends The time to infect is far shorter!

18. A More Sophisticated Formula t = timect = cycle time Thanks to Stan Reissfor help with the forumula

19. What this tells us Raised to the Power of … Multiplier Shortening the cycle time has a far bigger effect than changing Viral coefficient!

20. Some experiments See Spreadsheet model

21. Some Experiments Time - t No wonder YouTube was explosive!

22. Lesson Learned Reducing Viral Loop cycle time has by far and away the greatest effect on viral growth

23. How to do Viral Marketing

24. The Basics Figure out the Viral Hook What makes people want to share content? Content or Product/Service Initial Seeding Use communications networks to spread Email, Twitter, Facebook, Google+, etc. Refresh & Re-seed

25. Figure out the Viral Hook Something very compelling that the user wants to share

26. Viral Hook - What works: Something of Value: Applications Educational content Data Things of monetary value (Discounts and coupons) Something entertaining Humor Games News Inherently Viral Services Email, Skype, etc. Other?

27. Why do people share? A paper on that here: http://marketing.wharton.upenn.edu/documents/research/Virality.pdf http://www.nytimes.com/2010/02/09/science/09tier.html (summary) Virality driven by physiological arousal High arousal, Postive (awe) – most likely to be shared High arousal, Negative (anger or anxiety) – less likely Low arousal, de-activating (sadness) – unlikely

28. Content Types Blogs Videos eBooks Applications and Services Etc.

31. Using engineering for marketing

32. Inherently Viral Applications The most viral apps are those that are require sharing to work properly: HotMail Skype YouTube FaceBook Etc.

33. Initial Seeding The bigger your initial seeding the better Identify Influencers Reach / Influence Klout, SocMetrics and other services emerging to help Develop the right relationship Listen, Strategize, Engage, Measure Paid Seeding Paid search, Virool.com, etc.

34. Spread through Communications Networks Early days this was email Social Networks have turbo-charged sharing What you want: Low effort for the user doing the sharing

35. Refreshing and Re-Seeding Google Search (paid and organic) Creates new seeding New Blog posts Cause your existing readers to re-invite Farmville, etc. Continue to invite by regular posts to your wall

36. Lessons Learned Optimizing for Virality

37. Lessons Learned Apply my “Unblock your Sales Funnel” principles to the viral loop steps

39. Find it offensive to give name and email

40. Don’t want to get spam sales emails

42. Recommendation from a friend

43. Education

44. Data/ information reports

45. Entertainment

46. Free stuff

48. Free trials address product viability and fit concerns

50. Example: Living Social

51. Another strategy Offer a reward both to the user and to their friend Overcomes the feeling of being sleazy Can lead to much higher success rates

52. Lessons Learned Maximize the number of invites they send out Leverage tools that provide easy reach to their friends: Twitter Facebook: post to their News Stream LinkedIn Automate access to their address book Works well for GMail, and other on-line address books Etc.

53. Lessons Learned Look for ways to automate the whole invitation process No thinking required No work required

55. Don’t just invite once Look for ways to keep repeating invites E.g. Facebook games like Farmville that post to your News Stream

56. Lessons Learned Look for other ways to get your customers to tell their friends about you Example: ConstantContact’s email signature

57. Reduce the Cycle Time

58. Lessons Learned Hybrid Viral Even if you can’t get a viral coefficient > 1you can still enhance customer acquisitionwith some virality

59. Lessons Learned The Viral Loop is an important Funnel Design each step carefully Simplify and eliminate manual steps Test for adequate motivations and incentives Address concerns A/B test each step Metrics to evaluate and improve

60. Make it work for your Business Creepy Effective

61. What can go wrong? - Branchout Social networks are for hanging out with friends Not promoting your business Branchout (recruiting app on Facebook) Spammed users walls with way too many entries

62. The Result: Thanks to paulamarttila.posterous.com

63. Some Fun Examples For a full set, visit: http://www.ignitesocialmedia.com/social-media-examples/viral-marketing-examples/

64. For More information Visit my blog at www.forEntrepreneurs.com