The power of "like" - Social Networks Analysis

Prof.Dr.Holger Lütters / @luetters / HochschulefürTechnikund WirtschaftBerlin / www.luetters.com
Social Network Analysis: The value of people’s online interactions
Holger Lütters -HTW Berlin
Class of ProfDeonNel
University of Pretoria
09. September 2014

Holger LüttersProfessor International Marketing HTW Berlin Fachbereich3
•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 friendschipwith a product in 2008

Whichnetworktojoin?

The futureisaboutmeasuringtheindividual‘sinportanceandrelatingittomarketing
http://www.oafrica.com/web/using-klout-to-estimate-the- influence-of-african-online-media/
Data from
http://www.klout.com

Advantages ofOnline Marketing

Ice Bucket Challenge 2014
https://www.youtube.com/watch?v=8jKE7eyqic4

Online-Marketing is a dilemma of choices. Can a marketing professional affordnot 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
node
node
node
node
node
node
node
node
node
node
node
node
node
node

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

Development ofSocial 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

A giant network creates bigger network effects for each user. Facebook ahead of the development in terms of registered usershttp://www.dailybloggr.com/wp-content/uploads/2010/03/facebookstatsfacts.png
Ralph Hutter(2011): Das Jahr, in demMutter auf Facebook kam. In Marketing JahrbuchSchweiz2011, S. 157-160
2014: >1.300 MIO. USERS?
„2011 –The year that mum joined Facebook“ (Hutter)

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 fulfilltheir 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.)
▪BehavioralData (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 iPhone
User Motion Profile Holger Lütters
via 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

Even offline brands gather millions of fans online
Source: Facebook.com
OutdatedFan numbersof2013

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 2012What 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.shtml
http://en.wikipedia.org/wiki/Six_Degrees_of_Kevin_Bacon

St. Gallen
Friends allover
Zürich
Berlin
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-CenteredNetwork

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.
Influencer-Activities

Overall findings: Peer recommendations work besthttp://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.

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

New KPIs are developed, tested and analyzedover timeHere: Twitalyzerscores of a twitter account
http://www.twitalyzer.com/metrics.asp?u=frischkopp

New segmentations based on the social media activities are possible
http://klout.com/#/borschtsch/kloutstyle

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 higherhttp://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

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 KloutScore over 40 the use of their Lounges
•Moo gives away Business cards at certain Kloutscoreshttp://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 information
Prof.Dr.Holger Lütters
HochschulefürTechnikund WirtschaftBerlin
Holger.Luetters@htw-berlin.de
www.luetters.com
Feel free to join me on
Twitter @luetters
de.linkedin.com/in/luetters/
www.researchgate.net/profile/Holger_Luetters
xing.com/profile/Holger_Luetters

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