Do birds of a feather buy the same things ?

Excerpted from Ad Age, “Can Social Networks Predict What You’ll Buy?” by Abbey Klaassen, November 17, 2008

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Those stalking the social-networking field are betting that birds of a feather don’t just flock together — they buy together too.

There’s emerging evidence that mapping the online relationships among consumers…can be just as valuable as traditional targeting and segmentation in predicting how people will respond to marketing messages…

“It may well be that direct communication between people is a better indicator of deep similarity than any demographic or geographic attributes”…

In one way, the concept is almost the opposite of collaborative filtering. Instead of associating unconnected consumers through their similar preferences and behaviors, it associates consumers who are already connected and share values and beliefs, a concept called homophily

Several firms are hoping social-connection mapping will create a more valuable ad experience in social networks… has developed a relationship-targeting technology called FriendRank using data from social-network applications…to construct a sense of where consumers’ strongest online relationships lie … It serves ads within social-network environments and incorporates the explicit associations between two people into its creative. A typical ad might have a call to action or question that is then sent to 10 of their friends. Should they interact with it, it will be sent to their networks, and so on and so on.

“Our thesis all along has been: Ads have to become social themselves…They can’t just be traditional web ads on top of social networks.”

Edit by SAC

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The influence of social networks on purchase decisions could provide significant insights to marketers and advertisers.  However, it is unclear how credible these start-up technologies are in their ability to predict the influence of relationships on purchases. A specific barrier that exists is in the tendency for social network users to “Friend” or “Link in” with many people with whom they rarely communicate, and thus are unlikely to influence or be influenced by.  Among the many firms that are analyzing this social network to purchase relationship, FriendRank seems to be on the right track of first understanding where consumers strongest relationships lie. 

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