the power of "like" - social networks analysis

Prof. Dr. Holger Lütters / @luetters / Hochschule für Technik und Wirtschaft Berlin / www.luetters.com

Social Network Analysis: The value of people’s online interactions

Holger Lütters - HTW BerlinClass of Prof Deon Nel

University of Pretoria

09. September 2014


Holger LüttersProfessor International Marketing HTW Berlin Fachbereich 3

• Born during Apollo Mission (1969)

• Studies in business administration without internet

• First email at age 25 / First mobile phone at 29

• Dissertation about Online Market Research in 2004

• Facebook-Member since February 2008

• 303 (partly human) friends on Facebook

• First friendschip with a product in 2008


Which network to join?


The future is about measuring the individual‘s inportance and relatingit to marketing

http://www.oafrica.com/web/using-klout-to-estimate-the-influence-of-african-online-media/

Data fromhttp://www.klout.com


Advantages of Online Marketing


Ice Bucket Challenge 2014

https://www.youtube.com/watch?v=8jKE7eyqic4


Online-Marketing is a dilemma of choices.Can a marketing professional afford not to participate in the game?

Individual

Homepage

Classic

Online-Advertising

Searchword-Marketing (Keyword-

Advertising)

Affiliate-Marketing

Social Media Marketing

Mobile Marketing

Location Based

Services

Additional measures like Blog, Twitter, Apps…


Understanding the success of Social Networks


Various disciplines are researching different perspectives of networks

• Business Administration

• Ethnology

• Social Psychology

• Communication Science

• Computational Physics

• Game Theory

• …


The idea of networking includes interactions that are based on personal contacts and promise benefit


Technically speaking a network is a set of nodes, which can be connected to each other in different patterns for the purpose of exchange

node

node

nodenode

node

node

node

node

node node

node

node

node

nodenode

node


Network effect: The benefit of each individual increases with each additional user on the network


Development of Social Networks


Definition Social Networks

Boyd/Ellison define social networks as:

A web-based service that

• allows individuals to create a public or semi-public profile

• supports connection to others

• spreads information about their own activities through the network

Boyd/Ellison (2007): Social Network Sites: Definition, History, and Scholarship; Journal of Computer-Mediated CommunicationVolume 13, Issue 1, pages 210–230, October 2007

http://onlinelibrary.wiley.com/doi/10.1111/jcmc.2008.13.issue-1/issuetoc


A giant network creates bigger network effects for each user.

Facebook ahead of the development in terms of registered users

http://www.dailybloggr.com/wp-content/uploads/2010/03/facebookstatsfacts.png

Ralph Hutter (2011): Das Jahr, in dem Mutter auf Facebook kam. In Marketing Jahrbuch Schweiz 2011, S. 157-160

2014: >1.300 MIO. USERS?

„2011 – The year that mum joined Facebook“ (Hutter)

http://www.dailybloggr.com/wp-content/uploads/2010/03/facebookstatsfacts.png


An exclusive online network looses its network effect

https://www.asmallworld.com/login


The development of social networks is faster than our ability to study them. Facebook currently dominates the development

Worldwide fast-growing networks Networks in decline

Social Networks in Germany


The western look on the internet tends to be ignorant:

The online world of networks is much bigger than it appears to us


A social network is a description of the social structure of associated actors

• Human beings have always been in linking social networks

• The membership to a network can have its own meaning

• Through technological advances now networks are created in new ways that changes the basic pattern of network membership

• Social networks are less elitist and fulfill their benefits at other levels

• Recently, networks emerge with products, initiatives, etc.


Non-reactive tracking of online activities


Data traces of online activities occur voluntarily and involuntarily

Voluntary data traces

▪ Registration with age, gender …▪ Clicks, Likes, Memberships…▪ Establishing connections

(“friendships”)▪ Check-ins▪ New: Dislike

▪ …

Involuntary data traces

▪ Geographical assignment (GPS, Triangulation etc.)

▪ Browser Data (Language etc.)

▪ Behavioral Data (e.g. Age prediction by surfing behaviour)

▪ Data exchange between platforms (Re-Targeting)

▪ …


BIG DATA: Standard procedure for all providers on the Internet: background tracking of activities and data integration


The involuntarily created traces left are commercialized and allow further interpretations about how to approach a client

Collusion plugin advertising tracker

Source: Apple iPhoneUser Motion Profile Holger Lüttersvia Apple ID in the year 2010 Source: Installation of Collusion Tracker and short surf activity (5 Minutes)

Apple GPS Profile of movements


SOCIAL NETWORK ANALYSIS

The power of „Like“


Clicking on something on Social Networks creates traces beyond your control level: „The Power of Like“

http://www.comscore.com

http://www.comscore.com/


Even offline brands gather millions of fans online

Source: Facebook.comOutdated Fan numbers of 2013


Voluntarily created information "I like" is the basis for the creation of in-depth personal analysis: combining personal data with interaction data

• The barriers to click “LIKE” are constantly lowered, while the direct exposure of your network’s activities seem to influence more.

• The more we click the more valuable data becomes


Seemingly harmless information may change into something else in a different context


18% of my network changed their jobs in 2012

What does this number tell about me to my future employer?


Origin of Social Network Analysis: Six Degrees to Kevin Bacon.Who among us is closely connected to Kevin Bacon?

Source: alumni.indiana.edu/about/fun/kbacon.shtmlhttp://en.wikipedia.org/wiki/Six_Degrees_of_Kevin_Bacon

http://alumni.indiana.edu/about/fun/kbacon.shtml

http://en.wikipedia.org/wiki/Six_Degrees_of_Kevin_Bacon


St. Gallen

Friends allover

ZürichBerlin 1st. year

Schule

Friends Berlin A

Allgäu

Eberswalde

Friends Berlin B

Grenoble

The concept of non-reactive relationship analysis is already implemented on Facebook and other services


Future: Network of Influence

Different approaches compete to explain influence patterns better. Goal: Explaining your personal network of influence to sell it at highest prices

Quelle: Trusov / Bodapati / Bucklin (2010): Determining Influential Users in Internet Social Networks. In: Journal of Marketing Research, August 2010, S. 643-658 Download: http://papers.ssrn.com/sol3/Delivery.cfm/SSRN_ID1479689_code1012805.pdf?abstractid=1479689&mirid=3

Me, Myself & I My personal importance to the network

Today: Ego-Centered Network


Currently companies and researchers are looking for to evaluate the formula of user behaviour. Aim is to identify opinion leaders / influencers automatically by algorithm

Zuft = log-in activity over the past days

Influence of First-Level-Networks

Influence of Second-Level-Networks

Quelle: Trusov / Bodapati / Bucklin (2010): Determining Influential Users in Internet Social Networks. In: Journal of Marketing Research, August 2010, S. 643-658

Influencer-Activities


Overall findings: Peer recommendations work best

http://networkingexchangeblog.att.com/small-business/why-digital-influence-is-so-important/

http://networkingexchangeblog.att.com/small-business/why-digital-influence-is-so-important/


Findings of the research: 1st level network has a strong influence on one's behaviour

• (Only) One of five friends influences the own activity• Female friends tend to have more influence on males• People who have made concrete information on their leisure activities

(ex. dating objectives) are less influential on others• Friends who are older than you have less influence (opposite to the

offline world)

• 2nd level network: Much weaker effect than expected. Only up to 10% of the users are actually influential on the 2nd level

Source: Trusov / Bodapati / Bucklin (2010): Determining Influential Users in Internet Social Networks. In: Journal of Marketing Research, August 2010, S. 643-658


Consequences of

Social Media Measurement:

Selling the value of people


The analysis tools are available to everyone (in reduced functionality even for free)

http://mentionmapp.com/beta/classic/#user-frischkopp

http://mentionmapp.com/beta/classic/


New KPIs are developed, tested and analyzed over timeHere: Twitalyzer scores of a twitter account

http://www.twitalyzer.com/metrics.asp?u=frischkopp

http://www.twitalyzer.com/metrics.asp?u=frischkopp


New segmentations based on the social media activities are possible

http://klout.com/#/borschtsch/kloutstyle

http://klout.com/


The first attempts to determine the importance of people in social media are already implemented


The commercial exploitation of the relationship is the focus question: What is a relationship (fanship) worth?The economic value of a Facebook Fan appears to be higher

http://barnraisersllc.com/wp-content/uploads/2011/05/value-of-facebook-fans1.jpg

http://barnraisersllc.com/wp-content/uploads/2011/05/value-of-facebook-fans1.jpg


The value of a human being in social media derives from the sum of its contacts and interactions.Various tools try to express it in monetary terms

https://goprivate.abine.com

https://goprivate.abine.com/


Evaluation of social network activities is still under research, but already used in the world of marketing

• The metrics do not appear consistently meaningful yet

• But many of the collected data could become meaningful in a different context

• User activities will become lifetime logs that are permanently monitored and transferred into business models

Impact on marketing:

• We have to say goodbye to the CPM (thousand contacts) measure in marketing

• In the future, individual advertising rates based on the influence of a user will be developed

• New forms of incentives are finding their way into the field of marketing


Future segmentation in marketing will also be based on social scoring

First real-life example:

• Cathay Pacific allows people with Klout Score over 40 the use of their Lounges

• Moo gives away Business cards at certain Klout scores

http://www.forbes.com/sites/reuvencohen/2012/05/11/social-media-clout-the-rise-of-micro-celebrity-endorsements/

http://www.forbes.com/sites/reuvencohen/2012/05/11/social-media-clout-the-rise-of-micro-celebrity-endorsements/


Thank you for listening.You can also follow me…

Holger Lütters – HTW Berlin

Contact informationProf. Dr. Holger LüttersHochschule für Technik und Wirtschaft Berlin

[email protected]

www.luetters.com

Feel free to join me onTwitter @luettersde.linkedin.com/in/luetters/www.researchgate.net/profile/Holger_Luetters xing.com/profile/Holger_Luetters

the power of "like" - social networks analysis

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