Viral Marketing: Identifying Likely Adopters Via Consumer Networks

38 Pages Posted: 9 Oct 2008  

Shawndra Hill

Microsoft Research

Foster Provost

New York University

Chris Volinsky

affiliation not provided to SSRN

Date Written: 2005

Abstract

We investigate the hypothesis: those consumers who have communicated with a customer of aparticular service have increased likelihood of adopting the service. We survey the diverseliterature on such "viral marketing," providing a categorization of the specific research questionsasked, the data analyzed, and the statistical methods used. We highlight a striking gap in theliterature: no prior study has had both of the two key types of data necessary to provide directsupport for the hypothesis: data on communications between consumers, and data on productadoption. We suggest a type of service for which both types of data are available telecommunicationsservices. Then, for a particular telecommunication service, we show supportfor the hypothesis. Specifically, we show three main results. 1) there is such a "viral" effect and itis statistically significant, resulting in take rates 3-5 times greater than a baseline group; 2)attributes constructed from the consumer network can improve models for ranking of targetedcustomers by likelihood of adoption, and 3) observing the network allows the firm to target newcustomers that would have fallen through the cracks, because they would not have been identifiedbased solely on the traditional set of attributes used for marketing by the firm. We close with adiscussion of challenges and opportunities for research in this area. For example, can onedetermine whether the reason for the viral effect is customer advocacy (e.g., via "word of mouth")versus network-identified homophily?

Keywords: Viral marketing, word-of-mouth marketing, target marketing

Suggested Citation

Hill, Shawndra and Provost, Foster and Volinsky, Chris, Viral Marketing: Identifying Likely Adopters Via Consumer Networks (2005). Information Systems Working Papers Series, Vol. , pp. -, 2005. Available at SSRN: https://ssrn.com/abstract=1281323

Shawndra Hill (Contact Author)

Microsoft Research ( email )

New York, NY 10011
United States

Foster Provost

New York University ( email )

44 West Fourth Street
New York, NY 10012
United States

Chris Volinsky

affiliation not provided to SSRN

No Address Available

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